Digital divide holding back UK growth

A lack of investment in new digital technology is holding back the growth of the UK economy.

The CBI warned a ‘digital divide’ was opening up across Britain with just over half, 55%, of “pioneer” firms adopting digital technologies and processes while the remainder “fall behind”.

The CBI, along with IBM, said that although the UK takes top place globally for e-commerce and fifth place for the availability of technology, it ranks only fourteenth for company-level adoption of digital technology. Many companies are struggling, they said, to digitise their businesses at the rate of those in other nations.

Businesses are citing a mix of connectivity challenges and security concerns as barriers to digital adoption but the main reason for the slow take-up is a lack of appropriate skills in their business – 42% of firms – and an unclear return on investment – 33%.

This is despite 94% of firms believing that digital technology has the ability to revolutionise the business landscape driving productivity, growth and job creation and almost three-quarters see improved customer satisfaction and experience as its biggest benefit.

The CBI urged businesses to appoint a chief digital or technology officer to their senior executive teams to drive digital strategy and execution and increase the age and skills diversity of boards and board advisers drawing on the expertise of a new generation of digital natives.

“Businesses globally are in the throes of an extraordinarily 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 and it is threatening competitiveness” said Carolyn Fairbairn, CBI director-general.

“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. 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.”