THE UK`S £92 BN DIGITAL OPPORTUNITY

Transcription

THE UK’S
£ 9 2 B N D I G I TA L
OPPORTUNITY
JOHN CRIDLAND
CBI DIRECTOR-GENERAL
JOHN ALLAN
F E D E R AT I O N O F S M A L L B U S I N E S S E S
N AT I O N A L C H A I R M A N
“This report reveals a huge Digital Opportunity for UK businesses.
Both the public and private sectors have much to gain from harnessing
the benefits of digital technology. The UK is the tech capital of Europe
but digital advances never stop, so if we want it to stay ahead we need
more young people studying computing to a higher level. Looking into
the future, the proposed EU digital single market, if delivered well,
would be great news for both business and consumers, reducing
barriers to e-commerce across the continent.”
“Small businesses face challenges when it comes to digital
technologies – from access to ultrafast broadband, to finding staff
with the right skills. This report shows that if they can overcome
these, it will greatly enhance their opportunities for growth. The FSB
calls on the government and industry to continue helping our small
businesses achieve their full digital potential in the years ahead.”
2
FOREWORD
EXECUTIVE
SUMMARY
THE UK’S
OPPORTUNITY
CONTENTS
T H E I M PAC T O F
D I G I TA L O N T H E
UK ECONOMY
U K ’ S D I G I TA L
LEADERS SHOW
T H E WAY
RESEARCH
METHODOLOGY
I N D U S T R Y,
COUNTRY &
R E G I O N A N A LY S I S
4
6
9
13
35
51
62
FOREWORD
S O Q U I C K I S T H E C U R R E N T PAC E O F D I G I TA L
C H A N G E I N T H E U K T H AT A Q UA R T E R O F
B U S I N E S S E S A R E N OW U N S U R E W H AT T H E I R
INDUSTRY WILL LOOK LIKE IN A YEARS’ TIME.
Y
es, you read that correctly: this report highlights that the scale and scope of digitalisation
across all sectors means that 25% of businesses are unsure what their industry will look
like next year.
The only reasonable response is that all firms must start to front-load digital capabilities
to keep pace. This report makes the outlook very simple: think big, think bold, think
digital. If a business properly invests to become a digital leader then, among many other
benefits, its revenues are likely to go up and their costs are likely to go down. Firms across
all regions and from all sectors who have attained the edge digitally have increased their
revenues by 5.3% and reported savings of 5.5%. These figures are respectively 36% and
34% better than non-digital leaders.
There are two key elements at play here. The first is that by improving the bottom line, a
self-perpetuating financial advantage kicks in – the cumulative effect of which would be
worth an extra £92bn a year to the UK economy. The second is that digital success is not
just about being a tech firm, the Digital Opportunity is for every business: from the favourite
neighbourhood takeaway to the multi-national services firm. This latter point matters a lot.
4
FOREWORD
[CONTINUED]
We’re talking here specifically about how digital
capability is changing the rules of competitive advantage
in all sectors. We’ve seen digital famously revolutionise
markets in traditionally non-digital non-tech sectors by
Ocado, iTunes, Airbnb and Uber.
Although these examples certainly attest to the power
of digital being hugely disruptive, the idea posed by
this report is not that all firms should be an Ocado or
an Airbnb, nor that real change can happen only in
exceptional circumstances. But rather that all firms can
and should learn from them and digital leaders like them.
They underpin the spirit that is the future of commerce.
Our role is to be part of the connectivity infrastructure
solution. 85% of businesses in the UK are able to access
our network and for the next five years we’re spending
£3bn expanding it. But that’s only part of the story.
Virgin Media Business also offers high performance
digital platforms, including integration and collaboration
services, to help firms get further toward achieving
broader and better digital capabilities. We can help you
to think big, think bold, and think digital. We’re standing
ready to help you become a digital leader.
Our hyper-connected world is one where business
products are now created collaboratively using functions
like open source software and hosted on cloud-based
platforms, where phones are becoming wallets, and
where YouTubers are more famous with kids than their TV
and film equivalents.
I would like to extend my thanks to Oxford Economics for
producing such a well-researched and thought-provoking
report. It interviewed over 1,000 UK-based companies,
and this report measures the extent to which they are
making the most of the opportunity provided by digital,
and highlights significant and interesting differences by
industry, region, and company size. There is much to learn
and many opportunities to grasp from the conclusions ■
Virgin Media’s cable network is a fundamental part of the
UK’s technological infrastructure: what we provide is the
potential for businesses to become digital leaders.
P E T E R K E L LY
MANAGING DIRECTOR,
VIRGIN MEDIA BUSINESS
“FIRMS ACROSS ALL
REGIONS AND FROM
ALL SECTORS WHO
H AV E AT TA I N E D T H E
E D G E D I G I TA L LY
H AV E I N C R E A S E D
THEIR REVENUES BY
5.3% AND REPORTED
S AV I N G S O F 5. 5 % . ”
85%
OF BUSINESSES
IN THE UK ARE
ABLE TO ACCESS
OUR NETWORK.
