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Why do we need to act? ECONOMIC • It’s not happening • Growth is driven through SMEs and Startups GROWTH • Environment to facilitate growth through technology is not present • Economy rebalancing needs facilita@ng to drive sustainability INFRASTRUCTURE • UK data centre provision is ﬁlling up • Exis@ng stock not ﬁt for future cloud purpose • Next Gen development not widespread in UK • Nowhere to host G‐cloud • Not just about broadband VALUE CREATION • 24% of world class IP created in UK, commercialisa@on of this is not high and RETENTION • High value jobs not being created by exis@ng investments
So what are the market failures? FAILURE CAUSE CONSEQUENCE Next genera@on data We do not view data centres as we view Largest elements of tech investment going oﬀshore and centre infrastructure broadband, diﬃcult to develop via tradi@onal not driving our own infrastructure development, IP drain being developed property development route as a result, core economic infrastructure sits outside our OUTSIDE of UK legal frameworks, equivalent of choosing to be a 100% energy client of other economies Collabora@on model Historical approach of protec@ng proprietary IP, Transforma@on / modernisa@on not happening fast driving innova@on, spin high cost approach to early stages of innova@on, enough or at all, cost savings not being captured and new outs and start‐ups NOT University resources s@ll inaccessible “to all”, economic growth not happening, talent moving to where PRESENT absence of appropriate governance model the model present Collabora@ve supply Absence of open collabora@ve innova@on UK is uncompe@@ve where it need not be so, unable to chain culture ABSENT approach, historical approach of protec@ng supply to the scale required in global market forcing proprietary IP, absence of appropriate governance procurement elsewhere, innova@on heavily restricted in models mature products / markets Whole of the UK NOT Lack of understanding of the required scale to BRICS countries growth driven market opportunity in seen as a technology have a global market impact and a fragmented technology sectors being lost cluster historical approach to academia, public sector, SMEs, corporates and also regions Access to funding model Drama@cally over focused on debt ﬁnancing which Economic growth prevented, talent being driven away, DOES NOT SCALE in and of itself kills innova@on, no formal links risks too great for all stakeholders between funding levels and regional versus na@onal and infrastructure versus technology BRAIN DRAIN is All of the above Declining chance of economic turnaround quick enough accelera@ng to protect social and economic standing
The response Accept we need to change Priori@es must be readdressed to Policy framework must open up procurement Create Digital Factories of the future, today what we’re doing enable the growth and enable investment Spec building of Next Create the environment UK is about to Gen DC has ceased in Enable the environment to build UK based and for Next Gen data centres experience increased the UK and most is owned next genera@on data centre demand being built by cloud to be built players outside of UK data centre Create innova@on Regenerate the Inward Eﬀec@ve IP ownership clusters with investment and commercialisa@on collabora@on at their economy through heart Enable growth sectors of Low Carbon, Drive economic regenera@on through Create the plaPorm for Capitalise on the public sector transforma@on Healthcare, Crea@ve SMEs and startups with sustainable future growth opportunity and Digital industries and Advanced appropriate manufacturing enablement
