Research by: Unlocking the digital potential of rural areas Unlocking theacross digital the potential UK of rural areas across the UK Brian Wilson, Jane Atterton, Jane Hart, Mike Spencer and Steven Thomson Published: March 2018 Commissioned by: About Rural England CIC Rural England’s mission is to build the strength and resilience of rural England by helping to inform and engender better rural policy making. It does this by encouraging informed debate, providing independent research and evidence, supporting information exchange and building a network that draws together all those who seek to improve the social, economic and environmental well-being of rural England. For more information visit: https://ruralengland.org/ The project research team from Rural England CIC were: Brian Wilson (research consultant and the project manager); and Dr Jane Hart (research consultant). About Scotland’s Rural College (SRUC) SRUC supports innovation and sustainable development in agriculture and the rural sector in Britain and internationally. It is one of the UK’s leading agriculturally-focused higher education institutions, offering a unique blend of research, education and consultancy. SRUC’s research and education activities operate from six campuses and eight farms and research centres across Scotland. For more information visit: https://www.sruc.ac.uk/ The project research team from SRUC were: Dr Jane Atterton (policy researcher); Steven Thomson (senior agricultural economist); and Mike Spencer (data manager and researcher). About Amazon Amazon.com opened on the World Wide Web in July 1995. The company is guided by four principles: customer obsession rather than competitor focus; passion for invention; commitment to operational excellence; and long-term thinking. Customer reviews. 1-click shopping, personalised recommendations, Prime, Fulfilment by Amazon, AWS, Kindle Direct Publishing, Kindle Fire tablets, Fire TV, Amazon Echo and Alexa are some of the products and services pioneered by Amazon. For more information visit: www.amazon.co.uk/about List of contents Foreword 1 Summary 3 1 Introduction 10 2 The economy of rural areas 17 3 Digital take up and use 25 4 Benefits from going digital 35 5 Constraints to going digital 42 6 Unlocking digital potential 49 7 Conclusions and recommendations 64 Appendices: A Creating a UK rural definition 72 B Survey of rural businesses 76 C Estimating GVA impact 82 Bibliography 83 Acknowledgements 90 Rural business case studies: Sitekit (Isle of Skye, Scotland) 24 Clear Mapping (Cornwall) 34 Write Services (Norfolk) 41 Denhay Dairy Farm (Dorset) 48 Juma Communications (Derbyshire) 63 Foreword The internet is changing the way we communicate and interact with one another, the way we discover and fulfil the experiences, the interests and hobbies we enjoy, and the way we find and buy the products and services that we want and need. It is helping to create a better connected world – opening up new opportunities, empowering more people to start and run businesses like never before, and providing access to the information, tools and networks to fulfil both personal and career ambitions. Yet this is just the beginning of the dialogue. That is why at Amazon, we often say it is still day one. There is so much more to come and this could not be truer than for rural communities up and down the country. Rural businesses already contribute a hugely significant £299bn in Gross Value Added (GVA) to the UK economy according to Rural England and Scotland’s Rural College, and there are over 750,000 rural businesses across the UK. At Amazon, every day we see opportunities for rural entrepreneurs transformed through e- commerce, better delivery services and growing access to fast broadband. There are now more than 10,000 rural businesses selling on Amazon Marketplace, including small businesses and individuals, to grow their business online. A great example is Karen Riddick from Dumfries in Scotland. She left her day job after 16 years of employment, when her Fairtrade home furnishings company Second Nature started to take off. Evolving from being a Fair Trade B&B owner, buying furnishings from wholesalers to then selling its own Fair Trade home furnishings, Second Nature now exports homeware products around Europe and generates roughly £350,000 in annual turnover. It’s not just selling online where the opportunity for rural businesses is great. It’s also the ability to harness the power of cloud computing to innovate and boost productivity in rural areas. Take IceRobotics, which uses Amazon Web Services, our suite of cloud computing services. IceRobotics provides data collection and analysis products for monitoring dairy cow behaviour. They moved their systems into the cloud and grew their business by collecting, storing, and analysing cow behaviour data in the cloud with AWS and now can access over 50 million ‘cow–days’ worth of data and use AWS