5
EXECUTIVE
SUMMARY
BUSINESSES IN ALL SECTORS ARE
I N V E S T I N G I N T H E I R D I G I TA L CA PA B I L I T I E S .
T
he rise of digital is generating enormous, and enormously
positive, benefits across the UK. What this report makes
clear is that the digital revolution has now extended far
beyond the tech sector to become an essential part of doing
business for all firms, in every industry, and across all regions.
While the majority of businesses would still not describe
themselves as “primarily” digital, our research shows that
all companies are actually applying digital technologies
to some degree, and some much more successfully than
others. Firms are rightly looking to secure their share of the
benefits that digital capabilities can provide.
75%
OF FIRMS REPORT
SIGNIFICANT
INCREASE
IN DIGITAL
CONTENT IN
THEIR INDUSTRY.
6
EXECUTIVE SUMMARY
I N V E S T M E N T I N D I G I TA L CA PA B I L I T I E S
CAN REAP REWARDS FOR BUSINESS.
Businesses are investing in fast and reliable technology,
as much as in building more efficient relationships with
customers and establishing more flexible ways of working.
Across all firms, these digital capabilities encourage
many benefits, and most impressively a significant boost
to bottom line improvement. The rewards can be greater
still, depending on the extent to which digital capabilities
are prioritised. This report explores that distinction.
But it’s not just about bottom line performance. Digital
capabilities also help companies to strengthen their
competitive position – reach new customers, improve
supply chains, and create a happier workforce. These
broad benefits hold importance for commercial success
in the long run.
[CONTINUED]
D I G I TA L L E A D E R S A R E T H O S E F I R M S
PRIORITISING INVESTMENT IN A
B R OA D R A N G E O F CA PA B I L I T I E S .
Digital leaders appreciate the value of the full breadth of
digital capabilities to a far higher extent than other firms.
More than 95% of them rate each of our capabilities as
important, compared with 50% to 60% for other firms.
They invest no more money than other firms in technology,
but they spend it more wisely and so achieve better results,
and they achieve better financial improvements which
average out at more than 30% higher than other firms.
H O W FA R AWAY A R E M O S T F I R M S
F R O M B E C O M I N G D I G I TA L L E A D E R S ?
This research highlights a large gap between companies’
current strength in digital capabilities and where they would
like to be in three years’ time. The greatest concern for most
firms is around technical infrastructure, closely followed by
worries that they aren’t offering appropriate pay, conditions,
or career developments to attract the key staff they need.
A common underlying fear is of being left behind by the
rapid pace of technological change.
87%
OF DIGITAL LEADERS
SAID THAT INVESTMENT IN
DIGITAL CAPABILITIES HAS
RESULTED IN A HAPPIER AND
MORE ENGAGED WORKFORCE.
92%
93%
SAID IT HELPED THEM REACH
NEW CUSTOMERS.
SAID THEY IMPROVED THE
QUALITY OR EXPERIENCE OF
THEIR PRODUCTS OR SERVICES.
7
EXECUTIVE SUMMARY
[CONTINUED]
HOW CAN FIRMS GET THERE?
The example currently being set by digital leaders is one
to follow – businesses should recognise the importance of
harnessing the full range of digital capabilities. And they
should develop a convincing business case, based on their
strategic priorities, as well as identifying the benefits that
digital can provide. These will help not only to secure funds,
but focus management attention on achieving results.
S M E S W I L L L E A D T H E WAY T O
G R O W T H B U T M O R E C A N A LWAY S
BE DONE TO HELP ALL FIRMS.
Larger firms, on average, have stronger digital capabilities
but SMEs are striving to close the gap. They plan to
increase staff by 6% over the next two years by employing
more people with digital skills - three times the increase
planned by larger firms.
T H E U K- W I D E B E N E F I T S O F D I G I TA L
AND THE OPPORTUNITIES IT PRESENTS.
The contribution of digital capabilities should not be
underestimated.
The UK already possesses considerable technological
and economic strengths, and companies are eager to
get the most out of their digital investments. This report
highlights themes for future discussions on how to best
support the UK digital growth. With the potential of
yet more technological breakthroughs, there are vast
opportunities that the nation should be poised to seize ■
• T
hey are generating £123 billion in performance
improvements across the economy: equivalent to 3.4%
of total GDP last year alone.
• C
ompanies project that over 1 million new jobs could
be added as a direct result of enhancing their digital
capabilities over the next two years.
• C
ould provide a further annual boost of £92 billion to
the economy if firms were able to fully develop their
digital potential. This is equivalent to 2.5% of GDP.
£123BN
£92BN
1M
CONTRIBUTION.
OPPORTUNITY.
JOBS.