Growth through innova@on and collabora@on GROWTH IS DRIVEN THROUGH NETWORKS, RELATIONSHIPS SMEs and STARTUPS AND COLLABORATION 11,000 businesses that generated 20% or higher Collabora@on Programmes average annual employment growth over a three‐ generate signiﬁcant beneﬁts for year period were responsible for crea@ng 54% of UK companies, through improved rela@onships and new jobs networks, access to new or NESTA: Vital Growth 2011 signiﬁcantly improved tools or methodologies and other forms of intellectual property The majority of jobs each year in the UK are created by small ﬁrms. Out of a total of 2.61 million jobs BIS Innova@on and research strategy for growth – Dec 2011 created on average each year between 1998 and 2010 exis@ng small ﬁrms (less than 50 employees) contributed 34% (0.87 million jobs) while start‐ups For UK ﬁrms, being innova@ve is contributed a further third (33%) – another 0.87 strongly associated with high growth, with innova@ve businesses million jobs. growing twice as fast as non‐ innova@ve ones. NESTA: JOB CREATION AND DESTRUCTION IN THE UK 1998‐2010: NESTA: Vital Growth 2011
Innova@on, growth and jobs GROWTH IS DRIVEN US VENTURE BACKED THROUGH SMEs and COMPANY EMPLOYMENT STARTUPS 2000‐2010 The case of the US VC funding drives U.S. job crea@on and economic growth by helping entrepreneurs turn innova@ve ideas and US VENTURE BACKED scien@ﬁc advances into COMPANY REVENUE products and services. 2000‐2010 * Venture Impact: The Economic Importance of Venture Backed Companies to the U.S. Economy
Proposed UK collabora@on infrastructure NATIONAL Glasgow Hub and spoke network of Edinburgh innova@on clusters in all the Core Ci@es. Linked by collabora@on agreements and physical networks Newcastle TECHCITY UK Belfast Manchester Leeds Feeds from the Core City clusters SHEFFIELD and enables the globalisa@on of Liverpool proposi@ons and inward Nomngham investment facilita@on Birmingham Cardiﬀ LONDON Innova-on Hub Bristol New data centre village infrastructure Poten-al data centre loca-on
It’s not just about broadband LIMITING • Eﬀorts are primarily focused on high‐speed data networks for transforma@on • Limited planning and capability in na@onal digital infrastructure, outside of FACTORS the push to ‘high‐speed broadband’ • Opportunity for game changer to open future poten@al – need to complete the digital infrastructure, rather than just have the ‘highways’ in isola@on. FIXED HOW? • Government plays a substan@al role in s@mula@ng growth • No private sector en@ty will create the next genera@on datacentre infrastructure required without Government lead in today’s climate • Combined approach of procurement, incen@ves and policy the key to s@mula@ng the investments + + =! WE MUST CREATE THE END TO END TECHNOLOGY INFRASTRUCTURE Next Genera-on Developed Economic Growth Superfast Broadband Data Centre Tech Ecosystems Engine
Digital drives transforma@on Advanced CDI Healthcare Low Carbon Manufacturing Digital technologies are Allows simula@on and Technological Delivery of tele‐ an integral part of op@misa@on of innova@on and new healthcare and the transi@oning to a Low advanced thinking in areas such as ability to develop new Carbon economy by manufacturing design, content or mechanisms for remote • replacing goods and techniques and computer games diagnos@cs are services with virtual processes, such as manufacture. underpinned by digital equivalents • Rapid Manufacturing, Strong cultural and technologies. • oﬀering virtual • Computer Numerical crea@ve sector helps to technologies that Control and Virtual make regions more Eﬀec@ve broadband allow online Manufacturing. aorac@ve places to live networks are also an shopping, • Concurrent and for highly skilled integral part of teleworking and Collabora@ve Product workers in other developing new access to online Development. sectors. healthcare tech. public services. Digital underpins the major business plan ini@a@ves for economic growth in the SCR and the country. It enables transforma@on and delivery in these and all other sectors.
