Business development · 13 October 2016

Government urged to create a “digital revolution” for the Northern Powerhouse

The report has suggested that providers have failed to deliver appropriate high-speed broadband access for small firms

Investment in digital skills and infrastructure will be crucial in the efforts to create a Northern Powerhouse that is driven by small businesses, a new study has claimed.

The “Unbuffering Business” report, released by the northern division of the Institute for Public Policy Research (IPPR) think tank – of which the Northern Powerhouse is a central area of research – outlined a series of recommendations that would ensure the right growth for small firms in the North of England.

The study identified two obstacles to growth for small business owners. Firstly, that investment in infrastructure has failed to provide full access to high-speed internet, as “small businesses are not being prioritised within the current rollout of broadband”.

The think tank suggested that provision of high-speed broadband should be guaranteed in business parks and designated enterprise zones over domestic properties, with further subsidies provided for better connectivity.

The second barrier for small firms was identified as a lack of relevant skills to take full advantage of online tools. The report claimed that “the current provision of skills training remains piecemeal and partial”.

Regional devolution of funding to target skills and development was advised. The study: “To this end, the government should create a pooled pot of digital support that aims to address government priorities but which is devolved to local enterprise partnerships.”

The IPPR report also encouraged the government to offer continued investment in the growth hubs that support enterprise, identifying such centres as an “important local platform” that offer networks of innovation.

“At a cost of £12 million per year, growth hubs are relatively low cost, and there is emerging evidence of the economic benefits of this continued investment,” the report advised.

The Federation of Small Businesses (FSB) has backed the study’s recommendations, urging the government to commit to its initial support for the Northern Powerhouse.

In a statement, national chairman of the FSB, Mike Cherry, echoed the measures proposed, and stressed the importance of training and investment in digital skills for small firms that have separate requirements to larger companies.

“More small businesses are looking to incorporate digital technology. But small business owners responsible for sales, payroll, production, HR and customer care need a different kind of assistance to large businesses with specific IT teams,” he said.

Cherry continued by highlighting the demand for investment among small business owners operating in the North of England: “Our research shows that firms want the Northern Powerhouse to focus on improved transport links, digital infrastructure and education and skills development.

“The current strong support for projects like the Northern Powerhouse rests on the government’s ability to deliver on both ‘hard’ and ‘soft’ infrastructure highlighted in this report.”

George Osborne is in work again – find out about his new role as chair of the government’s Northern Powerhouse think tank.

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Praseeda Nair is the editorial director of Business Advice, and its sister publication for growing businesses, Real Business. She's an impassioned advocate for women in leadership, and likes to profile business owners, advisors and experts in the field of entrepreneurship and management.

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