{"id":730,"date":"2019-02-14T15:52:08","date_gmt":"2019-02-14T15:52:08","guid":{"rendered":"http:\/\/blogs.cardiff.ac.uk\/business-school\/?p=730"},"modified":"2019-02-15T12:31:28","modified_gmt":"2019-02-15T12:31:28","slug":"wales-in-the-digital-economy-emerging-evidence-on-the-importance-of-place","status":"publish","type":"post","link":"https:\/\/blogs.cardiff.ac.uk\/business-school\/wales-in-the-digital-economy-emerging-evidence-on-the-importance-of-place\/","title":{"rendered":"Wales in the Digital Economy: Emerging Evidence on the Importance of Place"},"content":{"rendered":"\n
\"\"
Our study of businesses across Wales is beginning to shed some light on the answers to questions around \u2018tech\u2019 readiness<\/figcaption><\/figure>\n\n\n\n

In our latest post, Professor Calvin Jones outlines some of the findings from the Digital Maturity Survey 2018. <\/h3>\n\n\n\n

Most of us now know that technological\nprogress will bring significant changes in the ways economies\nare organized<\/a>, and that these changes will create \u2018winners and\nlosers\u2019 across different occupations, industries and individual firms. <\/p>\n\n\n\n

However, whilst analysis has been extensive,\nnot much has focused on how different\nplaces<\/a>, and different types of places will be affected and how far\nthey will be able to respond.<\/p>\n\n\n\n

What spatial discussion there is has focused\non the \u2018urban-rural\ndivide\u2019<\/a>, with the latter expected to be in a worse position to take\nadvantage of opportunities \u2013 in part related to the (part perceived, part real)\nlack of hard infrastructure in rural areas, including high-speed fixed and\nmobile internet connections. The position is however not so straightforward. <\/p>\n\n\n\n

For one thing, a number of occupations likely to be centrally affected by AI and automation are largely urban based<\/a> \u2013 low and medium skilled white-collar work \u2013 whilst rural areas typically have more firms per capita, and perhaps then a more \u2018nimble\u2019 economic landscape<\/a>. <\/p><\/blockquote>\n\n\n\n

Added to this, previous commentators have suggested that Wales in particular may be badly placed<\/a> to take advantage of emerging technology.<\/p>\n\n\n\n

Superfast Cymru Business Exploitation<\/h3>\n\n\n\n

Our\nstudy of businesses across Wales<\/a>, reporting on their take-up and use of\nsuperfast broadband, is beginning to shed some light on the answers to\nquestions around \u2018tech\u2019 readiness, at least for SMEs and smaller social\nenterprises. <\/p>\n\n\n\n

Here, in partnership with Welsh Government\nand the EU we are trying to map what tech-related behaviours exist, or are\nemerging within Welsh SMEs, with a view to understanding the impacts on their\ncompetitiveness. Whilst we would like (as always) more data, we can begin to\nreport some results.<\/p>\n\n\n\n

\"\"
We characterize almost 17% of rural firms as Digitally Disengaged <\/figcaption><\/figure>\n\n\n\n

To cut to the chase our data suggest that\nthere is a significant difference in the levels of digital take-up between\nWelsh SMEs in urban and rural areas, with the latter lagging behind. This difference\npersists between our 2017 and 2018 survey. With over 400 responses in each year\n(albeit with some firms responding in both) we can be 99% sure these\ndifferences are real, and not a statistical quirk.<\/p>\n\n\n\n

We base our analysis on a Digital Maturity Index,\nwhich bundles a number of factors including broadband access, use of cloud\nservices and IT competencies into a single indicative number that represents\nthe behaviour and readiness of firms. <\/p>\n\n\n\n

Some Emerging Urban-Rural Findings<\/h3>\n\n\n\n

The average score for rural firms in 2018 at\n44.1 was over three points lower than for urban firms (47.5). Whilst this might\nnot sound much, further analysis on behaviours that \u2018clusters\u2019 firms into types\nshows some stark implications. <\/p>\n\n\n\n

At the top end, there is some difference, with 19.5% of our urban sample reaching the highest level of \u2018Digitally Embedded\u2019 compared to 16.4% of rural businesses. However, at the \u2018bottom end\u2019 we characterize almost 17% of rural firms as ‘Digitally Disengaged’, compare to less than half this proportion of urban firms.<\/p>\n\n\n\n

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Source, Digital Maturity Survey 2018 <\/em><\/figcaption><\/figure>\n\n\n\n

Caution should be exercised over these\ndetailed classifications with only 200 or so firms in each column here, but the\npersistence of these results since 2017 is notable. <\/p>\n\n\n\n

Our next task is to understand why these differences occur. <\/p>\n\n\n\n

Is it perhaps the sector, size, age or management of our rural sample that is different or is it something about the nature of rurality itself \u2013 including more limited access to markets or connectivity infrastructure \u2013 that is driving these findings? <\/p><\/blockquote>\n\n\n\n

We will also be publishing our findings on the\ncurrent and future opportunities for areas to benefit from digital technologies<\/a>\nin the coming weeks.<\/p>\n\n\n\n

And Within Urban Places? <\/h3>\n\n\n\n

Whilst the vast majority of the \u2018broadband\nand space\u2019 debate has been about the urban-rural divide, some papers have suggested\nthat urban places are not the same \u2013 and particularly that post-industrial\nurban areas sited next to \u2018tech leader\u2019 hubs do\nnot benefit from technology as much<\/a>. <\/p>\n\n\n\n