Digital drives open collabora@on and results OLD CLOSED COMBINES STRENGTHS • Linear and slow EFFICIENT • Proprietary knowledge Brings together assets and • Ideas as strategic Eliminates replica@on and enables best of class advantage ensures best use of resource• Mentors • Learn by reverse‐ engineering • Progress by shoulders CROSS SECTOR of giants Enables cross‐selling and INNOVATION READY • Wisdom of experts cross‐fer@lisa@on between Open collabora@on between NEW industry segments all par@es s@mulates OPEN INNOVATION innova@on THROUGH COLLABORATION • Exponen@al, networked, quick PUNCHES ABOVE WEIGHT • Shared knowledge • Ideas shared and Establishes the proposi@on enhanced of “sum of the parts = • Industry speciﬁc mentors • Lessons learned beneﬁt all greater than” • Progress by peer review • Wisdom of crowds
Cloud Compu@ng is unstoppable OPEN SOURCE TECHNOLOGY IS MATURING • Core technologies which underpin all Internet giants are open source • It boasts the largest and most ﬂexible OPEN STANDARDS R&D resources on the planet • Powered by a ubiquitous network – The Internet! COST OF ENTRY TYPICALLY FREE • Enabled by low cost model and ability UNDERLYING INFRASTRUCTURE to access economies of scale SUPER EFFICIENT • Next gen Data Centres cos@ng 40%+ less to run DRIVES USER PRODUCTIVITY • Through digital devices that empower the end users
What are we doing? NEXT GENERATION DATACENTRES: Large scale and as green as possible, capable of hos@ng ﬁnancial services, G‐Cloud and all our current and future requirements ESTABLISH OPEN COLLABORATION and somewhere for that to happen i.e. INNOVATION clusters (both physical and virtual). Underpin with PIVOTAL PROJECTS to drive usage in datacentres as well as economic beneﬁt. Public Sector TRANSFORMATION is a speciﬁc priority
Next Genera-on Data Centre Datacentre/Innova@on/Transforma@on
Next Genera@on Data Centre – Why? FUNDING INWARD INVESTMENT Enabling the right investment As a result of establishing material condi@ons will create a project that data centre footprint in the SCR, will enable signiﬁcant private funding follow on investment and proximity to be raised. developments will occur. MARKET OPPORTUNITY GROWTH AND REGENERATION The world is moving to cloud. Cloud will Data centres enable commercial enable economic transforma@on and ac@vity and are a draw for follow will be a signiﬁcant revenue opportunity on development (Dulles Technology in the next few years. SCR has the ability Corridor in Ashburn, Virginia for to take a signiﬁcant market share. example).
SCR is the right loca@on for Data Centres CLIMATE Sheﬃeld City Region’s climate is just right. SCR IS With a west to east wind for free year OPTIMAround cooling. L POWER SCR sits on one of highest concentra@on nodes of the UK high voltage network. SITES COMMUNICATIONS Thanks to its industrial heritage, Digital Region provides private dark SCR has LOTS of low cost sites ﬁbre backbone, central UK loca@on.
The value of Next Genera@on Data Centre Development in the UK ESTIMATED REQUIREMENT FOR UK 20 million u2 for public sector, academia and major corporates DEVELOPMENT VALUE including ﬁnancial services £1k/u2 means it’s a £20bn infrastructure development opportunity ENABLING tens of thousands of commercial construc@on jobs & £4bn manufacturing opportunity & catalysing low carbon developments DRIVING HOSTING a £x00bn services a £40bn technology opportunity opportunity
Sheﬃeld City Region ‐ Collabora@on BARNSLEY DONCASTER Digital Media Centre Business Innova@on Centre SHEFFIELD Digital Campus, Worksta@on, STP, ROTHERHAM University facili@es RIDO Fusion Business Centre Proposed TechCity Campus PHASE 1 OF COLLABORATION Links all exis@ng assets (networks and incubators), crea@ng the collabora@on centre BASSETLAW network. The Turbine Innova@on Centre PHASE 2 OF COLLABORATION Wholesale Data centre infrastructure and associated ‘TechCity’ establishing NE DERBYSHIRE Westhorpe CHESTERFIELD the physical hub. Innova@on Centre Tapton Park innova@on Centre
Where to collaborate? TechCity • Physical and virtual hub and WHAT IS IT? spoke network achieved in 2 phases – Phase 1: in exis@ng buildings, Phase 2: in TechCity Campus (right) TECH CITY • Structured management and mentoring methodology (Techstars model) bring sectors and actors together to collaborate (start‐ups, spin‐outs, SME COLLABORATION development, Public Sector transforma@on) ECOSYSTEM • Creates solu@ons and s@mulates new business development • Provides the environment for engagement with public sector, private sector, schools as well as further educa@on and higher educa@on BUILDING ON • Building on the region’s successes in Advanced Manufacturing, TechCity Sheﬃeld will have strong supply chain and voca@onal academic interac@ons across the SUCCESS City Region’s chosen themes of healthcare, low carbon and crea@ve and digital • Emula@ng the success of TechCity UK in Shoreditch.
