London’s thriving technology and start-up scene is recognised as one of the strongest globally, with no less than thirteen “unicorns” technology start up businesses worth at least $1bn calling the City their home last year, according to the research consultant Beauhurst.
Yet, our latest Business Digital Index (BDI) reveals that just over a third (36%) of London-based small and medium-sized businesses lack basic digital skills. This significant gap between a highly-skilled technology sector and small, local businesses is one that needs addressing if London is to remain the undisputed tech capital of Europe.
While there is still a way to go, progress has been made when it comes to consolidating digital skills. According to our digital skills index, 99% of SMEs and charities in the Capital have now moved online, up from 92% and 76% respectively since the BDI was first commissioned in 2014.
But 34% of small businesses still have no website for their business, and over 30% are still not using social media to promote their organisation.
Perhaps what’s more concerning is the 66% of businesses that aren’t investing in digital skills, and the 26% of firms that don’t consider being online as relevant to their business.
A common barrier holding businesses back from doing more online are concerns about security, with almost half of London businesses (48%) feeling they don’t have skills to prevent online fraud and scams. Time-strapped business owners also tell us they simply don’t have the time to set up their online presence. But getting on board with digital will enable businesses to get ahead of the curve and will save them time in the long run.
Digital skills matter
Business success and digital skills are inextricably linked. Improved digital capability could generate an additional £85bn in turnover for UK businesses, helping them unlock their potential to grow and thrive. For businesses looking to broaden their customer base, getting online can lead to a wealth of new opportunities, whether that’s broadening their local market or tapping into overseas demand.
Social media is one of the prime channels for businesses to build widespread brand awareness, and to carry out targeted advertisements outside of their traditional channels. Creating a sense of community through interactive posts can really engage a small business’ customer base.
Used effectively, online tools such as invoicing systems and automatic stock replenishment systems can save a huge amount of precious time. For example, London-based social care organisation Cera Care found using digital analytics means they can plan their workforce’s time more efficiently. In fact, organisations that have implemented digital to fuel growth report saving 30 minutes of time per person for each transaction carried out online, according to the Good Things Foundation.
Taking the leap
As an entrepreneur, small business or charity, proactivity is key to improving digital skills. Of course, there are an abundance of online tools out there – Youtube, and free Google courses to name a few, but many businesses prefer face to face support from an expert in a seminar or workshop who can give them tailored advice. We partner with Google to offer digital skills workshops for small businesses and charities across London, focusing on topics such as raising your business’ profile to online customers and improving your online business security.
Businesses should be motivated by the possibilities that being online can give them, we need to shift mindsets that digital adoption is a difficult, complicated process. It’s a whole new world of connectivity and simplified processes to explore, and, with a helping hand, small businesses can make the transition more easily than they might have anticipated.
For those small businesses embracing advanced technologies such as cloud, online accounting software and digital training tools, there is the opportunity to generate an additional £100,000 in annual turnover compared to those who have none. To overturn these untapped growth opportunities, we have committed to provide digital skills training for 2.5m individuals, SMEs and charities by 2020. Our objective is that by this time next year, more business than ever in the capital will be reaching their potential and trading, advertising, and connecting to customers online.