North-west small businesses exceed UK average on digital capability

A study by Lloyds Bank indicates that the North-west is exceeding the national average on digital capabilities in small businesses.

The report surveyed 1,500 small business including over 100 in the North-west, looking at responses from leaders as well as business data to understand how SMEs are adapting to new technology and the digital world.

Since the first study in 2014, the picture in the North-west has improved significantly, going from an Index Score of 42 in 2014, to 61 in 2019, ahead of the UK average of 60.  The region has also seen the number of SMEs who are “offline” dropping from 13% to just 1%. The index figure is based on six criteria, the Essential Digital Skills framework, which looks at digital capabilities for:

• Communicating
• Creating
• Managing information
• Problem solving
• Transacting
• Cybersecurity

While the report drew a positive conclusion for digital adoption for North-west small businesses, the survey also highlighted that many businesses were still lagging behind compared to what is possible. 

The vast majority of North-west small businesses have the skills to conduct business securely in an increasingly online world, there remains rooms for improvement in content creation and data analysis.

Mirroring the national picture, over a quarter of small businesses report that they lack the skills for any tasks in two of the six categories of the Essential Digital Skills framework – creating, which encompasses social media and content marketing, and creating and maintaining a website; and problem solving, looking at the use of new technologies and data available through digital channels to inform business decisions.

Furthermore, 38% of leaders in the North-west feel that digital technologies are not relevant to their businesses. The report, however, highlighted that strong digital skills and capabilities correlated to turnover for North-west small businesses.

Elyn Corfield, Lloyds Banking Group’s Ambassador for the North West, said:

Cyber-attacks have become ever more prevalent and the destructive damage they cause can have long lasting effects. So, it’s fantastic to see North West firms increasing their cyber security skills to help combat this.

“However, with more than half of all businesses in the region lacking the full range of essential digital skills, many are still missing out on a huge opportunity.

“Our research found that an average small business in the UK with strong digital skills and behaviours earned around £260,000 more a year than one without. This is money that could be spent on hiring more staff, training employees and growing the business.

“An important part of the Northern Powerhouse is the Digital Powerhouse, and along with the arrival of 5G this looks set to accelerate the demand for digital skills in the region. Capabilities like SEO, social media marketing and data analytics will become a critical factor for businesses to succeed in the future.”