Scottish 4G Infill Programme Evaluation

3 Benefits

3.1 Introduction

3.1.1 Prior to developing the research programme, this chapter sets out the results of a high-level review of the wider literature on the benefits of improving digital connectivity.

3.1.2 While the S4GI Programme is focused on providing 4G mobile connectivity, as set out in the previous chapter, the provision of 4G may also enable some individuals to access home broadband or an improved home broadband connection via a 4G FWA. As such, the review below considers the benefits of improved connectivity more generally rather than focusing solely on 4G or mobile connectivity.

3.1.3 As well as the wider literature on digital connectivity, the discussion also draws on examples of the benefits of the S4GI Programme which have already been identified within the ‘Use Cases’ (case study examples) which Scottish Government has developed to date.

3.2 Employment

3.2.1 The primary employment benefit for the individual of improved digital connectivity identified within the wider literature is the ability to work from home (permanently or as part of a flexible working arrangement) rather than travel into work. This widens the range of employment opportunities available and can lead to:

• New entrants into the labour market as previously economically inactive people join the labour force
• Better matching of labour to jobs as employees are no longer limited to jobs within a commutable distance from their home
• Improved employee productivity as a result of the reallocation of commuting time to productive activities; fewer work distractions; and reduced absenteeism
• An increase in the number of hours worked and / or higher wages as a result of the above – for example, the evaluation of the UK’s Superfast Broadband Programme found that hourly earnings increased by 0.7% in the areas impacted by the scheme compared to other locations^[19]

3.2.2 Having the ability to work from home also ensures continuity of employment during emergencies, such as the COVID-19 pandemic.

3.2.3 The above employment benefits can be particularly important in rural areas where commuting distances are higher / prohibitive and employment opportunities are much more limited, with the ability to access employment helping to support the overall viability of the area. This is discussed further in Section 3.8 below. The ability to work remotely can also help certain groups, such as women, carers, and those with disabilities, to enter the labour market or work more hours. This helps to increase participation levels and can help to reduce the gender gap in employment which is typically higher in rural communities^[20].

3.2.4 In terms of mobile connectivity, the ability to connect to the internet and access resources while on the move can also lead to productivity benefits for employees. This may be particularly useful for those working in roles which require frequent travel within the community, such as delivery drivers, home carers, tradesmen, and midwifes etc. For example, the ability to upload information on deliveries to the Royal Mail delivery system while in the field was identified as a specific benefit provided via the S4GI Programme in the Western Isles^[21].

3.3 Education and Training

3.3.1 Access to the internet also opens-up access to a wide range of remote and blended^[22] education and training opportunities, including formal courses provided entirely online as well as access to less formal online courses^[23], online information, research, and videos.

3.3.2 The availability of such services in rural areas acts to mitigate the barriers, such as long travel distances, travel costs and the lack of transport connectivity to accessing more traditional face-to-face educational and training opportunities. This therefore can help increase participation, improve equality of access between rural and urban locations, and reduce out-migration, particularly amongst younger cohorts (see section 3.8 below).

3.3.3 Enhanced connectivity can also provide benefits at the school level, helping to enhance the quality of education, through for example^[24]:

• Enabling access to teaching resources and innovative educational tools, such as remote field trips, which can improve the quality of education and enhance pupil engagement
• Enabling small rural schools to coordinate classes together through teleconferencing, reducing the negative impacts associated with staff shortages
• Improving access to educational content and facilitating remote learning outside of school

3.3.4 In addition, the ability to learn from home also ensures continuity of education, at both school and higher levels, during emergencies, such as the COVID-19 pandemic.

3.3.5 Ensuring people have access to digital connectivity is also a pre-requisite for equipping people with the digital skills which are increasingly important in the job market. For example, recent research indicates that 75% of all job advertisements in Scotland which are classified as ‘low skilled’ now require baseline digital skills^[25]. Without the necessary connectivity, establishing these skills is challenging, leading to, and exacerbating inequity between those living in digitally connected and non-connected areas.

