Digital divide could be holding back the UK economy

Nearly half of UK businesses could be in danger of falling behind as they fail to adopt digital technologies, according to a new report.

The research, from the Confederation of British Industry (CBI) and IBM, found that 55% of businesses could be classified as ‘pioneer firms’, adopting new digital technologies in order to drive productivity.

This means that 45% of businesses are unwilling or unable to embrace the technologies however and this, according to the report, could see them falling behind.

The study ranked the UK as the top country globally when it came to e-commerce. It also ranked fifth when it came to the availability of technology but only 14th for company-level adoption of digital technology.

Almost all of the companies surveyed saw the potential benefits of digital technology. 94% said they believed it would drive productivity, growth and job creation, while nearly three quarters cited its greatest benefit as improved customer experience and satisfaction.

Barriers to adopting digital technologies include a lack of appropriate skills inside the organisation, cited by 42% of companies. A third said they were unclear on the return on investment related to digitisation. Other problems highlighted included connectivity issues and security concerns.

The CBI fears that this could damage the UK’s competitiveness compared to other countries with a higher digital take-up by company. It could also leave some individual businesses struggling as digital technologies become more commonplace. This could leave stragglers operating at a disadvantage and could lead to them requiring turnaround management.

The CBI issued three recommendations that, it says, can help businesses to more fully embrace digital technologies. The first is to appoint a chief digital or technology officer to drive digital strategy and execution. Businesses should also increase the diversity of their boards and board advisors in terms of ages and skillsets, making better use of ‘digital natives’.

Finally, the CBI would like to see more businesses working together on digitisation. Pioneer firms could, for example, offer workshops and coaching for those companies that are still struggling to get started.

By Phil Smith

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