8
1
THE UK’S
OPPORTUNITY
“ W E H AV E S U R V E Y E D OV E R
1,000 C O M PA N I E S O F
VA R Y I N G S I Z E S AC R O S S
INDUSTRY SECTORS AND
ALL REGIONS OF THE UK.”
RESEARCH
METHODOLOGY
INDUSTRY,
COUNTRY &
REGION ANALYSIS
his report tells an optimistic story of how digital technology is affecting business.
It comes from the research undertaken here at Oxford Economics. We have surveyed
over 1,000 companies of varying sizes, across industry sectors, and all regions of the UK.
We asked how digital technologies are disrupting their industries, how business
performance is being affected, the actions companies are taking to respond, and their
plans for the future.
UK’S DIGITAL
LEADERS SHOW
THE WAY
T
THE IMPACT OF
DIGITAL ON THE
UK ECONOMY
THE MAJORITY OF FIRMS DESCRIBE
T H E M S E LV E S A S P R OV I D E R S O F
N O N - D I G I TA L P R O D U C T S A N D S E R V I C E S .
B U T A L L C O M PA N I E S A R E S E E K I N G T H E I R
S H A R E O F T H E U K ’ S D I G I T A L O P P O R T U N I T Y.
THE UK’S
£92BN DIGITAL
OPPORTUNITY
THE UK’S
OPPORTUNITY
10
“ W E A S K E D H OW D I G I TA L
TECHNOLOGIES ARE DISRUPTING
THEIR INDUSTRIES, HOW BUSINESS
PERFORMANCE IS BEING AFFECTED,
T H E AC T I O N S C O M PA N I E S A R E
TA K I N G T O R E S P O N D, A N D T H E I R
PLANS FOR THE FUTURE.”
INDUSTRY,
COUNTRY &
REGION ANALYSIS
Including all activity that uses computer and communications equipment to work with information in digital form.
RESEARCH
METHODOLOGY
1
In Section 2 of this report, we estimate the impact of
digital technologies on the UK economy. We calculate
the contribution to business performance and, through
aggregation, estimate the overall impact on GDP. We also
examine the outlook for jobs over the next two years. We
then estimate the Digital Opportunity as the potential
benefit that would accrue to the economy if all companies
could reach their digital potential. We further analyse
these results by industry, region, and company size. And
we conclude with several suggestions that could help the
economy achieve its potential.
In Section 3 we identify a group of digital leaders across
the UK that currently get the most out of these digital
opportunities. We describe what these leaders are doing
differently, and provide guidance to other companies
seeking to improve their own performance and seize the
Digital Opportunity ■
UK’S DIGITAL
LEADERS SHOW
THE WAY
Yet all companies, including the 57% of our sample
that currently provide mostly non-digital products and
services, are seeking to gain their share of the UK’s Digital
Opportunity. That is, the potential additional benefit that
would accrue to the economy if all companies reached
their digital potential.
Our research highlights six digital capabilities that
companies are building to get the most out of the Digital
Opportunity (see Sidebar 1). These include technical
equipment, infrastructure, and software, but also the
softer skills and behaviours needed to identify and
respond to the emerging market opportunities and threats
that digital presents.
THE IMPACT OF
DIGITAL ON THE
UK ECONOMY
We have deliberately used an expansive definition of
“digital” for the purpose of this research1 allowing us to
consider how all UK-based companies could get the
most out of digital. We are seeing the emergence of new
companies using digital in innovative ways, introducing
new business models, or delivering their products and
services in digital form. Our research shows, however,
that these “mostly digital” firms remain in the minority.
While we expect that these companies will increase as
a share of the UK economy in the years ahead, a large
number of firms will never describe themselves as
“digital firms.”
[CONTINUED]
THE UK’S
£92BN DIGITAL
OPPORTUNITY
T H E U K ’ S £ 9 2 B N D I G I TA L O P P O R T U N I T Y
11
SIDEBAR 1
T H I S R E S E A R C H H I G H L I G H T S S I X K E Y D I G I TA L CA PA B I L I T I E S .
Digital strategy and leadership
Open and collaborative partnerships
Digital customer engagement
The ability of a company’s leadership team to
understand how digital is changing their industry,
to develop appropriate strategies and plans in
response, and implement changes quickly and
successfully. This requires market intelligence,
an effective leadership team, and a flexible
organisation that adapts readily to change.
How effectively a company collaborates
with external partners through information
sharing or more formal partnership arrangements.
Examples include using crowdsourcing platforms
or working with universities to encourage
product innovation.
A company’s use of digital channels to engage
with their customers to improve customers’
digital experience, to gain greater insight into
customer needs, and to use this to improve
product or service quality.
INDUSTRY,
COUNTRY &
REGION ANALYSIS
A company’s ability to source, access, process, consolidate
and analyse digital information for commercial
advantage. Factors for success include a clear strategy
on how information is used, governance processes to
maintain data quality, data security and privacy policies.
Companies will also benefit from underlying specialist
technology required to collect, process and analyse
raw data and turn it into valuable information.