We have tried to test this hypothesis with\nour survey data, splitting Wales\u2019 largest city-region into its five (post\nindustrial and poor) \u2018Valleys\u2019 authorities, and its five \u2018Coastal\u2019 (and\nrelatively more prosperous) authorities. Here the data are more limited \u2013 with\nonly around 50 responses from firms within the Valleys in each year we are\nunable to say much about \u2018real\u2019 differences with any certainty. As we\namalgamate the data for different years, this will change (expecting of course\nalmost all firms to move up the digital ladder over time).<\/p>\n\n\n\n

In the meantime, it is worth noting that the\nmaturity index for our sample of Valleys firms was lower in both 2017 and 2018 than\nfor Coastal firms, albeit by a smaller margin than for the Urban-Rural split,\nand with only the 2017 difference (just) statistically significant at the 95%\nconfidence level. Again with strong caveats about small sample sizes note that\nin 2018 double the proportion of Valleys respondents were digitally disengaged\n(10.9%) compared to the Coast (5.2%). <\/p>\n\n\n\n

If these differences are borne out as the data improve, they may reinforce the importance of the different positions of firms in the Valleys and Coast in terms of the factors that are thought to drive digital exploitation. <\/p><\/blockquote>\n\n\n\n

Secondary ONS data show that firms in the\nValleys as a whole are smaller than those on the coast, are less likely to be\nin industries thought to benefit most from technology (professional services,\nfinance and utilities for example), and face a local workforce with lower\nlevels of training and far lower levels of university qualifications. These\ncharacteristics suggest that \u2018policy off\u2019, an increased importance of\nbroadband, AI and automation in economic production may lead to even more\nuneven development across the region.<\/p>\n\n\n\n

The findings reported here are not\nconclusive. We need more survey data, more statistical analysis and more\ncorroboration from our qualitative case study work before we can be sure what\nis driving digital exploitation \u2013 and its commercial outcomes \u2013 across space. <\/p>\n\n\n\n

However, even this early analysis shows some\nintriguing differences that suggest policy in Wales needs to take full account\nof how firms (and by extension people) are responding to the challenges of the\ndigital economy across the full geography of Wales.<\/p>\n\n\n\n

Professor\nCalvin Jones<\/a><\/strong> is Deputy Dean for Public Value and External\nRelations at Cardiff Business School.<\/strong><\/p>\n\n\n\n

This post was prepared in\ncollaboration with WERU researchers, Dr Dylan\nHenderson<\/a>, Neil Roche<\/a>\nand Chen Xu.<\/em><\/p>\n\n\n\n

The Digital Maturity Survey 2018 was carried out by the Welsh Economy Research Unit<\/a> at Cardiff Business School. The School\u2019s research forms part of the Superfast Broadband Business Exploitation project<\/a>, part-funded by the European Regional Development Fund<\/a> through the Welsh Government.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"Our study of businesses across Wales is beginning to shed some light on the answers to questions around \u2018tech\u2019 readiness In our latest post, Professor Calvin Jones outlines some of […]","protected":false},"author":144,"featured_media":732,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_post_was_ever_published":false},"categories":[387],"tags":[28,100,402,404,174,389,388,115,166,406,391,393,396,163,401,128,403,124,390,16,395,111,83,400,397,392,398,171,394,47,399,44,405],"class_list":["post-730","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-digital-economy","tag-cardiff-business-school","tag-cardiff-university","tag-clusters","tag-connectivity","tag-data","tag-digital","tag-digitisation","tag-economy","tag-eu","tag-european-regional-development-fund","tag-geography","tag-industry","tag-infrastructure","tag-internet","tag-it","tag-management","tag-markets","tag-office-for-national-statistics","tag-place","tag-research","tag-rural","tag-sme","tag-social-enterprises","tag-statistics","tag-superfast-broadband","tag-survey","tag-tech","tag-technology","tag-urban","tag-wales","tag-welsh","tag-welsh-government","tag-weru"],"jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/paOfaS-bM","meta_box":[],"jetpack_featured_media_url":"https:\/\/blogs.cardiff.ac.uk\/business-school\/wp-content\/uploads\/sites\/620\/2019\/02\/Wales-pixel-graphic.png","_links":{"self":[{"href":"https:\/\/blogs.cardiff.ac.uk\/business-school\/wp-json\/wp\/v2\/posts\/730","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogs.cardiff.ac.uk\/business-school\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.cardiff.ac.uk\/business-school\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.cardiff.ac.uk\/business-school\/wp-json\/wp\/v2\/users\/144"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.cardiff.ac.uk\/business-school\/wp-json\/wp\/v2\/comments?post=730"}],"version-history":[{"count":7,"href":"https:\/\/blogs.cardiff.ac.uk\/business-school\/wp-json\/wp\/v2\/posts\/730\/revisions"}],"predecessor-version":[{"id":753,"href":"https:\/\/blogs.cardiff.ac.uk\/business-school\/wp-json\/wp\/v2\/posts\/730\/revisions\/753"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/blogs.cardiff.ac.uk\/business-school\/wp-json\/wp\/v2\/media\/732"}],"wp:attachment":[{"href":"https:\/\/blogs.cardiff.ac.uk\/business-school\/wp-json\/wp\/v2\/media?parent=730"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.cardiff.ac.uk\/business-school\/wp-json\/wp\/v2\/categories?post=730"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.cardiff.ac.uk\/business-school\/wp-json\/wp\/v2\/tags?post=730"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}