"Digitally-Mature" SMEs Have More Confidence

Almost 1.5 Million Small And Medium Firms Have A "High Degree Of Digital Maturity"

07.04.2014

Fergal Dowling, Partner | +44 (0)121 214 5476

Small and medium enterprises (SMEs) that embrace modern technology tend to have a more positive outlook for the UK's economy.

This is one of the main findings from the new Lloyds Bank UK Business Digital Index, which suggested almost 1.5 million firms have a "high degree of digital maturity".

In the foreword to the report, Miguel-Angel Rodriguez-Sola - group director of digital, marketing and customer development at the company, wrote: "We saw a strong positive correlation between businesses and charities that had more confidence in the UK economy and their own business, and their digital maturity - these organisations also saw digital as a way to grow their organisation."

The study also found that a surprisingly high number of SMEs and charities do not have any online presence whatsoever. Indeed, only 50 per cent of firms have a website and the majority of these only offer basic functionality.

A further 29 per cent of small companies and non-profit organisations said that being online "wasn't relevant" to their business, while a similar number do not have access to basic digital skills. Around 75 per cent of the poll confirmed they have no plans to invest in the development of online expertise.

The Lloyds report concluded: "Thousands of UK businesses and charities could be jeopardising their future growth prospects because they don't see the benefits of digital technology."

SMEs that do have plans to increase their online presence perhaps require more support, as figures showed that 25 per cent said they did not know what types of digital training and advice they needed most. A further 28 per cent confirmed that website design was the area in which they needed the most help, while 24 per cent cited website maintenance as their biggest priority.

On a regional basis, it seems the north-west of England has the most businesses and charities that lack basic online skills. Around 38 per cent of organisations in this part of the country do not have any digital expertise, closely followed by the East Midlands (35 per cent), Yorkshire and Humberside (34 per cent) and Wales (33 per cent).

Expert Opinion
This report follows a study last year by the FSB which found that only a quarter of small firms are actually investing in technology such as cloud computing.

“I’m not surprised that there is a correlation between economic confidence and digital maturity, but I am still surprised that so many smaller organisations do not have any online presence, particularly as a well-produced website with good functionality can provide an effective way for SMEs to compete with larger businesses.

“It is vital that businesses embrace new technologies and explore the many benefits of digital technology. There are of course risks associated, but if the appropriate advice is taken early, then it can pay dividends and support the transition from a small business into a larger one.”
Fergal Dowling, Partner