RESEARCH
METHODOLOGY
Digital information
A company’s ability to attract and get the best out
of staff with key digital skills, through attractive
conditions and work environment. Key digital skills
are broadly defined to help companies get the most
of digital technology and new market opportunities,
including ICT skills, software engineering, information
management, data mining and analytics, digital
marketing and social media analytics.
UK’S DIGITAL
LEADERS SHOW
THE WAY
Digital workforce
Information and Communications Technology (ICT)
equipment that helps the company access, store,
process, share, and present information in digital
form. It includes communications infrastructure,
hardware and software. The technology may be
owned by the company or accessed on demand
(e.g. cloud storage or Software as a Service).
THE IMPACT OF
DIGITAL ON THE
UK ECONOMY
Technology infrastructure
THE UK’S
£92BN DIGITAL
OPPORTUNITY
W H AT A R E D I G I TA L CA PA B I L I T I E S ?
12
2
T H E I M PAC T
O F D I G I TA L
ON THE UK
ECONOMY
“WE ARE SEEING MORE AND
M O R E N E W C O M PA N I E S A P P LY I N G
I N N OVAT I V E T E C H N O LO G I E S
T O TAC K L E A W I D E R A N G E O F
INDUSTRY CHALLENGES.”
ADIZAH TEJANI, HEAD OF ECOSYSTEM
D E V E L O P M E N T, L E V E L 3 9
INDUSTRY,
COUNTRY &
REGION ANALYSIS
THE NUMBER OF EMPLOYEES COMPANIES
ANTICIPATE HIRING AS A DIRECT RESULT
OF DIGITAL INVESTMENTS.
Companies tend to be somewhat over-optimistic when
forecasting, but this figure nevertheless demonstrates a
level of confidence in the potential of digital to create
jobs. Finally, we asked firms to estimate the potential
improvement that would accrue to their financial
performance if they had access to the best available
digital capabilities. By aggregating these responses,
we estimate that if businesses were able to take
advantage of the Digital Opportunity, the economy would
be boosted by a further £92 billion per year, equivalent
to 2.5% of GDP. These results were analysed by industry
sector, region, and company size to pinpoint how different
parts of the economy are responding to the digital
transformation, and the challenges of implementation.
This enabled us to identify the areas of greatest potential,
and to highlight where actions are most needed ■
RESEARCH
METHODOLOGY
1.1M
By this calculation, digital capabilities contributed £123
billion to the UK’s economy last year, equivalent to 3.4%
of GDP. We then asked companies to estimate how digital
is affecting their hiring plans over the next two years.
Some jobs will become obsolete, averaging approximately
2% or 300,000 jobs across all industries. But this level of
job loss is far outweighed by the number of employees
companies anticipate hiring as a direct result of digital
investments. Aggregating across the economy, these
new hires amount to 1.1 million: a net creation of 800,000
new jobs.
UK’S DIGITAL
LEADERS SHOW
THE WAY
e asked over 1,000 UK-based companies to estimate the
direct contribution digital technologies made to their
financial performance in the past year. They told us that
digital capabilities helped them increase their revenues
by 4.4% and reduce their costs by 4.3%. By aggregating
these results across the private sector, and controlling the
results to take account of industry competition and other
effects, we were able to estimate the likely impact on the
economy as a whole.
THE IMPACT OF
DIGITAL ON THE
UK ECONOMY
W
“A S A D I R E C T R E S U L T O F
D I G I TA L I N V E S T M E N T S ,
C O M PA N I E S E X P E C T TO
C R E AT E M O R E T H A N
A MILLION NEW JOBS
ACROSS THE UK OVER
THE NEXT TWO YEARS.”
THE UK’S
£92BN DIGITAL
OPPORTUNITY
T H E I M PAC T O F D I G I TA L
ON THE UK ECONOMY
14
FINANCIAL SERVICES
30%
TRANSPORT/STORAGE
28%
PROF/TECH SERVICES
25%
WHOLESALE/RETAIL
20%
CONSTRUCTION
20%
OTHER SERVICES
19%
OTHER INDUSTRIES
19%
EDUCATION/
HEALTHCARE
18%
MANUFACTURING
17%
0%
2
FIG. 1
Industries that have been
subject to significant
disruption from digital
technologies in the past
three years.
% figures include
respondents who said
they agree and agree
completely
INDUSTRY,
COUNTRY &
REGION ANALYSIS
43%
RESEARCH
METHODOLOGY
ICT
UK’S DIGITAL
LEADERS SHOW
THE WAY
sing standard industrial classifications2 to look across
different industries, our research indicates that ICT,
financial services, transportation and storage, and
professional and tech services have been subject to the
greatest disruption (see Fig. 1). It is also clear that all
industries are being affected to some extent by digital
transformation, with the majority of respondents in all
sectors (and 75% overall) reporting a significant increase
in digital content. Half of all respondents say that digital is
leading to an increase in competition, with 43% reporting
new competitors. And the pace of disruption is forecast
to increase significantly: one in four respondents say they
are unsure how their industry will look in a years’ time.
