House of Lords Communications and Digital Select Committee inquiry ‘Digital exclusion and the cost of living’
This report focuses on the inquiries relating to the questions:
1) What are the main causes of digital exclusion in the UK? What is the economic and social impact?
2) How has the rising cost of living affected digital exclusion?
3) How well are existing industry initiatives addressing digital exclusion? How could they be enhanced?
4) What lessons can the UK learn from abroad?
1. This report is submitted from the perspective of a young person with a deep interest in the impact of social media and technology in modern society. As a young mother and student who has been particularly hit hard during the current cost of living crisis, this was a topic I was interested in studying further, especially in drawing the link between digital exclusion and the cost of living crisis.
2. This report is comprised of both a public survey answered by 37 respondents and a large amount of research around Digital Exclusion. The survey was open between 27 February 2023 and 5 March 2023, and produced responses on the following issues of digital exclusion; the main causes, the contribution of the cost of living crisis, the way it can be more inclusive, the positive or negative impact industries are having and the existing policies from other countries. It was responded to by a diverse group of mixed genders, ages, ethnicities, jobs and geographic areas. As the report follows, both research and survey results have been combined to give a well-rounded report on how the UK can be more digitally inclusive, through highlighting key areas that are prohibiting it from exceeding.
The main causes of Digital Exclusion and the Economic and Social impact:
3. Digital exclusion refers to those with unequal access to technology, devices, smartphones and the internet. With 3.7 billion people being digitally excluded worldwide (ITU, 2020) and 10 million people in the UK lacking very basic foundation skills needed for our digital world (Lloyds Bank EDS, 2021), this means that 6.9 million people in the UK will remain digitally excluded if nothing is done to help them (Good Things Foundation, 2021).
4. Research has found that there are many factors that contribute to digital exclusion and the growing digital divide. The Local Government Association (2021) found that digital exclusion is inextricably linked to wider inequalities in society, and is more likely to face those on low incomes, people over 65 and those with disabilities. This is because people can’t afford rising costs to buy and maintain technology (which has been furthered by the cost of living crisis), unable to understand the complex skills of growing technology or unable to use due to the complexity and accessibility of the technology. Ofcom (2022) presents that there are three key contributing factors to digital exclusivity that are often intertwined; access, ability and affordability.
5. My survey found that 56.8% of respondents stated they believed that lack of money was the key driving factor for digital exclusion. My survey further found that 21.6% of respondents believed the main reason for digital exclusion was down to accessibility. In order to address the digital divide, it is significant to understand the economic and social impacts to unlock growth in these areas.
Economic impact:
6. Particularly since the Coronavirus pandemic, the economic scene changed vastly in relation to digital exclusion. As personal interactions reduced significantly, the use of technology, working from home, and online conversations increased greatly. Even following the lifted restrictions, this way of life has remained part of the norm of society in present day. This period particularly furthered the digital divide, by separating those who did not have digital access, especially the knowledge/skills for it, further away from inclusivity.
7. In economics, it is widely accepted that technology is the key driver of economic growth of countries, regions and cities. Technological progress allows for efficient production of better goods and services. (Harvard, 2023) There are different economic impacts of access to technology.
8. Esther Mallowah, Head of Tech Policy, ICAEW, states that there are economic impacts of digital exclusion, particularly to read advances in technologies. Mallowah (2022) stated that technology has made vast economic advancements particularly in the case of artificial intelligence and robotics. This economical impact is huge, as it replaces the working sector, particularly in jobs such as retail and hospitality. If we were to achieve complete digital inclusivity, there are arguments that it could potentially be led too far, and there would be no aspects of a world without technology.
9. Zia Qureshi, Senior Fellow in Global Economy and Development, Brookings Institution, argued the 3 ways to drive economic growth are through productivity, capital and labour. As technological innovations are the key drive to productivity growth, being digitally inclusive is essential for economic growth. (Qureshi, 2020)
10. A study conducted by McKinsey Global Institute found that the internet is changing the way we work, socialise and share information, with the internet accounting for 21% of the Gross Domestic Product (GDP) growth in mature countries over the past 5 years. (Darina, 2022). The report also finds that the internet is key catalyst for job creation, with all applications took online instead of in person. (Darina, 2022) It stated that a detailed analysis of the French economy showed that whilst the internet has reportedly destroyed 500,000 jobs over the past 15 years, it has created 1.2 million new ones. This suggests that in order to drive economic growth, there needs to be more digital inclusion by addressing the digital divide to allow people to advance with these growing opportunities.
