The combined sales increases and cost savings represent GBP1.7bn GVA(1), just over a 20% (a one fifth) increase in GVA of London’s voucher firms. (see notes to the editor explaining GVA)
The net benefits of this to the Greater London economy(2) are estimated to be an additional GBP430m additional GVA and an additional 8,118 jobs.
This represents a very positive economic return on investment of public funds into the scheme of 23.7:1 (GBP23.10 GVA per GBP1 invested in the scheme) (3) and a cost-per-job of GBP2,226(4)
These are the findings based on analysis of a comprehensive online survey of voucher scheme recipients carried out for the GLA by Adroit Economics with support from Point Topic, The Fifth Sector and the University of Manchester.
“Faster broadband is transformational for businesses and the economy,” says Dr Steve Sheppard, Managing Director of Adroit Economics, a specialist in economic development and regeneration.
“Upgrading to faster broadband brings significant financial benefits to SMEs and results in substantial economic uplift. The findings of this survey, its analysis and assessment, provide strong evidence that the benefits to SMEs and resulting financial and economic impacts locally, regionally and nationally of the use of faster broadband are high, representing the equivalent of a third of current turnover. This is far higher than current global broadband literature suggests.”
Just under 450 firms took part in the survey and of the respondents that answered, 50% said that faster broadband had a transformational impact on their business.
Benefits to SMEs include cost savings, staff time savings, increased sales, improved staff skills and proficiency, and increased productivity of home and mobile workers. The survey found that:
• Average cost savings of 4.8% were gained
• Average sales (turnover) increases of 10.5% are estimated
• Staff time savings of 6.1% were made
• Home working and mobile working productivity benefits of 11.1% were achieved.
Iain Bennett, Managing Director of The Fifth Sector, a digital transformation agency, says, “Small businesses that adopt faster broadband see immediate changes in their way of working as people in the organisation seize on the opportunity to improve their skills and ‘work smarter’. The technology unleashes latent productivity, which provides a lasting and growing benefit to the individuals and firms concerned – a really important finding at a time when businesses and policy makers alike are striving to find new ways to boost economic performance, increase jobs and improve skills.”
Oliver Johnson, CEO at Point Topic, adds, “The survey and associated data change our understanding of the benefits of broadband. We finally have some well researched, concrete and frankly very impressive inputs for business models around the country. Long to medium term it appears that there is at least an order of magnitude more to be gained than many projections had forecast and even short term there is a much stronger case for more bandwidth in business. As far as policy goes again broadband moves up the ranks and cements its place as a vital instrument in future growth.”