3.4 Health and other Public Services

3.4.1 Improved digital connectivity can also enable individuals to access online services, including telemedicine and a wide range of government e-services, helping to increase participation and reduce costs for providers. In Scotland, there has been a growing move to online service provision in recent years and this change is set to continue, with the Scottish Digital Strategy, published in 2021, setting out an action to ‘transform key public services’ so that ‘it is easier to deal online with all levels of government’^[26]. Those without digital connectivity will clearly be excluded from these opportunities.

3.4.2 In the health field, in part spurred by COVID-19, there is growing use of both telephone appointments and telemedicine whereby patients and healthcare professionals connect remotely rather than travel into healthcare settings. For example, the Scottish Government’s Attend Anywhere video consultation service provides a purpose-built platform to enable patients and healthcare professionals to connect remotely and is used by all 14 health boards within Scotland^[27]. Various benefits of such approaches are identified within the literature, including:

• Travel time and cost savings for patients – such savings can be particularly beneficial for those living in more isolated locations
• Improved access for hard-to-reach groups – including patients with mobility issues and those that find travel challenging due to illness
• Individuals seeking medical help sooner – which in turn can lead to the earlier detection and treatment of medical conditions
• Faster and more direct access to specialists – which can again be particularly beneficial for those living in remote settings who may otherwise be reliant on specialists visiting their home or local clinic

3.4.3 There is also evidence that telemedicine can lead to improvements in general health amongst the population. For example, a recent European Commission research report found that increasing the adoption of telemedicine by 5% could lead to a 1.7% increase in citizen’s Quality Adjusted Life Years^[28] and a 3.6% fall in mortality^[29]. Such improvements can also feed through to employment productivity benefits through fewer sick days and / or less time spent undertaking medical appointments.

3.4.4 The adoption of telemedicine and e-services also leads to significant savings for service providers through reduced employee travel times and improved efficiency as well as, in the case of the NHS, savings associated with, for example, the earlier detection and treatment of illnesses; reduced need for hospital admissions / earlier discharges; and enhanced monitoring post treatment^[30].

3.5 Online Shopping and Banking

3.5.1 In addition to public services, internet access also opens-up opportunities to access online and mobile shopping and banking services. With respect to 4G connectivity specifically, the provision of mobile connectivity allows users to access two factor authentication for payments whereby a code is sent to a mobile device. Two factor authentication is increasingly used as a cybersecurity method particularly by online banking providers and the inability to receive texts due to a poor mobile signal can therefore act to restrict access to online banking services. Undertaking shopping and banking online saves significant travel time which can be spent doing other, more productive activities. Online shopping also provides consumers with choice and savings through greater competition. It could be argued that the benefits of online and mobile shopping are perhaps more substantial in remote locations where choice is limited (and therefore prices are higher), and travel times are longer.

3.5.2 While access to online shopping and banking services brings benefits, however, there are also negative impacts, with increased use of online services contributing to a decline in the number of local shops, the closure of bank and building society branches, and the removal of ATMs. For example, in Scotland, the number of bank and building society branches fell by 34% between 2012 and 2021, while the number of ATMs fell by 16% between 2018 and 2022^[31].

3.5.3 The closure of such services can be particularly challenging in rural communities where local shops and bank branches can play a vital role in community cohesion. In addition, the movement of services online may have a particular impact on groups in society who do not use online services, such as older people or those on lower incomes, who may experience feelings of increased isolation.

3.6 Enhanced Levels of Wellbeing

3.6.1 There is much discussion in the literature on the ability of improved digital connectivity to improve levels of both individual and community wellbeing. Various mechanisms for this are identified within the literature, including:

• reduced social exclusion and isolation as a result of enhanced opportunities for social interaction, including video / online calls and messaging with family and friends and social media platforms such as Facebook, Twitter and Instagram^[32]
• improved feelings of connectedness through access to online news media
• access to a wide range of entertainment opportunities and streaming services
• access to higher quality jobs, education, and health services indirectly contributing to social inclusion and increased levels of wellbeing
• reduced feeling of injustice / missing out as compared to people located elsewhere in the country
• greater potential for communities to organise online leading to improved community resilience^[33]
• improved physical well-being through access to digital health devices which record and track activity
• increased independence of people with disabilities through access to online services which help to reduce dependence on others
• with respect to mobile connectivity specifically, there are also personal safety benefits associated with having mobile phone coverage in isolated locations – for example, the S4GI Programme has provided mobile coverage within the Ae Forest in Dumfries and Galloway where there was previously limited or no coverage^[34].

