Small Businesses Making the Most of Their Connectivity

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The Broadband Stakeholder Group (BSG), the UK Government’s advisory group on broadband, has launched the results of a detailed survey into the internet usage of 1000 micro-businesses (those with between 0-9 employees). The survey finds that although 87% of micro-businesses have an internet connection, older businesses – those in operation for more than five years – are less likely to be taking full advantage of the internet in growing their business.

Comres undertook the quantitative research via 1000 telephone interviews with business decision makers. Micro-businesses form over 95% of all enterprises in the UK and account for nearly one third of total employment. The research found that the main barriers to greater digital adoption appear to be the lack of awareness of, and attitude to, fully utilising web-based applications (from social media to e-invoicing and use of the cloud).

This lack of awareness and attitude can in fact have a large knock-on effect to the economy. Of the 12 applications that were tested, without exception younger businesses – particularly those in operation for less than 5 years – were more likely to use an online application.

According to some studies, if micro-businesses and small and medium size enterprises, made full use of digital technology, they could unlock £18bn in growth. Despite this importance, their digital connectivity requirements remain poorly understood by both industry and policy makers.

The top reason that companies gave for not using any of the 12 applications* apart from online banking, where security was the primary barrier, was that they felt it was ‘not relevant’ to them. The BSG are clear that whilst some companies may be correct in this assessment and are making an informed choice, it is likely that many of them do not realise how these services would benefit them. Government, industry and charities need to be renew their focus on educating micro-businesses of the benefits these applications can bring them which would lead to greater productivity and growth.

The survey also found that of those companies with internet connections, the vast majority had a fixed line with 69% taking standard vs 22% using superfast broadband. BT was the most popular provider by some way with TalkTalk and Virgin tied on 8% behind them. Price was the primary driver for why businesses choose a certain internet product but over 16% of respondents did not make an informed choice based on the characteristics of a product on connection but because it was either the first they came across or was already in place.

The BSG recommends that both regulators and policy-makers continue to focus on SMEs, in particular micro and small businesses, to help inform schemes aimed at increasing companies’ ‘digital maturity’.

Matthew Evans, CEO, BSG said “The connectivity demands of micro-businesses are particularly under recognised by industry and Government. This research helps to improve that lack of knowledge of micro-businesses by raising serious concerns about the level of awareness and attitude that some of these organisations have in relation to digital services. Younger organisations, possibly looking to differentiate themselves, are more aware and open to making better use of broadband enabled products. If this understanding cannot be replicated in older businesses then it is unlikely that we will be able to ascertain the skills or bandwidth demands of this sector – resulting in less growth for UK plc.”