As one director of a mid-sized London music company
explains, “We have had to transform or disappear.”
THE IMPACT OF
DIGITAL ON THE
UK ECONOMY
U
THE UK’S
£92BN DIGITAL
OPPORTUNITY
T H E U K ’ S D I G I TA L E C O N O M Y
I S AC C E L E R AT I N G , E V E R Y W H E R E
15%
30%
45%
A summary of SIC codes is included in section IV. For a detailed breakdown, see ONS standard definitions at: http://www.neighbourhood.statistics.gov.uk/HTMLDocs/SIC/ONS_SIC_hierarchy_view.html
15
14%
FIG. 2
29%
16%
38%
17%
29%
YORKSHIRE/HUMBER
22%
EAST MIDLANDS
41%
NORTH WEST
15%
SOUTH EAST
11%
SOUTH WEST
16%
SCOTLAND
13%
WALES
15%
WEST MIDLANDS
11%
EAST OF ENGLAND
14%
9%
NORTHERN IRELAND
0%
Describing if their
company primarily:
n provides digital
24%
products and services
n provides digital content
25%
as part of its range of
products and services
27%
18%
Note: Due to a small
sample size, results for
Northern Ireland and North
East are directional only.
21%
18%
20%
17%
18%
10%
20%
30%
40%
50%
INDUSTRY,
COUNTRY &
REGION ANALYSIS
LONDON
NORTH EAST
RESEARCH
METHODOLOGY
Many other regions don’t lag that far behind. For example,
46% of North East firms are either digital providers or
provide significant digital content, and Yorkshire and
the Humber holds the highest share of digital providers
(22%). Wales, Scotland, the South West, the East, and the
TOTAL
digital firms as those that are getting the greatest benefit
from deploying digital technologies (see Fig. 11). Though
the distribution of these firms is different, they also show
an even spread of good digital practices across the UK ■
UK’S DIGITAL
LEADERS SHOW
THE WAY
But our research shows that even these companies are
generally enthusiastic about the potential offered by digital
technologies. More than three-quarters saying that digital
is a positive influence on their industry, and half saying it
should lead to improved employment prospects. London
leads as the location with the greatest number of digital
firms. A high percentage of London-based firms describe
themselves as digital providers, and an increasing number
provide a significant amount of digital content (together,
they comprise more than half of the firms in London).
North West have a higher percentage of digital providers
than the South East (see Fig. 2). In Section 3 (see page 11),
we look across all firms (including those that primarily deliver
non-digital products and services) and identify the leading
THE IMPACT OF
DIGITAL ON THE
UK ECONOMY
We asked firms to classify themselves by how they
were using digital technologies. Only 14% describe
themselves as “primarily” providers of digital products
and services. An additional 29% include a significant
amount of digital content in their products and services.
The remainder use digital technologies to varying extents
across different platforms.
THE UK’S
£92BN DIGITAL
OPPORTUNITY
T H E U K ’ S D I G I TA L E C O N O M Y I S
A C C E L E R AT I N G , E V E R Y W H E R E [CONTINUED]
60%
16
INDUSTRY,
COUNTRY &
REGION ANALYSIS
USE DIGITAL TECH
IN MARKETING,
PRODUCTION AND
DELIVERY OF NONDIGITAL PRODUCTS
AND SERVICES TO
THEIR CUSTOMERS.
RESEARCH
METHODOLOGY
INCLUDE A
SIGNIFICANT
AMOUNT OF
DIGITAL CONTENT
IN THEIR PRODUCTS.
RESPONDENT FIRMS
UK’S DIGITAL
LEADERS SHOW
THE WAY
DESCRIBE
THEMSELVES
PRIMARILY AS A
DIGITAL COMPANY.
1,000
THE IMPACT OF
DIGITAL ON THE
UK ECONOMY
14% 29% 57%
THE UK’S
£92BN DIGITAL
OPPORTUNITY
HOW ARE FIRMS
A D O P T I N G D I G I TA L
TECHNOLOGIES?
17
FIG. 3
40,000
35,000
Revenue growth related
to digital capacity in the
last year (£m).
