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Lloyds Bank has just launched its annual Business Digital Index. Now in its third year, the Index explores the attitudes and usage of digital technology across small businesses and charities, and has become a crucial measure of how each are adopting digital technologies in an increasingly online world.

Digital maturity increases both for small businesses and charities – but there is still more to do

The research shows there has been some encouraging progress in the digital maturity of small business and charities in the UK.  Over 2 million small businesses (62%) and 102,000 charities (51%) now have Basic Digital Skills according to the definition by digital skills experts Doteveryone.  Each region in the UK has also shown progress in the last twelve months with particularly strong growth seen in Scotland, East England and South East. However, while strides have been made, there are still 1.4m small businesses (38%) and 98,000 charities (49%) without basic digital skills, indicating more work needs to be done.


There is a continued and strengthening link between digital maturity and organisational success

Not only are basic digital skills important for today’s society but organisations have signalled a strengthening link between digital maturity and organisational success. The most digital small businesses are now more than twice as likely to report an increase in turnover in the past two years than the least digital, and almost two-thirds of small businesses (65%) are using digital to reduce costs. These trends runs true for charities too, with well over half of charities (52%) stating that cost-savings are just one of the advantages of being online.

There are opportunities for SMEs and charities to further embrace social media and shift advice preferences

The rise of self-service digital was another clear theme in the 2016 Index, with businesses and charities both preferring to turn to friends, relatives or colleagues first followed by online search for help or information.  Social media usage amongst small businesses and charities also saw increases to 45% and 44% respectively but still more than half of both groups are yet to embrace these digital channels as a way to interact with current or prospective customers.

Using digital to help with exporting supports small businesses

Another possible area for growth is how businesses employ digital when trading overseas – such as using e-mail to overcome time zone differences, or international online payments.

Currently only one in five small businesses (21%) are using digital to support their overseas trading. This does vary by sector, with retail businesses rising to 26%, with manufacturing businesses that use digital to trade overseas the highest at 39%. Of the proportion of small businesses which reported an increase in turnover over the past 12 months, a quarter (24%) are trading overseas.

Nick Williams, Consumer Digital Director, Lloyds Banking Group said: “It’s very encouraging that the Business Digital Index shows an even stronger link between the digital maturity and organisational success of businesses and charities, with the small businesses most digitally capable being twice as likely to increase turnover. However, there are still too many without the basic digital skills which allow them to make the most of the internet.
We need to motivate by raising awareness of the benefits of digital, including saving costs and time. Just as important is to remove the barriers and for some, concerns around online security are holding them back from adopting digital technology. We need to do more to reassure and support them to develop their cyber security skills.”

For more information, please;

Doteveryone Basic Digital Skills framework– organisations have ‘basic digital skills’ when they have all five of the below skills.

  1. Managing information
  2. Communicating
  3. Transaction
  4. Creating
  5. Problem-solving

NB: In 2015, Doteveryone revised their skills definition for digital capability, moving from the previous categories of Basic Online Skills to a new definition of Basic Digital Skills. This updated definition introduced a new ‘problem solving’ category, and refreshed many of the tasks required for the other basic skills.

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