|
30 June 2003
Broadband Content Pilots – Feasibility Study
By Jonathan Wood, Haven Ventures
Early in 2003, the DTI commissioned Atos KPMG to undertake a feasibility study into three 'pilots' recommended by the Digital Content Forum as activities to promote the development and uptake of broadband content. The report examines the case for Government intervention in three key areas, following a series of interviews, workshops and market assessments.
The report concludes that intervention is warranted, and proposes possible structures for three projects intended to be funded jointly by Government and industry, in the form of:
| · | A commissioning and distribution exercise to demonstrate and examine the investment case for broadband uptake in a specific industry – tourism – “the broadband visitor” | |
| · | A generalised commissioning structure and showcase facility to help 'make the market' in broadband content - “the broadband channel” | |
| · | A vehicle to create, pilot and supply a range of online tools to support collaborative production work at a distance – “the broadband cluster” | |
Overall Assessment
Overall, I believe this report should be given a cautious welcome. It is a careful and detailed assessment of the market position in what we all believe will be an increasingly important and competitive area of the UK economy. The case for each pilot is well made and the structures for each pilot show careful thought; there are in my view however, some significant errors, omissions and shortcomings which could lead to negative or at least sub-optimal outcomes.
Accentuating the Positive
To emphasise the positive first, the DTI and the authors of the report have clearly taken considerable care in designing the structures for the pilots to help maximise the benefits while keeping the costs and the potential for market-distorting side-effects down. For example:
| · | the clear direction of commissioning activity towards, and the recruitment and rotation of the small number of active commissioners in the broadband channel from, SME content producers and consumers should help stimulate the crucial SME sector, maximise the level of innovation and sustainable benefit, and reduce the chances of this becoming another closed subsidy for the same old media suspects; | |
| · | the evaluation of the hard benefits of broadband uptake, the creation of a structure designed to encourage a critical mass of viable and capable commissioners and producers of content for broadband, and the identification and evaluation of a replicable infrastructure for collaboration across physical clusters, moves the emphasis of the projects decisively towards catalytic market intervention and away from content subsidy or long-term government support; | |
| · | the deliberate inclusion of a showcase facility for content commissioned through the broadband channel addresses the critical need to allow new broadband content producers to break into the brand-dominated and relationship-conditioned media supply chain; and the idea of communities of interest from which novel ideas and talent can be drawn into the showcase and the commissions process, provide a mechanism (if a weak one) for tapping new sources of talent; and | |
| · | the emphasis on lean projects to manage the provision of facilities and services from the best amongst existing early-stage technology, service, production and distribution players should help minimise market distortion. | |
Isolating the Negative
Perhaps the most surprising omission from this feasibility study is the question of feasibility itself. Hard, practical questions of support, scope and cost are given scant attention or not addressed; for example:
| · | the extent to which industry players will, as assumed, be prepared to participate in funding these projects (directly or through infrastructure & services) has not been scoped; | |
| · | the specific tools and functions which are considered most essential to support collaborative working are not identified, when this would be a key enabler for potential participants; | |
| · | the scale and extent of likely costs associated with these activities are not assessed, when again these will be key factors in supporting industry participation, and scopinglikely budget requirements for Government. | |
Further, while the report stresses the need to draw on existing structures, technologies and capabilities wherever possible, one apparent assumption about the structure of the online service industry is in danger of creating a negative outcome.
In considering the broadband cluster, the report's authors appear to assume that a completely new integration will need to be made by bringing together applications, hosting and bandwidth capabilities. However there is already a growing, if young, sector within the supply-chain which already provides this service; offering online collaborative environments either for general horizontal business functions (such as sales & billing management, contract negotiation or IPR management) or for specialised industry applications (such as financial services or construction).
| | some significant errors, omissions and shortcomings which could lead to negative or at least sub-optimal outcomes |
To ignore such players, as the report seems to do, in favour of sub-contracting applications developers and basic hosting providers to create a new platform from scratch would be to ignore existing capability and market interest. It could also potentially introduce a government sponsored competitor into the early-market sector of online collaboration which is still experiencing something of a shake-out.
The saving grace for the report in this context is that these questions can only be answered ultimately by the eventual participants in these projects, if they go ahead. Also, provided the players in the online collaboration sector have opportunity to pitch their participation like anyone else, if they are incapable of responding, a new platform and provider may be the only solution. And of course, it may suit the internal discussion within the relevant Government departments to remain vague on budget requirements for as long as possible.
Nevertheless, the observation stands that the report has not delivered key scoping and indicative cost information which could have given significant impetus to gathering and qualifying industry interest and support.