5.6%
34,725
30,000
% growth from last year
RESEARCH
METHODOLOGY
25,000
20,000
15,000
4.8%
1 7, 3 7 8
UK’S DIGITAL
LEADERS SHOW
THE WAY
5.9%
3.2%
15,631
15,359
9,791
5,000
4.4%
4.4%
8,678
7, 5 0 1
4.5%
7, 4 2 6
3.9%
3.2%
3,557
2,755
INDUSTRY,
COUNTRY &
REGION ANALYSIS
3.4%
10,000
ED
U
E A CA
LT TI
H ON
C
A &
RE
H
O
RV TH
IC ER
ES
SE
FI
N
SE AN
RV C
IC IAL
ES
IC
T
SP
O
& R
ST TA
O TI
RA O
G N
E
N
A
TR
IN
D
U OT
ST H
RI ER
ES
0
PR
TE OF
C ES
H SI
SE ON
RV A
IC L &
ES
W
H
RE O
TA LE
I L SA
TR LE
A &
D
E
C
O
N
ST
RU
C
TI
O
N
M
A
N
U
FA
C
TU
RI
N
G
rofessional and Tech services firms (including accountants,
lawyers, designers, advertising agencies, engineers, and IT
consultants) generated £35 billion over the last year, the
largest share of the income gain from digital capabilities
(see Fig. 3). They are followed by wholesale and retail
companies, which contribute about half as much revenue
from digital sources. However, if the calculation is based
on percentage terms, construction reports the greatest
increase, at 5.9%. All sectors boosted their income by
3%–6% last year ■
THE IMPACT OF
DIGITAL ON THE
UK ECONOMY
P
THE UK’S
£92BN DIGITAL
OPPORTUNITY
E C O N O M I C I M PAC T O F D I G I TA L
– BY INDUSTRY
18
40,000
35,000
FIG. 4
4.4%
38,062
Revenue growth related
to digital capacity in the
last year (£m).
30,000
% growth from last year
20,000
4.3%
1 7, 7 0 6
15,000
4.7%
1 0,333 1 0,086
3.9%
9,51 2
5 .1 %
3.6%
8,349
7, 8 4 9
5,000
4.0%
7. 6 %
6,789
6,341
3.4%
3.2%
5 ,1 9 7
2,291
0.5%
285
INDUSTRY,
COUNTRY &
REGION ANALYSIS
5.3%
10,000
RESEARCH
METHODOLOGY
25,000
UK’S DIGITAL
LEADERS SHOW
THE WAY
N
O
R
IR TH
EL E
A RN
N
D
N
O
EA RTH
ST
S
L A EA
N ST
D
S
ID
M
LE
W
A
L A WE
N ST
D
S
YO
& RK
H S
U H
M IR
BE E
R
ID
M
SO
W UT
ES H
T
N
O
W RT
ES H
T
D
EN EA
G ST
LA O
N F
D
N
A
TL
SC
O
SO
U
EA TH
ST
N
D
O
N
0
LO
ondon’s hefty share of the UK economy means that it
comfortably provides the greatest increase in regional
GDP through its digital capabilities (see Fig. 4). When we
look at the percentage increase attributable to digital,
however, the results are differently distributed, with
London and the South East around the middle, and Wales,
Scotland, South West, and the East of England reporting
larger percentage gains ■
THE IMPACT OF
DIGITAL ON THE
UK ECONOMY
L
THE UK’S
£92BN DIGITAL
OPPORTUNITY
E C O N O M I C I M PAC T O F D I G I TA L
– BY REGION
19
56%
OF FIRMS EXPECT DIGITAL
WILL LEAD TO MORE AND
BETTER EMPLOYMENT
OPPORTUNITIES.
INDUSTRY,
COUNTRY &
REGION ANALYSIS
At Ocado, the world’s largest online grocer, Chief
Technology Officer Paul Clarke has a particular need for
high-quality software engineers. “We look for craftsmen
who are passionate about identifying better ways to do
things and who want to develop products that work,”
he says. “They need to be fast learners, self-starters,
and entrepreneurial” ■
RESEARCH
METHODOLOGY
ver the next two years, firms expect to employ many
more people as a direct result of investing in new digital
technologies. Though respondents did not specify the types
of new job for which they will hire, we expect them to be
a combination of highly technical (e.g. software engineers,
data scientists, advanced manufacturing experts) as well
as managerial and professional jobs.
UK’S DIGITAL
LEADERS SHOW
THE WAY
O
THE IMPACT OF
DIGITAL ON THE
UK ECONOMY
AC R O S S I N D U S T R I E S , I C T F I R M S W I L L B E T H E G R E AT E S T E M P LOY M E N T
G E N E R AT O R S OV E R T H E N E X T T WO Y E A R S I N P E R C E N TAG E T E R M S .
THE UK’S
£92BN DIGITAL
OPPORTUNITY
A POSITIVE OUTLOOK FOR JOBS
20
FIG. 5
250
Digital impact on jobs
in the UK by industry:
200
n intended increase in
150
149
11.2%
121
n jobs expected to
9.5%
106
100
become obsolete in
the next 2 years (‘000s)
4.2%
98
50
36
2.3%
24
26
5.3%
63
51
1.7%
2.2%
6.2%
70
5.0%
57
2.0%
2 .1 %
24
21
43
1.6%
2.8%
17
24
INDUSTRY,
COUNTRY &
REGION ANALYSIS
5.9%
2.2%
RESEARCH
METHODOLOGY
jobs in the next 2 years
to take advantage of
digital (‘000s)
7. 1 %
UK’S DIGITAL
LEADERS SHOW
THE WAY
N
A
TR
FI
N
SE AN
RV C
IC IAL
ES
ED
U
E A CA
LT TI
H ON
C
A &
RE
TI
C
RU
ST
N
O
C
H
SP
O
& R
ST TA
O TI
RA O
G N
E
N
O
G
N
RI
TU
FA
C
U
N
A
M
T
IC
W
RE HO
TA LE
I L SA
TR LE
A &
D
E
0
PR
TE OF
C ES
H SI
SE ON
RV A
IC L &
ES
ompanies also report that, as digital technologies disrupt
industry, some jobs will become obsolete. However, 44%
of respondents expect no jobs to become obsolete, while
across all industries the number of new jobs created far
exceeds the number of jobs expected to be lost (see Fig. 5).
