Improved rural connectivity set to unlock £8.8bn for British manufacturers

With the UK’s geographic digital divide stubbornly persisting, an analysis examining the role improved connectivity could play in supporting economic growth and transforming rural industries has found that improved rural connectivity could increase turnover for rural manufacturing businesses by over 7%, adding an extra £8.8bn to the UK economy.

The great rural revival report from the Centre for Economics and Business Research (Cebr), carried out on behalf of operator Virgin Media O2 (VMO2), surveyed 1,096 decision-makers on tasks related to digital connectivity. The results were broken down by the industries in scope: agriculture, tourism and manufacturing.

The research aimed to derive the difference of quality in rural and urban connectivity, and by how much turnover and employment could increase if rural businesses had excellent digital connectivity. It scaled the results to the size of the 2022 UK economy, presenting two different sets of results: the effects on the rural economy if businesses had perfect connectivity; and the effects if they reached the urban level of connectivity.

The report calculated that improved rural connectivity could boost the UK economy by £65.1bn and increase employment by 6.8%. Of the four major economic sectors analysed for their potential to benefit from improved rural connectivity, VMO2 said manufacturing could expect the greatest rise in turnover and highest relative rise in employment.

The survey found that many factories are located away from cities and urban areas, with nearly half of manufacturing jobs located in rural areas. VMO2 said recent output data showed the sector has been struggling due to the UK’s persistent productivity challenge, with the majority of manufacturers saying they expect economic conditions in the UK to either significantly or moderately deteriorate.

VMO2 stressed that technology has the power to help address some of the challenges faced by the UK manufacturing sector, for example, enabling greater automation to reduce human error and machine failure, and wearable technology that improves safety and effectiveness. Yet it cautioned that many of these new tools require high-quality connectivity, which has historically not been widely available in rural areas.

Around one in six rural manufacturing business decision-makers surveyed said they would like to make greater use of technologies such as remote stock checking/inventory management and fleet management technology. VMO2 suggested that for manufacturers to make the best use of these technologies, they must be underpinned by connectivity that allows teams to access inventory and fleet management data in real time, so they can act on these insights in the moment and optimise their operations.

Offering an example of how connectivity can solve these issues and boost efficiency and productivity, Virgin Media O2 cited British Sugar, with which it has worked to develop the UK’s first multi-site 4G and 5G-ready private network, spanning Norfolk, Suffolk and Nottinghamshire – a total operational area of 2.17km².

This has supported the installation of multiple internet of things (IoT) devices and the development of several “factory of the future” use cases. These include optimising the production process, introducing artificial intelligence (AI) to the factory to monitor operations in real time and predict downtime in advance, and enabling the use of robotics to streamline production.  

“The manufacturing industry is key to the success of the UK economy, and our Great rural revival report demonstrates that improved connectivity can unlock an additional £8.8bn of further growth for rural manufacturing, as well as increasing employment by almost 8%,” said Virgin Media O2 chief technology officer Jeanie York.

“The last decade has seen fixed and mobile networks rolled out to new corners of the UK and we are committed to continuing this roll-out. By working closely with industry partners, the UK government, planning authorities and landowners, we can deliver the essential network upgrades that will enable rural manufacturers to adopt new technologies and continue to thrive,” York added.

Nandini Chakrovorti, associate director of digital engineering at the UK’s Manufacturing Technology Centre, added: “In a world of reduced resources, manufacturers are under increasing pressure to optimise their processes to extract the maximum value at all times whilst minimising their impact on the environment.

“Technologies such as AI, robotics and digital twins all significantly contribute to this endeavour. But connectivity is key to maximising their impact in real time, so that manufacturers can increase their productivity and global competitiveness in a sustainable way.”