11. This highlights that in order to achieve economic growth, the digital divide needs to be addressed to provide opportunities that are accessible to everyone in society. However, it needs to be concluded why there are restraints on certain groups within society and how we can achieve prosperity for those that are digitally excluded. Without this, economic growth cannot happen.
Social impact:
12. Furthermore, the social impact of digital exclusion is of significance too. As aforementioned, there is a pre-drawn line between groups that are already socially disadvantaged and those who are digitally excluded. This report highlights what social impacts on society being digitally excluded has.
13. ICAEW (2022) discusses the social impact of technology, and how, particularly since the Coronavirus pandemic of 2019, it has contributed to digital exclusion. Mallowah (2022) states how the use of social media and apps can increase communication and interaction through the use of technology. At little or no cost, the use of apps such as “WhatsApp” allow communication which allows increased interactions. She states that this is also furthering business and job opportunities, as many small businesses in Kenya are operating via WhatsApp to communicate with customers.
14. However, this argument can be flawed as is this not an example of furthering the digital divide gap? By allowing only those with social media and technology to communicate and advance businesses, is this not creating an excluded group of those who do not have internet to access this opportunity, or the technology or knowledge of technology to have this opportunity? The Good Things Foundation (2021) argue that digital exclusion is a social issue, and a lack of digital access and skills can have a huge negative impact on an individual’s life. It can lead to poorer health outcomes, increased loneliness and social isolation and less access to jobs and education. Particularly as everything has moved online following the Coronavirus pandemic, basic interactions that used to exist, for example shopping, have been reduced due to online initiatives. People who are digitally excluded also lack a voice and visibility in the modern world, as government services and democracy increasingly move online. (The Good Things Foundation, 2021)
15. With interactions and communication moved online, it furthers the gap between those who have online access and those who do not. This can increase loneliness and have a huge impact on the mental health of an individual. A 2016 analysis of Scottish data carried out by IpsosMORI for Carnegie UK Trust illustrates how the wider societal benefits of internet use is associated with better health and wellbeing. (NHS Digital, 2023)
16. Therefore, digital inclusivity will advance societal opportunities, contributing to better physical health, mental heath and general wellbeing of an individual. It will also provide everyone with equal opportunities and access to socially grow.
The impact of the rising Cost of Living crisis:
17. The UK’s current Cost of Living crisis has arisen since the end of 2021 as a result of the economic impacts of the Coronavirus pandemic, Russia’s invasion of Ukraine and Brexit. This has meant that individuals have been hit with significantly increased bills, interest rates, food prices and energy inflation, whilst accumulating higher debts on low wages.
18. This has not only impacted those who are already digitally excluded, but is also driving those who were previously inclusive to be excluded. This is as a result of higher bills and debts, forcing many people to choose between basic household essentials and technology, either in physical form or staggering bill prices. As a result, Charity Digital (2023) found that nearly 6 million households are struggling to afford essential telecoms services such as mobile, broadband, and landline services. With a new societal norm of online work, shopping and communication, this makes a lot of people digitally excluded from their access to the internet, and therefore disrupting their way of living.
19. In a newspaper article from the Metro (2023), it explored the increase of inflation expected from mobile phone providers. It states that EE customers will see a 14.4% rise in their phone contract bill in March 2023. This emphasising that people cannot afford their digital bills as it is, with the rising costs it is going to increase the digitally excluded group. O2 customers will see a rise of 17.3% from April 2023, as well as Vodaphone with 14.4%, Three with 14.4%, BT with 14.4% and ID with 10.1%. As all networks have an unavoidable bill increase, on top of other digital increases such as internet and tv subscriptions, it is making it more likely for people to become digitally excluded as they will prioritise basic bills like energy and food over luxuries of technology.
