Much more than connectivity

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While connectivity in rural areas remains a concern, other indicators carry more worrying implications, says Paul Hearns

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20 May 2019 | 0

The National Broadband Plan (NBP) is mired in controversy at the moment, and under heavy scrutiny, as is only right and proper. The current delay in it being brought before cabinet is only the latest in a series of setbacks and stumbling blocks.

The need for a national strategy to bring broadband to rural areas is unquestioned, but in a typically Irish way, we seem to have got lost somewhere with underestimations, creeping scope, galloping costs and complexity.

There is no question that many rural communities and business would benefit greatly from the availability of good quality, affordable connectivity. Schools, public buildings, Garda stations and more, would all be able to take advantage if such services were available. Indeed, we have seen just recently the good news story of how Three Ireland has partnered with the Arranmore Business Council and Donegal County Council to establish a digital hub to service the island of Arranmore, 5km off the coast of Co Donegal. Not only will the 469 residents benefit, so will a number of local business and community facilities, including in Scoil Athphoirt where students can now use interactive whiteboards, research online and participate in online learning.

But despite the obvious benefits of these kinds of amenities, it is unlikely that making broadband access ubiquitous across rural communities will usher in some kind of golden age of smaller business activity that will turn small towns and villages into centres of ecommerce.

Allow me to explain.

The Irish domain registry agency IEDR, does a regular report called the SME Digital Health Index. This is a report that looks at the digital health of smaller businesses in Ireland and critically, includes figures for micro enterprises, those that are 10 employees or less. This is vital, as other reports, some from the likes of European institutions, have suggested that Ireland is a front runner in digitally enabled smaller businesses. However, some 92%, according to recent digital health index reports, of Irish enterprises are these micro enterprises that do not figure in the European reports. Therefore, the rosy picture of Ireland as a digital leader for smaller businesses is not necessarily representative of the vast bulk of small Irish businesses.

When these micro enterprises are included, the Digital Health Index (Q4 2017) says nearly three-quarters of Irish SMEs do not engage in ecommerce and just less than 20% of Irish SMEs have an online presence.

Even in the latest report from late 2018, with a sample that includes a large cohort of micro-businesses (83%), just 12% of SMEs say they can process sales online, and only 25% believe they are already doing all they can on the Web. That leaves an awful lot of small businesses who have either little ambition or any online capability at all.

Now these are countrywide figures and would of course include some businesses that in the very rural areas that the National Broadband Plan is set to address, but the overall implication is actually far worse: Irish small to medium enterprises are simply not taking advantage of digital tools to advance their businesses.

The old adage of ‘if you build it, they will come’ simply does not appear to be enough when it comes to smaller businesses. While the excellent SME digital index has shown steady improvements in recent years, the fact remains that smaller businesses are simply not doing what they need to allow their customers to digitally engage with them.

There are numerous reasons for this, and time, money and skills are all issues for these organisations, but access to broadband is not the only bar to digitally enabling smaller businesses.

The IEDR has a set of specific recommendations in its 2018 report:
• “A Government-led nationwide Digital Activation Campaign that demonstrates the value of online and e-commerce.
• Commission a ‘one-stop shop’ online resource with comprehensive, step by-step guides to building a website, integrating e-commerce, digital marketing, and analytics and software usage – a digital ‘Citizens’ Information’ guide for SMEs.
• Hold practical and interactive ‘Building an online presence’ workshops for SMEs hosted by LEOs and digital consultants.
• These workshops would teach SMEs’ staff how to build the presence and manage the relevant digital tools.
• Set a national goal to have the majority of Ireland’s SMEs reach an ‘A’ grade in ‘transacting’ in the Digital Skills Assessment by 2023.”
The agency must be commended for its various initiatives to tackle this, along with various government initiatives to tackle the issue, but more needs to be done.

Smaller business owners and founders need to be made aware of the fact that there is a rapidly growing preference among consumers and businesses alike, for digital engagement. This applies to everything from straight sales, to customer support and marketing and on to supply chain, up and down stream.

The message must be simply and strongly stated that to survive in today’s digital world, all businesses will need to be able to interact digitally. The days of being offline are over. From filing tax returns, to taking orders and responding to customer queries, digital channels can be force multipliers for small businesses to allow them to do more of the things that contribute directly to the bottom line. Until this is understood and acted upon, those micro enterprises will not only fail to grow, they will struggle to survive.

However, to return to the question of access, this is a critical point. A business may be fully aware of the benefits of digital, but if their only option for connectivity is something like a satellite connection, then what they can do digitally is truly limited.

“Smaller business owners and founders need to be made aware of the fact that there is a rapidly growing preference among consumers and businesses alike, for digital engagement. This applies to everything from straight sales, to customer support and marketing and on to supply chain, up and down stream”

Despite great strides being made with satellite connectivity, the reality is that even though bandwidth is not necessarily the problem, latency is.

Many satellite packages now provide 30Mb/s services with generous or effectively unlimited data from €39.99 per month, which is competitive with fixed broadband connections. However, latency can be as high as 6-800 milliseconds.

To put that in context, a fibre to home connection is in the region of 4ms, with a fibre to cabinet service sub 20ms and a plain old DSL connection offering sub 30ms.

With the scope of coverage for the NBP having crept from 11,00 rural villages and communities in 2014 to now 540,000 homes, farms and businesses, the costs have rocketed, as has the implementation time frame. While much work needs to be done to deliver connectivity to these areas efficiently, effectively and with an eye to the future, much more needs to be done for these efforts to have the desired economic effect.

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