to tap into a tremendous amount of analytic power. By using cloud computing, IceRobotics provides customer dashboards so farmers can see alerts and visualisations of how their cows are moving to manage their herds. But it’s not just rural businesses that are succeeding through the digital economy. Rural consumers are also benefitting from access to the same innovative content and services as people in urban areas. With Amazon Prime, customers benefit from next day delivery, which even just five years ago would have been out of the ordinary but is now increasingly the norm. Customers also get access to Prime Video and Prime Music with original content, and are able to use cloud-based voice assistants like Alexa to connect their homes to the cloud. 1 So it’s clear to us what the benefits of the digital revolution can be for rural parts of the country – but it’s still day one. We know where rural Britain can be, but the question is how do we get there? That is why we commissioned Rural England and Scotland’s Rural College to undertake in-depth research looking at how to unlock the digital potential of rural areas. As the report shows, there is an additional £12bn to £26bn of GVA waiting to be unlocked that can fast track the rural economy and ensure our country remains globally competitive. We believe that realising this digital potential is the next chapter for rural areas, which will help to level the playing field between urban and rural areas. Digital services enable people living, working and running their businesses in rural areas to have the best of both worlds: the rural lifestyle with lower costs, less stressful commutes and beautiful scenery; combined with access to the same benefits as urban areas to cutting edge technology, business supplies and low-cost everyday essentials delivered to their door. That’s why we launched the Amazon Academy programme with events dedicated to rural businesses to provide practical advice on how to use e-commerce to boost their revenue, productivity and exports. It’s also why we support the Rural Business Awards, which is a great way to shine a spotlight on rural business success and ensure the sharing of best practices to enable more growth in rural areas. So on behalf of Amazon, Rural England and Scotland’s Rural College (SRUC) I would like to thank each and everyone one of the rural businesses up and down the country for helping to build the rural economy’s digital future – it’s great to see some of those rural businesses showcased in the report, who are innovating and pioneering to come up with new ways to make customer lives even better. The ambition and entrepreneurial spirit is there right across our countryside, and we so hope to play our part in helping meet that ambition. Doug Gurr UK Country Manager Amazon 2 Summary Unlocking the digital potential of the UK’s rural areas is important for rural businesses, for the future of rural communities and for the productivity of the UK economy as a whole. The digital economy has clear potential to address certain inherent issues with rural geographies. Businesses can, for example, gain online access to wider markets and services, thus helping to improve their competitive position. However, to date, relatively little has been written about digital adoption by rural-based businesses in the UK. So far most of the rural digital debate has centred on the issue of access to infrastructure: specifically, connectivity to broadband and mobile networks. What that debate has diverted attention from is questions about the take-up and use of digital technology, applications and services by businesses located in (the majority of) rural areas, where there is now reasonable infrastructure. Research approach The objectives of this research were: to better understand the rural digital economy as it currently stands (including business connectivity, use of digital devices and adoption of digital applications); to consider the benefits that accrue; to identify any key constraints to digital take-up; to assess the monetary digital potential within the rural economy; and to recommend actions that would help unlock that potential. The research methodology had five main stages: 1. A literature review of existing information; 2. A rural analysis of relevant existing economic data sets; 3. A substantive survey of rural-based businesses (807 responses); 4. Interviews with rural business and technology experts; and 5. Estimating the economic impacts of the digital potential. The four constituent parts of the UK each have their own (differing) rural definitions. In order to analyse data on a consistent basis, this project created for the first time a UK-wide definition of predominantly rural local authority areas, where at least half of the residents live in settlements containing fewer than 10,000 people. There are 117 local authority areas (out of 391) in the UK which fit this definition.