20. My survey found 78.4% of respondents agreeing that the cost of living crisis has contributed to digital exclusion. These responses consisted of arguments such as people are having to prioritise bills and basic essentials over the newest technology or rising bills related to technology and the cost of technology has risen itself and is no longer affordable to those who could afford it.
21. However, calculations undertaken by Development Economics using a survey from YouGov found the cost to families of being disconnected is £286 per month, and over one fifth of UK adults are turning to the internet to save money, as prices of products are cheaper online. (Essam, 2022) This suggesting that the digital divide is wider than ever, and relies on households being digitally inclusive in order to save money.
22. It’s fair to conclude that the cost of living crisis has contributed to a growing digital divide, as more people are becoming excluded than inclusive due to rising bills and remaining wages. As 36% of households have had to cut back on digital access due to the cost of living pressures, its clear that digital exclusion is coming more of an issue due to the cost of living crisis. (Lowe, 2023)
The effect of industry initiatives:
23. The cost of living crisis has seen the digital divide grow significantly, with many more people becoming digitally excluded as a result of rising bills and expenditure. Some industries and companies have provided initiatives to allow people to remain digitally inclusive by offering internet, broadband and deals at low costs to support them through the cost of living crisis.
24. GiffGaff are one phone network who capped their prices in September 2022 to remain at a fixed rate until December 2023 throughout the cost of living crisis. This was one initiative of a company to support those who are digitally inclusive to remain inclusive, or support those who were previously excluded to become inclusive. It is an attempt to close the digital divide, particularly in times where it is growing. (Metro, 2023)
25. The Trussell Trust and Citizen’s Advice have piloted a “Help through Hardship” phone line, whereby those struggling will be provided with a free SIM as part of a pledge to connect a further 4 million people by the end of 2025. This is to support those struggling with the cost of living crisis to attempt to stop them from being digitally excluded. (Essam, 2022)
26. Virgin media are providing an ‘essential broadband package’ for those on Universal Credit, where they provide a fixed term deal for £12.50 a month, down from £38. This is an industry initiative to ensure those who are on benefits are still being digitally included. (Virgin Media, 2023) BT are also providing a broadband package for those on Universal Credit for £15 a month instead of £39.99. (BT, 2023)
27. The survey found that 70.3% of respondents believed that industries and companies were not doing enough to be more digitally inclusive. The responses were compromised of arguments that they are only helping specific people who are supported by benefits, and do not do enough to help everyone, and tariffs should be low for everyone without a compromise of quality. It’s fair to say that everyone in the UK is suffering similarly within the cost of living crisis, and therefore there should be help for all households throughout the hardship. The survey also found 10.8% of respondents agreeing that the industries were doing enough in this crisis, as if it is becoming a political issue of helping those who are struggling, it becomes a statement of subjectivity, as one person’s struggle may not be another’s, and therefore in comparison to previous times, everyone will state they are struggling. By providing at least some households with an option to reduce digital exclusion, it is enough to contribute to helping the digital divide close.
Policies from Canada on digital inclusivity:
28. In order to achieve digital inclusivity and receive the benefits that come with it, it is significant to see what initiatives and successes have been taken from other countries to achieve this too. Particularly in large countries where the digital divide is a lot bigger than one of the UK’s size, it may be worth adopting valuable initiatives that are proving to work or have worked.
29. For example, in Canada there has been lots of initiatives to close the digital divide. The Canadian government promised through Canada’s Connectivity Strategy in 2016 to connect 98% of Canadians to high speed internet by 2026 and 100% by 2030 to allow all citizens to be part of a modern society. These plans to support 100% of the population mean in digital inclusivity mean that the remaining 32% of elderly residents can be supported in having increased social support and reduced possibility of having loneliness and mental health related issues. (Samuel Centre for Social Connectedness, 2022)
30. In terms of broadband in Canada, the penetration of fibre-based broadband is moderate in countries covering vast land masses. According to OECD, Canadas land mass was 21.8%, which makes it challenging for fibre to reach all Canadians in this decade. (Ericsson, 2022) 68% of the Canadian population had access to broadband within the baseline of 50/10 Mbps in 2021, which means it is possible to reach 100% by 2030.