3.6.2 While improved digital connectivity has the potential to improve wellbeing in various ways, it should be noted that there is also the potential for some negative impacts. For example, the movement to online connections can lead to a decrease in opportunities for face-to-face interactions. As discussed above, this can be particularly challenging for those who are unfamiliar with or do not, or cannot use online resources who can feel further excluded from society.

3.6.3 It is also worth noting that capturing wellbeing benefits can be particularly challenging, in part because as they cannot be directly quantified or monetised as is the case with economic benefits. For example, the evaluation of the UK’s Superfast Broadband Programme^[35] examined the wellbeing impacts of the programme in a number of ways as set out below, with each producing varying results and the evaluation ultimately concluding that further research in this area was required:

• Wellbeing valuation which linked the broadband programme to well-being data in national surveys – which found that there was a wellbeing uplift equivalent to £222 per year per premise compared to premises without broadband access^[36]
• A postal survey of upgraded and non-upgraded households and in-depth interviews – which found that there was no statistically significant difference in personal wellbeing between those living in upgraded and non-upgraded households
• A review of personal wellbeing reported in longitudinal social surveys – which indicated there was no significant effect on the population living in upgraded areas
• House price analysis – based on a revealed preference method to identify the value house buyers placed on broadband connectivity which found that the programme led to an increase in house prices of between 0.56% and 1.16%

3.7 Benefits for Local Business

3.7.1 Improved connectivity has the potential to provide a range of economic benefits for local businesses. The mechanism for this identified in the literature include:

• Homeworking – from a business perspective, this can lead to the following benefits:
  • Better matching of labour to jobs as employers are not limited to employees who are geographically contiguous to them
  • Improved employee productivity as a result of the reallocation of commuting time to productive activities; fewer work distractions, and less absenteeism
  • Improved recruitment and retention as a result of the above
  • Reduced overhead costs, including office space where this is no longer required or can be reduced and reduced travel times / expense where connectivity enables lead to reduced business travel
• More efficient day-to-day management – through the use of online administrative systems and services, such as online banking / faster payments and cloud-based computing
• An increase in the quantity and quality of training for employees due to the availability and lower cost of online courses^[37]
• More efficient promotion via online webpage and / or social media
• Product or service innovation – whereby improved connectivity facilitates the delivery of new goods and / or services
• Access to new markets – improved connectivity can open-up access to new markets via online sales including through business websites and e-commerce sites such as eBay and Amazon. Access to such sites can be a particular driver for the establishment of home-based companies and sole traders working from home.

3.7.2 With respect to mobile connectivity, several benefits with respect to local businesses are identified within the S4GI Use Cases^[38], including:

• Promotional benefits, particularly for tourism attractions due to visitors being able to check-in, leave reviews, and upload pictures to social media tagging the attraction
• Resilience benefits during periods of broadband outages – reference in this regard was made to 4G providing a back-up and ensuring that it is possible to take payments when broadband is unavailable. This is particularly important given the increased use of contactless, online, and mobile wallet channels and the decline of cash payments, a long-term trend which was significantly accelerated during COVID-19^[39].
• Benefits associated with tourists being able to use Google Maps and other mobile navigational aids to access tourist attractions
• An enhanced tourist offering as a result of enhanced connectivity with tourists placing a high value on e.g., staying in locations where there is a reasonable level of connectivity. This could potentially lead to higher visitor numbers, with consequential impacts on visitor spend and business turnover.

3.8 Support for Rural Communities

3.8.1 Access to digital connectivity can also play a significant role in the continued survival of rural communities.

3.8.2 There can sometimes be a ‘circle of decline’ (see Figure 3‑1) in rural locations whereby limited employment and education opportunities leads to the outmigration of, particularly younger cohorts. This leads to a lack of critical mass for services / infrastructure and lower rates of business creation which further reduces employment and education opportunities. Enhancing digital connectivity can help to break this cycle as improved connectivity can make activities, including the delivery of education, services, and business activities viable in less central locations.

