New research makes digital inclusion an economic imperative

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Press release
13 October 2009

New research makes digital inclusion an economic imperative

New research from PWC and Champion for Digital Inclusion Martha Lane Fox puts the use of computers and the internet into an economic as well as social context. UK online centres today welcomed the report as a new starting point for cross-sector, cross-party and cross-government action on digital inclusion.

The research adds to the growing wealth of evidence showing how digital and social inclusion intertwine, and cost government, business and ordinary families dear. Off-line households, for instance, could be missing out on average savings of £560 a year from shopping and paying bills online, and all in all the economic benefit of getting everyone online in the UK are estimated to be £22billion.

Helen Milner is Managing Director of UK online centres, and a member of the taskforce supporting Martha Lane Fox in her Champion role. Helen says: "Digital inclusion has for too long sat on the sidelines of mainstream policy-making, dismissed as a fluffy liberal nice-to-have. This research counts the cost of digital exclusion in pounds as well as in human potential, and it's a great starting block for Race Online to get digital inclusion up to speed.

"Our own research shows that in the economic downturn, the digital divide has got narrower, but deeper. There are less people excluded, but those left behind are now harder to reach and engage than ever before. Under Martha's leadership and the Race Online banner, the digital inclusion community has a unique chance to really make a difference to that new divide, and make sure the people with most to gain from technology get the best support and best route of access for them. It's only by working together that we can make funding and resources reach more people in more grass-roots places, and start making a real difference to the four million most deeply excluded people identified in today's research."

Martha Lane Fox is supporting UK online centres' Get online day campaign this October, as part of the existing framework of digital inclusion activity. It's also supported by the government's Learning Revolution Festival, NHS Choices, Intel and Ofcom. Martha will be on hand in Barnsley on Friday 23 October to celebrate the day and urge people to pledge their support in helping others get online and enjoy the benefits of technology. She says: "Get online day is a great way for off-line people to take the plunge and get started with technology, and Barnsley is a fantastic example of how communities can benefit from being online. I'm really looking forward to meeting some of those people whose lives have already been transformed by the internet."

Ends

For more information on UK online centres, please contact Abi Stevens on 0778 666 0689 or astevens@ufi.com

Notes to editors

Digital inclusion

  • The government recommended the role of a Champion for Digital Inclusion who would be independent of government, industry and the third sector. Martha Lane Fox was delighted to accept this role in June 2009 for a period of two years
  • Digital Inclusion is a cross departmental government funded but independent organisation set up by Martha Lane Fox to support her work as the UK's Champion for Digital Inclusion
  • Digital Inclusion is independent of government and will build partnerships across the public, private and third sectors to support the 17 million people in the UK who don't benefit from online technologies. Digital Inclusion will particularly focus on the new tools that can help the most vulnerable 6 million people of this group.
  • Martha Lane Fox co-founded lastminute.com, Europe's largest travel and leisure website, in 1998, then went on to co-found and chair the private karaoke chain, Lucky Voice. In 2007 she launched Antigone, a grant-giving foundation that supports education, health and criminal justice charities to reflect her commitment to social justice. She is non-executive director at Marks & Spencer plc, Channel 4 Television and Mydeco.

 

Race online research

The overall potential economic benefit of getting everyone online is in excess of £22bn, and is made up as follows:

 

Annual saving (£ billion)

Lifetime saving (£ billion)

Online shopping

4.50

8.85

Home access for children

 

10.80

Improved ICT skills for the employed

 

0.56

Improved access to employment for the unemployed

 

0.56

Government efficiencies

0.90

1.77



22.54

Research was conducted by PricewaterhouseCoopers LLP (PwC) between 16th September and 9th October 2009.

  • The PwC research estimates the potential benefits to individuals, government and the wider economy of getting more people online.
  • The research focuses on four key areas of potential benefit: education and employment; health and wellbeing; transforming contact and transactions with government and online shopping.
  • Previous research on digital inclusion has tended to focus on social and consumer benefits. This is the first time that research has brought together the economic case for getting more people online.
  • The research defines a person as offline if they have never used the internet: in addition to the 10 million adults who have never used the internet, there are nearly two million adults who have not used the internet in the last three months.
  • Whether a person is socially excluded is based on several factors including income, employment status, health and education.
  • Evidence that access to a computer and the internet can boost children's educational performance and lifetime earnings has been used to underpin the Government's case for the Home Access Programme: it has been used as the basis for estimating the benefit of extending similar access across all digitally excluded children.
  • The consumer saving of £560 a year is an average across all digitally excluded households: for the 20% of households on the lowest incomes, the average saving is £300 a year.
  • The consumer saving is equivalent to around £3 in every £100.
  • The biggest consumer savings are estimated to come from purchases of energy, insurance, clothing and package holidays.
  • The estimates of consumer savings are based on work undertaken for the Post Office.
  • Evidence from research by the Centre for the Economics of Education suggests that ICT skills can help individuals to earn 3-10% more than their peers without such skills.
  • Each person who can improve their ICT skills by moving online can expect to increase their lifetime earnings by over £8,000.
  • If 5% of digitally excluded unemployed could find work by using job websites it would deliver an estimated £560million to the UK economy.
  • Providing online access has the potential to reduce some of the barriers to unemployed people finding work: the estimated benefits are based on 5% of the digitally and socially excluded unemployed being able to find work more quickly.
  • It is estimated that the benefit to the UK economy would be between £560 million and £1.3billion from moving adults online and into employment depending how effective any support is.
  • Government can potentially save between £3.30 and £12.00 for each offline contact which is moved online.
  • If all 10 million digitally excluded adults could undertake one more contact or transaction online each month (rather than relying on offline channels), this would save at least £900 million a year in customer contact costs
  • It was outside the remit of this research project to suggest solutions for how to help more people get online or to estimate the costs of any potential solutions.

Get online day and UK online centres

  • Get online day is a campaign from UK online centres, supported by Ofcom, Intel, NHS Choices and the government's Learning Revolution Festival
  • myguide - www.myguide.gov.uk - offers a free, easy to use email service and web search facility from a clean, simple homepage, plus taster courses to help people get to grips with computers and the internet. The idea is to make the internet available and accessible to those who have never used it before - whether because of lack of motivation, skills, confidence, or even disability. myguide allows people to personalise and save their settings, change screen colours or font sizes, and choose to have the text read to them without needing additional software. The service has developed with input from users and stakeholders including AbilityNet and RNIB. myguide courses are arranged across three levels - starting, using and understanding. The journey helps users track their learning progress and build their own journey based on the subjects that interest them.
  • UK online centres provide millions of people with access to technology and support in using it. They offer free or low cost access to the internet and email, deliver online courses and encourage people to progress onto further learning. For more information please visit www.ukonlinecentres.com. UK online centres are managed by Ufi, the organisation also behind learndirect