More SMEs are seeing the benefits of being digitally enabled but there are still around 1.2 million that lack basic digital skills.
This means they are missing out on potential revenue and customer interaction, according to the second annual UK Business Digital Index by Lloyds Bank.
The Index, in association with Accenture and digital skills charity Go ON UK, tracks the level of digital adoption of SMEs and charities, for example running a website, using e-commerce, maintaining a social media presence or using online banking tools.
In the first year of comparison the Index shows that there has been slow but positive progress in digital adoption among all organisations in the past year with an overall rise in the UK Index score by two points to 102.
However, the report also highlights that some SMEs and charities still do not understand the benefits of digital technology and that a ‘digital blind-spot’ remains, potentially jeopardising their success. One-quarter of all organisations surveyed believe digital is ‘irrelevant’ to them.
Charities struggle to keep up as SMEs show some momentum
The number of charities with basic digital skills has dropped from 45 to 42 per cent from a year ago – a decrease of around 6,000 charities, showing a continued lack of digital adoption.
In contrast, the number of SMEs with basic digital skills has improved since 2014, increasing from 75 per cent to 77 per cent – an increase of over 100,000 in a UK population of 5.2m SMEs.
The overall limited progress in developing digital skills, reflects the fact that there is no increase in the amount of investment organisations are making to develop these skills, with three quarters investing no money at all.
Those charities at the lowest end of the digital skills spectrum also reported an increase in doubts as to how websites or social media could help increase their funding.
Miguel-Ángel Rodríguez-Sola, Group Director for Digital, at Lloyds Banking Group said: “The UK Business Digital Index provides a crucial measure of how UK small businesses and charities are adopting digital technology and we are extremely proud to be able to offer this insight and establish a strong link between digital skills and organisational success. In just one year it is pleasing to see that over 100,000 more small businesses in the UK now have basic digital skills.
“But what is also clear is that real challenges remain – over a million small businesses and charities still lack basic digital skills and the perceived benefits of being digital remain. For example 25 per cent of all organisations surveyed believe digital is ‘irrelevant’ to them. We cannot emphasis enough the benefits that digital adoption can offer – such as saving time, increasing revenue or funding or reaching wider audiences. Digital is the key to unlock these benefits.
“Even if an organisation does not believe they need to be online, many of their customers already are. There needs to be further awareness to give charities and businesses the confidence to do more online.”
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