Digital connectivity investment could unlock 500,000 jobs, £70bn of GDP growth by 2026

As the newly merged company nears completion of its gigabit roll-out, research conducted on behalf of Virgin Media O2 has shown a clear link between investment in digital connectivity and national economic growth, highlighting that investment in full-fibre and mobile connectivity could unlock more than half a million jobs by 2026 and help tackle inequality.

The findings are revealed in the company’s first Digital connectivity index, which used thousands of OECD datapoints to measure how individuals and organisations can connect with one another and the rest of the world through high-quality internet access.

The research was commissioned by Virgin Media O2, as part of its mission to upgrade the UK. The company has committed to investing at least £10bn over the next five years, with plans to expand 5G coverage to cover 50% of the population by 2023 and upgrade its entire fixed network to full fibre to the premises by 2028.

The index assessed the quality of connectivity infrastructure across OECD countries and found the UK is currently ranked joint-eighth out of 24 OECD countries publishing complete digital connectivity datasets – well into the top half of countries scored and just ahead of Germany, Portugal and Ireland.

Between 2011 and 2019, the UK performed better than the OECD average, ranking in the top third of improvers in the Index of digital connectivity as billions of pounds of investment in fixed and mobile networks deliver benefits for consumers and businesses.

The index also revealed how upgrading mobile and broadband networks can support economic growth and help the country to level up. If the UK were to become the OECD leader, it may unlock £69.78bn in extra GDP between now and 2026; 510,000 new jobs between now and 2026; consistently higher economic growth rates every year.

Indeed, Virgin argued that the UK’s GDP growth rate would be almost a full percentage point higher (0.88) by 2026 and that every UK region could benefit with more than 85% of new jobs created outside of London. The North West may see as many as 56,000 new jobs created, while the Midlands and Scotland could benefit from an additional 82,000 and 42,000 roles respectively.

Small and medium-sized enterprises could be among the main winners, creating the lion’s share of the new roles. Regional economies could see huge boosts, too, with gains worth £4.65bn to Yorkshire, £2.46bn to Wales, £5.19bn to the South West and £1.61bn to Northern Ireland.

Yet, while the research showed that the UK has improved its level of digital connectivity well above the OECD average between 2011 and 2019, addressing the UK’s digital divide is key to making further gains.

Specifically, people living in more deprived areas of the country, in rural areas and lower income households, are most at risk of digital exclusion.

As many as a 10th of those with a household income of £15,000 a year or less do not have an internet connection at home, while those living in rural areas are twice as likely to report suffering from poor internet connections as those living in urban areas.

Assessing the survey and what it revealed, Virgin Media O2 CEO Lutz Schüler noted that the importance of digital connectivity to the UK’s future couldn’t be clearer, and that the role his company played as an industry couldn’t be more profound.

“With economic growth, new jobs and a fairer society at stake, we’re already taking a lead with a commitment to invest £10bn over the next five years,” he said. “We’re turning up the dial on the national recovery and helping the country to climb up the international connectivity league tables to create a brighter, more prosperous future for every corner of the UK.”  

Scott Urban, senior advisor at research firm Oxford Analytica, added: “The Digital connectivity index shows telecom’s key contribution to levelling up through spurring higher growth and creating new jobs.”