Optimising the Outcomes
At a different level, despite the positive features I noted above, there is still a non-trivial risk of some sub-optimal outcomes, particularly in respect of the 'broadband channel'.
The introduction of a centrally driven commissioning agency for broadband content, overseen by a steering committee of those who are directly providing the cash, could still result in a relatively sterile environment most relevant to a cultural and economic elite. This would fail to engage productive new talent in large sections of our economy – emphasising rather than reducing social exclusion and the digital divide.
| | support, scope and cost are given scant attention or not addressed |
The principal benefit of broadband capacity to individuals is the power to experiment, to innovate, to create without the meter running; as I've heard at least one confirmed 'anorak' put it – to be empowered to engage and even to 'waste' previously scarce resource creatively. Such a benefit translates into meaningful Gross Domestic Product and positive social outcomes only if we ensure that in encouraging take-up we fully distribute the infrastructure to engage new talent with the medium, and provide basic support for skills development for that talent to be able to engage creatively.
There are two issues here that relate to the broadband channel envisioned in the report:
| · | Decentralisation – the report recommends a centralised commissioning structure which may or may not continue on a commercial basis after the pilot. In the early phase this may be the only viable mechanism to catalyse action, because of the shortage of appropriate commissioning and production skills. But, I suggest a specific deliverable should be to establish process and criteria which can be replicated through the existing infrastructure for business, industry and individual support at either regional or local level. This would allow the effect to scale to provide genuine and sustainable induction of new talent into the productive economy on an inclusive and national basis. | |
| · | Skills acquisition – the report implicitly assumes, with subliminal anecdotal support from quotes drawn from its self-selecting expert sample, that 'broadband skills' is not an issue. However, the valid argument for a centralised commissioning body makes clear that it is, both now and in the medium term. If this action is to create a sustainable effect in the market and have a positive rather negative impact on social exclusion, then it must, along with replicating the approach regionally, inform and leverage the existing mechanisms for skills development and training provision in identifying and fulfilling the key skills requirements. | |
Joining the Dots
My arguments about decentralising the commissioning function and the need to include skills acquisition in the mix highlight the overlaps with other broad economic and social policy programmes – increasingly delivered through devolved agencies such as the Regional Development Agencies, the Business Links and the Learning and Skills Council.
Can't we join the dots here, follow the bigger picture and get a much bigger bang for our buck? This is an approach much much talked about currently, but little realised. It's a hard challenge, not least because the progressive devolution of programme management whilst encouraging innovation and driving down costs, creates structural incentives to maximise independence and budget retention regardless of other considerations. And if the big picture is fragmented and doesn't quite work, then like Railtrack it's nobody's fault.
But if the Government genuinely believes its own rhetoric on the importance of this sector, then the social and economic gains available from doing this right may just be big enough to make it happen this time. And the nature of the budget required to promote something like the broadband channel effectively may be such that the answer lies in where the money is to come from. Existing provision in respective of creative industries cluster development and broadband access (RDA), early-stage business development (Business Link), and training and skills provision (LSC) for these sectors are substantial – a little joined up spending, coupled with decentralisation of action, could go a long way.
| | emphasising rather than reducing social exclusion and the digital divide |
If the Government can take a step in this direction, I passionately believe that it is ultimately possible to establish an adaptable and sustainable infrastructure, fully self-supporting on a commercial basis, in almost all areas bar initial education and training provision, to support the renewable induction of new talent and new ventures into the productive engine of our economy within the technology and creative industries.
But maybe the auguries are not so good, amongst the three pilots themselves, there are some simple opportunities to join the dots which appear to have been overlooked; for example:
| · | Economies of scale and scope are critical to reducing costs for the kind of infrastructure that is proposed for the showcase and the broadband cluster. It must surely make sense to mandate that the broadband cluster project should source the hosting and communications infrastructure for the channel. | |
| · | The projects commissioned by the channel are certainly a fertile and pliable source for testing online collaboration needs and facilities of the 'broadband cluster'. | |
Well, the gauntlet is down. Can DTI, as the lead Department for this prospective new initiative and a key influencer with all the spending bodies identified, navigate a way through to use this initiative as a new model for joined-up Government?
We shall see.
Jonathan Wood is founder and director of Haven Ventures, a group specialising in the technology, media and telecoms sectors, and providing services in venture development, turnaround, and policy & programme management. He is currently advisor the the Digital Content Forum's Industry Action Group on clusters. Jwood@havenventures.com ; http://www.havenventures.com
A copy of the DTI/Atos KPMG report can be downloaded from: http://www.dti.gov.uk/industries/digital_content/broadband_pilots_report.pdf
|