ICT firms will see the greatest percentage increase in
employment over the next two years, with wholesale and
retail also expecting a particularly large (9.5%) increase ■
THE IMPACT OF
DIGITAL ON THE
UK ECONOMY
C
THE UK’S
£92BN DIGITAL
OPPORTUNITY
D I G I TA L I M PAC T O N J O B S
– BY INDUSTRY
21
FIG. 6
200
4.0%
173
171
Digital impact on jobs
in the UK by region:
n intended increase in
3.4%
3.6%
112
100
3.6%
107
3.9%
101
80
40
1.0%
n jobs expected to
3.4%
90
become obsolete in
the next 2 years (‘000s)
3.3%
84
76
1.0%
46
41
20
0.9%
1.0%
1.0%
29
29
31
1.2%
1.0%
0.9%
26
0.9%
24
23
21
3.4%
3.6%
48
42
1.0%
0.9%
13
11
S
L A EA
N ST
D
S
ID
M
LE
W
A
L A WE
N ST
D
S
YO
& RK
H S
U H
M IR
BE E
R
ID
M
SO
W UT
ES H
T
D
O
TL
A
N
ST
SC
EA
N
O
W RT
ES H
T
LO
N
D
O
N
0
SO
U
EA TH
ST
3.9%
32
1.2%
10
INDUSTRY,
COUNTRY &
REGION ANALYSIS
60
3.6%
93
O
R
IR TH
EL E
A RN
N
D
120
RESEARCH
METHODOLOGY
jobs in the next 2 years
to take advantage of
digital (‘000s)
140
N
160
3.9%
N
O
EA RTH
ST
180
UK’S DIGITAL
LEADERS SHOW
THE WAY
oth London and the South East project are adding over
170,000 new jobs in the next two years, and report the
largest percentage increase in employment: at 4% and
3.9% respectively. Other regions are not far behind with
both Scotland and Northern Ireland reporting similar
increases, and all regions reporting growth in excess
of 3%. To identify the steps that could help the UK
economy achieve this potential, we reviewed where the
opportunities are greatest and identified the obstacles
holding back industries, regions, or companies ■
THE IMPACT OF
DIGITAL ON THE
UK ECONOMY
B
THE UK’S
£92BN DIGITAL
OPPORTUNITY
D I G I TA L I M PAC T O N J O B S
– BY REGION
22
30,000
FIG. 7
4.2%
2 7, 1 9 3
Potential increase in
revenue (£m) by industry,
after reaching full digital
capabilities.
25,000
20,000
15,000
3.2%
1.7%
4.2%
8,870
8,707
8,550
4.4%
2.4%
7, 6 1 6
7, 0 2 1
5,000
2.3%
1.6%
2,913
2 ,1 9 7
1.4%
1,212
INDUSTRY,
COUNTRY &
REGION ANALYSIS
10,000
1 7, 1 9 4
RESEARCH
METHODOLOGY
% increase from
current level
4.6%
UK’S DIGITAL
LEADERS SHOW
THE WAY
ED
U
E A CA
LT TI
H ON
C
A &
RE
H
O
RV TH
IC ER
ES
SE
T
IC
U OT
ST H
RI ER
ES
D
IN
FI
N
SE AN
RV C
IC IAL
TR
ES
A
N
SP
O
& R
ST TA
O TI
RA O
G N
E
0
PR
TE OF
C ES
H SI
SE ON
RV A
IC L &
ES
W
H
RE O
TA LE
I L SA
TR LE
A &
D
E
C
O
N
ST
RU
C
TI
O
N
M
A
N
U
FA
C
TU
RI
N
G
he Digital Opportunity is greatest for professional services
firms. We estimate that deploying full digital capabilities
could add £27 billion a year in industry revenues (a 4%
increase). The wholesale and retail sectors would benefit
by £17 billion (an increase of 5%), while manufacturing
and construction would see an almost £9 billion increase.