3.8.3 Form an economic perspective, where the business benefits identified above lead to an increase in sales either directly as a result of opening new channels to market or indirectly as a result of productivity gains, there can be a resultant increase in turnover and a potential increase in demand for workers which creates jobs in the local economy. For example, it is estimated that firms in the area benefitting from the Superfast Broadband Programme saw turnover grow by almost 1% between 2012 and 2018 while local employment increased by 0.6%, leading to the creation of 17,600 local jobs by the end of 2018^[40].

3.8.4 It is also the case that enhanced connectivity can lead to both people and firms relocating to the areas benefitting from the enhancements which in turn helps to diversify and develop the rural economy. Evidence from the Superfast Broadband Programme indicates that a share of the local economic impacts identified above were a result of businesses relocating to the area, with the number of businesses in the areas benefitting from the improvements growing by 0.5%^[42]. There was also evidence that the enhancements in connectivity stimulated in-migration, with the number of patients registered with GP surgeries in the areas affected increasing by between 3-6% on average and suggestions that the number of pupils in affected schools had increased^[43].

3.8.5 While increased in-migration is likely to have positive impacts in terms of rural sustainability, there may also be negative impacts where there is no expansion in public service provision. For example, the evaluation of the Superfast Broadband Programme noted that increased in-migration to the areas affected by the improvements had appeared to place pressure on some public services such as access to GP care and that this may have partly off-set positive well-being scores amongst the population^[44].

3.8.6 It is noted that local improvements in business productivity as a result of enhanced efficiency can also be translated into an increase in overall economic output (GVA). However, where an increase in turnover is a result of firms moving from other locations, there will be a consequent loss of economic activity in these locations (displacement) and therefore such benefits would not translate into national level benefits.

3.9 Reduced Carbon Emissions

3.9.1 There is much discussion in the literature on the potential for enhanced digital connectivity to lead to reduced carbon emissions. In terms of broadband and 4G connectivity, the main mechanism identified for this is a reduction in travel as a result of home working and / or increased use of online services. For example, while the exact mechanisms involved are highly complex, a recent study conducted by the Carbon Trust found that home working led to reduced emissions on average in all six countries examined, with the carbon saving associated with avoided commuting and avoided office emissions outweighing any additional domestic energy consumption^[45].

3.9.2 With respect to mobile connectivity, while potentially beyond the scope of this evaluation, where the delivery of 4G provides a stepping-stone to 5G connectivity, there is therefore the potential for further carbon savings through the adoption of smart technology solutions and Internet of Things (IoT) devices. For example, using connected devices that measure soil nutrition, farmers can accurately assess how much irrigation and fertiliser is required resulting in both reduced carbon emissions and reduced water consumption and pollution^[46]. Similarly, 5G has the potential to enable the delivery of ‘smart energy grids’ which automatically monitor energy flows and adjust to changes in energy supply and demand with resultant savings in terms of emissions^[47].

3.9.3 While improved digital connectivity has the potential to reduce emissions at the local level, it should be borne in mind that when the whole life cost of technology use is considered, the overall net impact is less clear. For example, the mining and extraction of raw materials for IT equipment emits significant greenhouse gases and contributes to increased e-waste^[48]. In addition, cloud services and data processing are an increasing source of emissions^[49].

3.10 Conclusions

3.10.1 This chapter has reviewed the relevant literature on digital connectivity and 4G specifically and identified a diverse range of potential benefits which cover multiple policy areas, including economic, health, education, environment, community, and other social goals.

3.10.2 The provision of such services in rural areas acts to mitigate the barriers to access such as long travel distances and can help improve equality of access between rural and urban locations. There is, however, the potential for some negative impacts, particularly where, for example, some groups in society get ‘left behind’ by digital improvement. The literature review has also demonstrated some of the challenges in measuring the potential social benefits of the improvements.

3.10.3 Having developed our understanding of the potential benefits which S4GI may provide, the next stage of work involves developing a set of Logic Maps which clearly articulate these, and which can be used to inform the development of the primary research material.