Patrick Barwise, emeritus professor at London Business School and chairman of Which?, argues that the goal of Digital Britain should be leadership in e-commerce, as well as online adoption and public services.

Getting people online faster than in other countries should be at the heart of the Government’s long-term vision for Digital Britain.

This would build on our competitive strength as what The Boston Consulting Group (BCG), in its 2010 report for Google, The Connected Kingdom, called the world’s leading e-commerce economy, with the highest online percentage of both shopping and advertising, 36% of global internet traffic and £2.80 of internet-related exports for every pound of imports.

Of course we should aim still to be the world leader in the private use of the internet by consumers and businesses in 2020. But we should build on our competitive strength in e-commerce by also aiming to be the world leader in online adoption and online public services.

Public sector ICT investment is about £18 billion/year, much of it in online public services. The aim is to go “digital by default” as soon as possible, increasing service quality while reducing costs. But digital by default will work only if users are already online. We still have over 8 million adult fellow citizens who are not. Many are heavy users of public services – typically: old, poor, female, and living alone and/or disabled.  Others are part of a younger, mostly unemployed, digital underclass, increasingly left behind by the modern economy.

A strategy for Digital Britain 2020 should aim to bring these people online faster than in other countries, for both moral and financial reasons.

The moral case is that a few basic online applications like email, the web and online shopping would transform many of these 8 million lives: saving them time and money, reducing their isolation, re-engaging them in wider society and the economy – and enabling them to use online public services. Getting people online is a powerful and cost-effective way of reducing inequality.

The financial case is just as strong. Accelerating online take-up would bring huge economic benefits by reducing the cost of public service delivery, helping people get jobs, supporting the development of 21st century skills and enabling British businesses to become world leaders in public and commercial online services for poorer people. A small extra investment in getting people online would greatly increase the return on the much bigger investment in online public services (and increase the ROI for superfast and mobile broadband).

So, how can we accelerate online adoption? Superfast broadband itself won’t help much. It will be great for those already online but do little to bring in those who are not. The BCG report found virtually no correlation between the availability of fast broadband and internet adoption.

But through the work of Ofcom, the Oxford Internet Institute, the LSE’s Media Policy Project, the BBC, Race Online 2012 and the UK Online Centres, we know how to bring people online. We just aren’t resourcing it enough and supporting it with cabinet-level political leadership and top-down marketing communications.

At the grass roots level, Race Online and partners such as Age UK are doing a terrific, very cost-effective, job bringing people online. But with minimal resources, the current take-up rate won’t deliver world leadership in online adoption and, therefore, in the usage of online public services.

The main government-funded effort in getting people online is through the 3,800 UK Online Centres. They know how to help people see the benefits and relevance of the internet, overcome their fears and get online. But their budget is just £7.2 million for the 16 months ending next March with no guarantee beyond that.

Meanwhile, there’s no top-down marketing of internet adoption. Here we have a resource not available to other countries – the BBC. No other country has such a successful and well-trusted public broadcaster. We also have Digital UK, in which the BBC is a main partner and which has almost completed digital TV switchover – on time and £230 million below budget, all of which will now go to support superfast broadband.

Digital UK’s “Digit Al”

Digital UK has developed the appealing character Digit Al and has expertise in communicating an emotionally challenging digital technology message to vulnerable consumers. Under current plans, Digit Al will retire this October and Digital UK will be scaled back and probably wound up at the end of next year. Surely, we should be using the BBC, Digit Al and some of Digital UK’s proven expertise to help drive online adoption among the 8 million?

To conclude, the Government’s long-term vision for Digital Britain should have two aims. First, to ensure that we’ll maintain our world leadership in e-commerce. I think the policies we expect to see outlined in the Communications Green Paper will help us achieve that.

The second aim is that we will also be a world leader in online adoption and online public services. I don’t think current policies will achieve that but most of the required building blocks already exist and doing so won’t involve huge extra resources. A 0.5 percent levy on public sector ICT investment would generate an additional 90 million pounds a year. That’s still only about half the subsidy as compared to superfast and mobile broadband but, if well used, enough to transform the rate of online take-up.

Putting online adoption at the heart of Digital Britain would help reduce inequality and pay for itself many times over, mainly by accelerating the usage of the broadband networks and online public services in which we’re rightly investing so heavily, but also by helping ensure that these are genuinely user-focused and therefore more likely to be used by those who are online.

This, to me, is such a no-brainer that I hope it will attract cross-party support.

This blog is an edited version of a speech given at the Westminster Media Forum event on the Communications Green Paper. It is connected to The Social Digital Symposium that will take place on 22 March 2012 at the London School of Economics, from 10:30am – 3:30pm, organised by the LSE Media Policy Project and UK Online Centres. For more information about the event, contact peter.farrell@ukonlinecentres.com.