UK Business and Charity Digital Index - Key findings

For the first time, a five year data view is available, enabling comparisons back to the 2014 (the benchmark year). The annual report brings to life new insights including a tangible link between digital and organisational productivity, using a blend of attitudinal and transactional data. The importance of a diverse workforce is explored, plus a spotlight on cybersecurity explains why it should be a key focus for all.

1. In the last five years, organisations have made significant digital progress

Digital usage is at an all-time high, 99% of SMEs and charities are now online. In 2014, 8% of SMEs and 24% of charities were offline.

The digital capability of UK charities has almost doubled since 2014, the Index score has increased by 92% from 24 to 46. For SMEs this has also increased by 24% from 45 to 56.

Compared with 2014 there are now 50% fewer SMEs and 81% fewer charities in the group with the lowest digital capability. This change is the result of a shift in mindset as 71% of SMEs and 67% of charities with the lowest digital capability now recognise that digital is relevant to their organisation. This has increased by 31% and 24% respectively since 2014.

As such, compared to 2014, there are over five times (425% increase) as many charities and nearly twice as many SMEs (72% increase) with the highest level of digital capability.

Since 2014, charities' growth in digital usage has surpassed that of SMEs. Some of the largest changes include:

  • Nearly one-third (29%) of charities now use Cloud-based IT systems, this is 15 times more than in 2014.
  • Two-thirds (65%) of charities are now accessing Government Digital Services, more than seven times as many as in 2014.

 

There are now nearly one million SMEs and charities on 'the cusp', with four of the five Basic Digital Skills, up 34% in one year.

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2. However there is still an £85 billion productivity gap which digital can close

60,000 (30%) charities and 655,000 (16%) SMEs have low digital capability. The impact of this is vast for the UK – for the first time using both transactional and behavioural data, Index insight reveals that SMEs with low digital capability could unlock up to an additional £84.5 billion turnover if they were to develop high digital capability.

  • The biggest opportunity exists for sole traders, as 41% fall within the low digital capability bracket.
  • If these sole traders were to develop high digital capability, individually they could generate up to an extra £24,000 of turnover per year.
  • If all sole traders made this move this would add up to £43.3 billion in increased turnover for UK plc.

Organisations still have progress to make with Basic Digital Skills:

  • 103,000 (52%) charities have all five skills (up 4% since 2017).
  • 2.4 million (58%) SMEs have all five skills (down 1% since 2017).
  • Less than half (49%) of SMEs in the West Midlands have all five Basic Digital Skills – the lowest of any region.
  • In the third sector, charities from the South West and Wales have the lowest Basic Digital Skill levels (45%) – this is flat year-on-year.

 

'Problem Solving' is consistently the most difficult skill to obtain; tasks such as ‘customer analytics’, and ‘tailoring products and services to fit user feedback’ are the most challenging.

ince 2017, the number of SMEs with 'Problem Solving' as the missing skill (to achieving all five) has increased from 65% to 73%. For charities this has gone up from 36% to 64%.

.5 million (62%) SMEs are saving time through their use of digital – more than twice as many compared with 2014. On average they report saving one day per working week.

However, 1.6 million (38%) SMEs are not yet tapping into these time savings and will be missing out on; productivity gains, cost savings, and crucially better work-life balance and wellbeing.

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3. There are key opportunity areas to drive digital transformation that works for all

Benefit Recognition

The 2018 Business and Charity Digital Index shows that organisations often do not understand or acknowledge the full value of their current digital activity. 64% of SMEs do not attribute any increase in sales to their digital activities, however data shows that 85% of this group have increased sales by up to 25%.

Organisations find it difficult to understand the potential applications of new technologies and the value they could add. For example, 68% of SMEs claim understanding of Cloud services yet only 39% intend to adopt it if they have not already. The 2018 data shows there is a correlation between Cloud adoption and increased turnover, demonstrating the value of the missed opportunity.

Accessibility For All

More than 10 million* of the UK online population have a registered disability, however data this year reveals that 96% of SME and 95% of charity websites do not currently meet international web accessibility guidelines (WCAG)**. When considering that 68% of SMEs and 73% of charities now have a website, this is a concern for digital inclusion.

'Designing for all' also includes adapting to consumer behaviours and expectations. Research shows that at least 25 million people in the UK prefer to shop through mobile***. However 2018 Index data reveals that only 18% of SMEs and 8% of charities have taken the step to optimise their services for mobile use.

Diverse Workforce

Research shows that 81% of UK tech jobs are currently filled by men† and only 19% of SME leaders are female††; however, the 2018 data shows that women in business are 18% more likely to have Basic Digital Skills than men (65% vs. 55%).

The 2017 Business Digital Index demonstrated that the most digitally capable SME leaders are twice as likely to report increasing turnovers compared to the least digitally capable. A larger female cohort in leadership positions would propel the SME and third sectors forward by bringing increased digital skillsets to smaller organisations.

Cybersecurity

Now that 99% of organisations are online, it is more important than ever for them to have the knowledge and tools to grow and maintain their online presence safely.

The 2018 data finds there are more SMEs than ever with robust security infrastructures in place online (72%), however there is a dichotomy. This year there are fewer SMEs who feel adequately skilled to protect themselves; only 30% feel equipped to protect their customers from online fraud and scams. As such, cybersecurity is the most sought after digital skill; one in five want to grow this capability in the future.



* Lloyds Bank UK Consumer Digital Index 2018
** World Wide Web Consortium (W3C), 2018
*** E-commerce News Europe, 2017
Tech Nation 2018
† † Department for Business, Energy & Industrial Strategy, 2018

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