SCR is the right loca@on for a TechCity DIVERSE ECONOMY PHYSICAL ENVIRONMENT SME dominated, and SCR IS SCR is a great place to live covers all from big city, OPTIMA and work with a low cost of big town, small town L living and the Peak District semi‐rural, Na@onal Park in easy reach. to rural COMMUNICATIONS WORLD CLASS capabili-es and SCR has the largest independent heritage to leverage super fast broadband network 2 major universi@es – University reaching 1.2 million consumers of the Year 2011. World class in & 40,000 businesses advanced manufacturing enabling swiu deployment & materials, CDI, of next genera@on services Healthcare, and Low carbon
Not just a steel Heritage – strong CDI history LONG HISTORY OF CDI • Cultural industries quarter developed mid‐1980s • Strong gaming hub developed in 1980s • Souware & IT services cri@cal mass • Elearning hub established mid 2000s HUGE GROWTH CDI in the Sheﬃeld city region are growing at a faster rate than anywhere else in the UK in terms of specialist companies and new jobs. Circa 50,000 people employed in CDI sector (1/6 of the SCR workforce) COMPLEMENTS other northern core ci@es CURRENT CORE STRENGTHS Manchester Media Crea@ve, business processes Leeds professional services & cloud adop@on Newcastle Bio Liverpool Culture
SCR ‐ Gateway to the North MANY GRADUATES University of Newcastle PRODUCED !"#$%&#()*+,*:+&(.549%&03"1 FE & HE graduates in SCR !"#$%&#()*+,*-5"1%&03"1 Ca. 100,000 per annum !"#$%&#()*+,*<%%#1% University of Leeds Ca. 20,000 Computer Science Leed Metropolitan University University of York graduates within 1hr travel of SCR =5&.34*!"#$%&#() York St John !"#$%&#()*+,*-.%/%01 -.%/%01*230034*!"#$%&#() Lancaster University 2511%&6%01*!"#$%&#() University +,*2500 Lincoln University NOT ENOUGH HIGH Manchester UniversityManchester Metropolitan UniversitySalford University :+;"8.34*!"#$%&#() :+;"8.34*<&%"(*!"#$%&#() VALUE JOBS !>?-<Liverpool University 7+58.9+&+58.*!"#$%&#() SCR has the best graduate 7#$%&@++0*2+@%*!"#$%&#()Liverpool John Moores University reten@on in the UK but has not =%&9)*!"#$%&#() leveraged that into signiﬁcant high value jobs growth therefore has signiﬁcant LONDON internal untapped scale.
Collabora@on = improved success “ TOO EARLY FOR VENTURE CAPITAL OPEN AND TOO EARLY FOR COLLABORATIVE INNOVATION Hosted by public sector, led by private sector To succeed in the VENTURE • Problem iden@ﬁca@on global innova@on • Solu@on proposals CAPITAL • Diﬀerent audiences in one environment economy, the UK • Single set of rules of engagement must strengthen its • IP protected by clear new governance framework ability to accelerate the commercialisa@on of emerging IN PARTNERSHIP COLLABORATIVE FUNDING technologies, and to • Co‐funding to remove risk from VC and improve chances capture the value • Business development • S@ll beneﬁ@ng from environment “chains linked to these. The private sector is always going to be central to innova@on. • IP s-ll protected by clear new governance framework READY FOR VENTURE CAPITAL BETTER PROPOSITIONS • Beoer customer focused solu@ons • Fast to market • More eﬀec@ve industry road mapping BIS ‐ Innova@on and • More investable proposi@ons Research Strategy for • IP protected by funded company or vehicles Growth – Dec 2011
Collabora@on works BUSINESS PUBLIC SECTOR UNIVERSITY & ACCELERATION TRANSFORMATION PRIVATE SECTOR
Transforma@on through innova@on “ INNOVATION CAN BE ENABLED BY GOVERNMENT • Opening up access to data, informa@on and research that is held within the public sector so its economic and social value can be maximised; Cumng red tape to ensure that rules and regula@ons PIVOTAL PROJECTS WILL STIMULATE GROWTH AS TECHNOLOGY AND • do not inhibit new business models; COLLABORATION • Mobilising resources and new partnerships around DRIVE INNOVATION big societal challenges through the use of Inducement Prizes; Public Sector Smart • Ac@ng as a Lead Customer – as a major and early Services Plaxorm infrastructure user of goods and services the public sector is a Digital Region source of demand for new forms of innova@on, especially in areas such as health, transport and urban development and its scale provides an early market to grow new business models, technologies and services. “ Design and manufacturing plaxorm E‐learning Healthcare transforma@on BIS ‐ Innova@on and Research Strategy for Growth – Dec 2011
