Commercial Secretary's speech on digital transformation in infrastructure and engineering
'Infrastructure is crucial to our economic success', says Baroness Neville-Rolfe.
I would like to thank the ICE for inviting me today to speak on a subject close to my heart.
We are experiencing a period of extraordinary technological change…
It is impacting every sphere of our lives…
Already some of us can turn on our heating using our phones whilst travelling home on the bus.
Our printers can – I am told – order new ink cartridges for us so we never run out.
And so on.
A short time ago one could talk about the digital economy as something separate from the rest of the economy.
Those boundaries no longer seem to apply as digital technology progressively permeates almost every sector. We used to talk about manufactured products, services and the digital sector. No longer, as these have come together in a digital revolution, a huge growth driver and disrupter like the railway and electricity revolutions of previous centuries.
This brings challenges, but also massive opportunities as I know from my last 2.5 years work on the Digital Single Market in the Competitiveness Council.
And, as the report shows, we can see the scale of change beginning in infrastructure.
There are numerous examples of new technologies improving the way we design, build and operate infrastructure.
Robots are already used to work in dangerous environments, such as cleaning up nuclear waste at Sellafield or investigating damage to flood defences.
Drones are used for inspections on projects like Crossrail. They can be used to do a 3D scan of a construction site which can be compared with a digital mock up put together previously. This is good for efficiency – not so good for gumboot manufacturers!
Crossrail uses fibre optic cables built into the tunnel walls to provide stress testing information.
Sensors in hard hats can monitor brain activity and alert when fatigue sets in. Such sensors are already used on long distance lorry drivers to reduce road accidents.
Steel construction joints can now be made on 3D printers.
By the end of 2020, we expect every home in Britain to have a smart meter – putting consumers in control of their energy usage.
This could help consumers save a large amount of money in aggregate and be more comfortable – not coming home to a cold house – but it will also introduce the capacity to price differently at different times which could help reduce our energy peak load and therefore the total amount of energy infrastructure we need.
But as the ICE report makes clear, there is much more to come.
Whether we embrace this new world successfully may well dictate how well our economy performs over the next few decades.
I therefore welcome the central messages coming from this report which is the result of work with 350 organisations and professionals.
- that we need to use the opportunities thrown up by the digital revolution radically to improve the performance of our infrastructure. We must think about a physical asset, but also its digital twin – the data and information it can reveal going forward
- that government and industry need to work together, to increase productivity and to address the skills challenges and security risks that digital brings and
- that although the infrastructure sector has been slower to digitalise across the board than many other sectors there are strengths on which we can build such as pre-eminence in Building Information Modelling and our experience of trail blazing projects like Crossrail
The government is behind ICE’s agenda.
The £23 billion National Productivity and Investment Fund announced in the Autumn Statement and developed in the Budget includes money for digital signalling on the railways, research into autonomous vehicles, and a huge boost for R&D funding and for 5G.
We have also asked the National Infrastructure Commission to explore which new technologies could make the biggest difference to our infrastructure. They will be publishing their report by the end of the year.
Our 5G strategy, published this month, sets out in detail how this technology has the potential to transform how we interact with the world.
5G will be ultrafast, ultra-reliable and able to support ever larger data requirements. It will open the door to potentially revolutionary technologies such as driverless cars, smart farming and advanced manufacturing, as well as enabling the many thousands of connected devices that are predicted to enter our everyday world as part of the Internet of Things.
This development should it is believed in principle be able to support hitherto unforeseen new applications to increase our productivity and enhance our lifestyles.
We are backing the 5G strategy with over £1 billion investment in the next wave of mobile and broadband to put us at the forefront of development with a new National 5G Innovation Network trial and an extra £200 million for full-fibre broadband announced in the Budget.
But we are also studying 5G trials elsewhere for example at the winter Olympics in Korea, the Commonwealth Games in Australia and trials in Estonia and Stockholm all scheduled for 2018.
Change can happen at different times in different ways.
It can be large and dramatic.
Or it can be incremental, small marginal gains that make a huge difference.
In infrastructure, we are going to see advances through a number of large schemes –
…Crossrail – a new state of the art line for London, the first phase of which is due to go live later this year …HS2 – a landmark expansion of the rail network …nuclear investment at Hinkley …and, of course, increases in airport capacity
But as the report rightly points out major infrastructure projects represent only a small percentage of the spend on UK infrastructure. Innovation through operation and maintenance of assets is also important and can also benefit from the digital revolution.
Incremental change can release great value – I remember when I worked at Tesco being told that reducing average serving time at the checkout by one second was worth £2 million across the UK business. This principle of efficiency can be echoed in other sectors.
A perfect example of improving the performance of existing assets is digital signalling on the railways.
Digital signalling can allow trains to run more frequently thereby improving capacity on crowded networks.
Another example is sensors in the electricity grid which can monitor and alert us to overheating – allowing for safer, more secure electricity transmission at higher capacity.
And the water industry has made good use of digital to tackle leaks and grouped smaller programmes together to spread innovation faster.
I would like to touch briefly on two other themes in this report.
First, skills.
We recognise that we need to adapt to the new world around us. We announced in the Budget some major initiatives on skills to improve productivity by mixing investment in skills with that of capital, including £300 million to develop the UK’s research talent (including the creation of an additional 1,000 PhD places). And we are leveraging experience of technology companies, local businesses, local government, and charities to facilitate coordination between the valuable initiatives and activities made available by those outside government, as announced in the Digital Strategy.
Second, security.
I would like to end on a more sober note. We need to be alive to the risks and threats that greater reliance on digital networks will entail even though we will have more and better data than ever before.
We are therefore investing £1.9 billion to transform our capabilities in cyber defence, cyber deterrence and cyber offence.
We recently launched our National Cyber Strategy and last month the Chancellor opened the new National Cyber Security Centre.
This is of course in addition to the work that government and local government lead on civil emergencies like flooding which can be devastating as the report makes clear in highlighting the failure during the Lancaster floods in 2015 of everything from electricity to payment systems and the closure of schools and hospitals.
In conclusion, the changes we are debating today are really quite exhilarating and, at the same time, present some challenges for us all.
However, it is a help that the UK has an excellent science base.
Infrastructure is crucial to our economic success. Upgrading the country’s infrastructure is at the heart of our economic and industrial strategy.
The government will do its part, by providing more investment, better targeted and better delivered. And this will build on action government has already taken in response to asks from the infrastructure industry.
Government has been removing the barriers for industry. But industry also needs to do its part, not just by embracing the spirit of this ICE report, but also by grasping the opportunities digital technology creates. Industry must respond with more innovative delivery, invest smarter in skills and work harder to break down the fragmentation and low productivity that has held the industry back.
The UK were at the forefront of the first three industrial revolutions; we need to be at the frontier of this fourth one as well. For us to succeed, both government and industry need to play their full part.