31. There has also been other initiatives, whereby the Canadian telecom sector invested $12.3 billion to expand infrastructure to meet more robust demand. Further to this, the Canadian government has allocated $2.75 billion to closing the digital divide. (Ericsson, 2022) This highlighting that there are many initiatives that are looking promising for closing the digital divide in this decade. These are initiatives that are supporting digital inclusivity, especially after a global pandemic.
32. However, despite all the initiatives to become digitally inclusive, Canada has one of the highest internet costs globally. In 2021, the lowest advertised cost of broadband internet for the CRTC-recommended speeds in Canada was $77.98 per month. (Samuel Centre for Social Connectedness, 2022) In an effort to increase the affordability and accessibility, the Government introduced a Connecting Families initiative in 2017 which meant internet service providers could provide affordable internet plans to low-income families. These were offered at $10 per month for less quality speed. In 2021, this programme was advanced to include eligibility to low-income older adults, and provided better quality speed for $20 per month. This was a step forward for bridging the digital divide. This further provides a lesson to the UK, as despite any issues that are seen as unavoidable, there is always attempts that can be made to close the digital divide.
Summary: How we can be more digitally inclusive:
33. This report has highlighted many key ways in which digital exclusion is a growing issue, particularly in recent months following the cost of living crisis. It has stated 2 reasons as to why digital exclusion is an issue, what has exacerbated the issue, and what can potentially be done to close the digital divide.
34. A key solution that can deal with the issue of accessibility to digital technology, particularly for the elderly, is potential education/training on how to use basic or complex devices. These could include organised classes, drop ins at elderly homes or easily accessible online courses for those who are less able to get out. In order for the elderly to be digitally inclusive, it is essential this happens as the reason they are excluded is due to lack of skills and knowledge on technology. Qureshi argues that investment in education and training must be boosted and reoriented to emphasise the skills for the jobs of the future. (Qureshi, 2020)
35. A key solution that can deal with the issue of affordability of digital technology is to allow cheap deals and tariffs to everyone, and keeping the buying cost of technology down too. Allowing bills to be cheap and price of the technology itself to be cheap will give more people access to digital inclusivity. This has been done with Canada, which is far more expensive than the UK and has offered a great initiative to tackle the affordability issues.
36. By providing both cheap access to all digital opportunities and providing training/education on how to use it, this will close the digital divide as there will be a move to digital inclusivity. Remaining with soaring bills and costs for technology as well as rising costs to maintain the technology, people will not be interested in using it.
37. By using other countries as a guidance, we can find initiatives that look promising and can be proven to work. Particularly in Canada, they have a number of initiatives that are attempting to close the digital divide – and are on track too. Using this base knowledge and guidance, we can achieve digital inclusivity and ensure nobody is left behind.
38. Within the survey, the question was asked what can be done to be more digitally inclusive within the UK. These responses included a mix of; lower tariffs/prices to allow more people access and classes/tutorials to educate the elderly and those who struggle with technology.
39. It is clear that digital inclusivity is a goal that can be achieved, however it will need initiatives that address the issues that are restricting it. With digital inclusivity, it opens the door to economic growth, social advancements and an inclusive generation whereby nobody is left behind. If these initiatives are took, particularly with the cost of living crisis that has had a huge contribution to the digital divide, digital inclusivity will be a plausible and achievable goal for societal success.
References:
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Charity Digital (2023) Cost-of-living crisis: how to tackle digital exclusion [Online] Available at:https://charitydigital.org.uk/topics/topics/cost-of-living-crisis-how-to-tackle-digital-exclusion-10515 [Accessed 3 March 2023]
Darina, L. (2022) How Fast Is Technology Growing Statistics [Updated 2022] [Online] Available at: https://leftronic.com/blog/how-fast-is-technology-growing-statistics/ [Accessed 3 March 2023]
Ericsson (2022) Technology’s important role in bridging Canada’s digital divide [Online] Available at: https://www.ericsson.com/en/blog/6/2022/ericsson-bridging-canadas-digital-divide
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