ICT underpins Public Sector transforma@on Public sector Service Delivery transforma-on of services needs • shiu to cloud SI contract driven and predicated Client Innova-on – including 3rd party par-cipa-on infrastructure • collabora@ve plaxorm PlaPorm as a service partnership – inc key tech companies Value added SaaS: Applica@ons, Desktops, User security & policy etc…) development • more accessible Infrastructure procurement (Commodity IaaS: compute, storage, network, DB, applica@on infrastructure etc… ) environment Data Innova@ve cloud & Center 1 virtualised services Current hosted services Data Data Center 2 Center 3
Public Sector Transforma@on WORKING MODEL OF PUBLIC SECTOR COLLABORATION AND UK GOVERNMENT TRANSFORMATION UK PUBLIC SECTOR ICT STRATEGY SEEKING TO • Swedish public sector • ICT strategy recognising collabora@on for TRANSFORM shiu to cloud and procurement and • UK Local Authori@es requirement for open development of collabora@ng and source as well as transforma@ve services discussing collabora@ve transforma@onal projects development and easier but not mainstream procurement ac@vity • Published March 2011 • Ongoing since 2005 • Socitm 2011 • Delivery plan Dec. 2011
Digital Region Datacentre/Innova@on/Transforma-on
Digital Region – some numbers DIGITAL REGION Network is 1,200Km long with WHAT IS IT? Next genera@on FIBRE NETWORK connec@ng 1589 new street cabinets more than half a million premises and forty installed including space for thousand businesses in the region on an expansion infrastructure capable of delivering a 97% coverage minimum of 40‐100Mbps symmetrical broadband speeds using state of the art when complete technology. 54 Exchanges in the region to house 1.3 million people equipment for both VDSL and ADSL 546,000 homes 15 Designated Business Exchanges for 40,000 businesses Fast and Gigabit Ethernet
How is Digital Region diﬀerent? Unprecedented reach in Technically superior Ahead of the curve ‐ Next A carrier with a social Sheﬃeld City Region product Genera-on Network NOW conscience Owned by • 97% coverage South • Assured service, • End2end delivery of 4 • Ac@vely working to • 4 local authori@es – Yorkshire when Average speed of separate secure solve digital inclusion Sheﬃeld, Barnsley, complete 37Mbps virtual networks challenges Doncaster, Rotherham • Demographics include • VDSL2 technology enabling security, • Commercially neutral • Go to market strategy large city, large and • IL3 accredita@on health and eGov with a social and via partners that want small town, semi‐rural. delivery alongside economic development to deploy next • PSN compliant • Enabling connec@vity consumer services agenda genera@on and between consumers, • Ideal R&D environment disrup@ve services businesses and public for the development of sector infrastructure disrup@ve services • Largest independent NGN in Europe
Able to support transforma@on Supports Public Sector Service Consumers delivery Ci-zens Business transforma@on Value Added Services (VAS) Mul@ple partners resul@ng in JVs in order to leverage commercial value of VAS rollout (incorpora@ng SMEs, OEMs and university partners) Inclusion strategies Public sector service delivery PlaPorm and reach ‐ Product and soiware Infrastructure (Commodity IaaS: compute, storage, network, DB, applica@on infrastructure etc… ) Data Current hosted Centre 1 Innova@ve cloud & services virtualised services Data Data Centre 2 Centre 3
Opportunity is to “build on‐top” Phase 1 Fibre Ubiquity can be Tier 1 applica@on almost provided by partners must be completed overlaying engaged to providing 82% wireless leverage the Foc coverage capability on to network Digital Region
