Digital divide among UK business is holding back the economy

April 29, 2016 @ 12:01 by Alison Cowie

… according to new research by the CBI and IBM

A digital divide is opening up across the British economy, with just over half (55 per cent) of ‘pioneer’ firms adopting digital technologies and processes, while the other half (45 per cent) are falling behind. This is according to new research by the CBI and IBM.

Despite the UK taking top place globally for e-commerce and fifth place for the availability of technology, it ranks only fourteenth in the world for company-level adoption of digital technology, with many companies struggling to digitise their businesses at the rate of peers in other countries.

Companies cite a mix of connectivity challenges and security concerns as barriers to digital adoption, but predominantly they are hindered by a lack of appropriate skills inside their business (42 per cent of firms) and an unclear return on investment (33 per cent).

The problem is not lack of conviction about the potential impact. Nearly all firms believe that digital technology has the ability to revolutionise the business landscape, driving productivity (94 per cent), growth and job creation, and almost three quarters (73 per cent) see improved customer satisfaction and experience as its biggest benefit. To take advantage of digital technology across the economy, the CBI, the UK’s largest business group recommends that firms:

Appoint a Chief Digital or Technology officer to the senior executive team to drive digital strategy and execution
Increase the age and skills diversity of boards and board advisers, drawing on the expertise of a new generation of ‘digital natives’.
Carolyn Fairbairn, CBI Director-General, said: “Businesses globally are in the throes of an extraordinary digital revolution that is transforming productivity and creating a new generation of winning companies. But in the UK, too many firms are being left behind. While pioneering firms are seizing digital opportunities, nearly half are struggling – a growing digital divide that is threatening UK competitiveness.

“It’s vital that businesses in all sectors – from manufacturing to retail – truly understand digital technology’s potential, from the boardroom to the shop or factory floor. Giving digital a human face by appointing a chief technology officer will help businesses build the long-term digital strategies that will be critical to their futures.

“And by harnessing the expertise of the generation at the heart of the digital revolution, firms will be better able to make the right investments for their digital future.”

David Stokes, chief executive of IBM UK and Ireland, said: “Unlike previous technology shifts, digital is impacting the way we work, play and go about our daily lives. It also presents both a challenge and opportunity for every business – across all sizes and sectors.

“Digital offers not only the opportunity for much needed productivity gains alongside a new canvas upon which organisations can innovate to drive new levels of growth.

“As one of the leading digital economies in the world, the UK finds itself with a tremendous opportunity and responsibility for business leaders to sustain and grow our leadership in the world. This is an opportunity that we in the business community should be hugely excited to face together.”

Read the CBI Survey, Embracing Digital in Every Sector, here

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