Timetable – high level launch collabora@on centre, launch call for par@cipa@on internal and commence external to SCR, DC development launch start‐up compe@@ons commence UK Government in each of the TechCity hub engaged – 5 plaxorm development project CDI project areas, operate established as proposal Hub in interim commence LEP priority ﬁrst DCs developed facility fundraising open Project process created 2009 2011 2012 2013 Q1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 process conﬁrm conﬁrm Launch new development of established level of development V1 of each TechCity project proposal to determine UK Gov. plan for each of of the 5 plaxorms hub facili@es completed and government support for the 5 plaxorms ‐ itera@ve open gained key partner support support project development sign contracts thereauer establish with ﬁrst round ini@al set of of key DC LOIs with tenants key DC infrastructu re tenants
The project ecosystem LEP Board Tech City Sheﬃeld Programme Board (Chaired by John Mothersole – SCC CEO) CEO (needs Management structure hiring) Project University Commercial Public sector Management team team team Professional Services (legal, accoun@ng, funding) Infrastructure Collabora-on model and communica-ons strategy PlaPorm projects Datacentre Campus TechCity Segments Public Sector Smart Crea@ve and Healthcare Advanced Services Plaxorm infrastructure Low Carbon Digital Region Digital technologies Manufacturing Digital Region E‐learning Collabora@on Centre Participants Design and manufacturing Healthcare Research and Public sector Private sector Tenant space plaxorm transforma@on skills Policy, economic LEP sector groups, Universi@es, development, entrepreneurs, Colleges, service mentors, Schools, prac@@oners, investors, service Private Local Authori@es, providers, providers, Fire, Police, corporates, Students Health and supply chains Central Gov.
Funding collabora@on Innova@on and PROGRAMME Economic Development PROJECT FUNDING FUNDING Collabora@on func@ons Tech Accelerator BPRA TIF Enhance Capital Allowance PropCo(s) Financed Leverage Business rates private sector Buildings and associated infrastructure Public sector funding Rental guarantee Jessica
What’s needed to make this work? Enabling the right investment condi@ons CONDITIONS through policy and considered incen@ves will catalyse the project and enable signiﬁcant private funding to be raised. Commitment to establishing the Tech City model to all core ci@es / city regions. PROCUREMENT Ensuring that the condi@ons are set for public sector technology transforma@on to cloud, the follow on is to establish the parameters of open procurement. COLLABORATIVE Public Sector ac@ng as a Lead Customer – APPROACH as a major and early user of goods and services the public sector is a source of demand but will let the Private Sector lead on solu@ons.
References 1. BIS ‐ 11‐1387‐innova@on‐and‐research‐strategy‐for‐growth – Dec 2011 hop://www.bis.gov.uk/innova@ngforgrowth 2. NESTA – Growth Dynamics hop://www.nesta.org.uk/publica@ons/assets/features/growth_dynamics 3. NESTA – Vital Growth 2011 4. NESTA – Job Crea@on and Destruc@on 1998‐2010 5. NESTA – The Startup Factories, June 2011 hop://www.nesta.org.uk/publica@ons/assets/features/the_startup_factories_report_feature 6. Governement ICT strategy – March 2011 hop://www.cabinetoﬃce.gov.uk/content/government‐ict‐strategy 7. Government ICT strategy, strategic implementa@on plan – Nov 2011 hop://www.cabinetoﬃce.gov.uk/content/government‐ict‐strategy‐strategic‐implementa@on‐plan 8. Sambruk, hop://www.sambruk.se/ 9. Socitm, hop://www.socitm.gov.uk/ 10. Techstars, hop://www.techstars.com/ 11. Plugnplay, hop://www.plugandplaytechcenter.com/ 12. Ycombinator, hop://ycombinator.com/ 13. South Yorkshire Local transport plan hop://www.syltp.org.uk/ 14. Venture Impact: The Economic Importance of Venture Backed Companies to the U.S. Economy hop://www.nvca.org/index.php?op@on=com_content&view=ar@cle&id=255&Itemid=103 With thanks to for imagery