Financial services (4%) and transportation and storage
(4%) also show the potential for significant revenue gains
of between £8 billion and £9 billion a year ■
THE IMPACT OF
DIGITAL ON THE
UK ECONOMY
T
THE UK’S
£92BN DIGITAL
OPPORTUNITY
D I G I TA L O P P O R T U N I T I E S
ACROSS ALL INDUSTRIES
23
40,000
30,000
3 .1 %
20,000
19,524
3.6%
1.9%
1.4%
1.7%
3 .1 %
4,798
4,514
4,424
3,983
YO
R
H KS
U H
M IR
BE E
R
9,247
EN EA
G ST
LA O
N F
D
2.8%
1 0,719
SO
W UT
ES H
T
3 .1 %
11,558
10,000
1.5%
3,501
1.4%
0.9%
1,052
937
INDUSTRY,
COUNTRY &
REGION ANALYSIS
N
O
EA RTH
ST
O
R
IR TH
EL E
A RN
N
D
N
S
LE
W
A
L A EA
N ST
D
S
ID
M
&
L A WE
N ST
D
S
ID
M
D
N
A
TL
O
SC
N
O
W RT
ES H
T
SO
U
EA TH
ST
N
D
O
N
0
LO
48,544
RESEARCH
METHODOLOGY
% increase from
current level
3.6%
50,000
UK’S DIGITAL
LEADERS SHOW
THE WAY
Potential increase in
revenue (£m) by region,
after reaching full digital
capabilities.
THE IMPACT OF
DIGITAL ON THE
UK ECONOMY
FIG. 8
THE UK’S
£92BN DIGITAL
OPPORTUNITY
D I G I TA L O P P O R T U N I T I E S
ACROSS ALL REGIONS
24
SIDEBAR 2
Manufacturing
has changed rapidly as a result of
digital innovations (like “smart” inventory
tags, route optimisation, and the Internet
of Things). “We can check in
is also seen as crucial to our digital future.
New technology is rapidly transforming many
UK factories, with exciting innovations to
come. Many respondents (57%) are hoping
new technologies, like robotics and 3D
printing, will help them get the most from
digital. “Robotics is such a promising
“Big Data has made a revolutionary
change in the whole process of the
company – we are analysing things
much faster than previously. It helps
us penetrate new markets,” explains a
explains the CIO of a mid-sized
transportation and storage company,
based in the West Midlands. The industry
is focused on the need for improved
standards and for further development o
f industry ecosystems.
area – it increases our speed, quality,
and minimizes errors,” explains the
CIO of a mid-sized Manufacturer based in
Yorkshire and the Humber. Manufacturers
are also positive about the impact on jobs,
with over 60% expecting more and better
job prospects. About half call for improved
training to develop digital skills.
INDUSTRY,
COUNTRY &
REGION ANALYSIS
director of a boutique London-based financial
services firm. But half of the financial services
respondents raise concerns about the impact
of regulation and privacy and security
(far higher than the average of 37%), which
suggests a need for smarter supervision.
real time where our products are,
how they are doing, and
change anything if required,”
RESEARCH
METHODOLOGY
Transportation and storage
is highly dependent on data for its business.
Respondents are positive about the contribution
digital technologies offer, anticipating high
levels of digital content and more competition.
UK’S DIGITAL
LEADERS SHOW
THE WAY
The financial services industry
THE IMPACT OF
DIGITAL ON THE
UK ECONOMY
A SNAPSHOT OF THREE VERY DIFFERENT INDUSTRIES OFFERS INSIGHTS
I N T O H OW T H E U K E C O N O M Y I S B U I L D I N G I T S D I G I TA L S T R E N G T H ,
A N D I L L U S T R AT E S S O M E A R E A S T H AT D E M A N D G R E AT E R F O C U S .
THE UK’S
£92BN DIGITAL
OPPORTUNITY
A TA L E O F T H R E E I N D U S T R I E S
25
DIGITAL OPPORTUNITY TO BE GAINED IN LONDON.
3
See “Tech Britain 2015” at http://www.techcityuk.com/wp-content/uploads/2015/02/Tech%20Nation%202015.pdf
These innovative clusters are important not just for the
tech sector but for the regional economies as a whole.
“Several years ago we saw our role as supporting the
growth of a few tech firms,” notes David Dunn, CEO of
Sunderland Software City (see Case Study 1), a publicly
funded incubator set up to support software companies
in the North East. “Now we support the effective use of
technology across the region. We are working with local
leading companies to build the digital expertise they
need to win in global markets” ■
INDUSTRY,
COUNTRY &
REGION ANALYSIS
£48.5BN
“ I N N O VAT I V E D I G I TA L
C L U S T E R S A R E I M P O R TA N T
NOT JUST FOR THE TECH
SECTOR BUT FOR REGIONAL
ECONOMIES AS A WHOLE.”
RESEARCH
METHODOLOGY
In the North East, traditional manufacturers are investing
in the latest technologies (e.g. Nissan Motor UK);
service companies are adjusting their business models
(e.g. Sage’s extension of its Software as a Service
offering); and a number of new companies are emerging,
like Ubisoft Reflections and Visualsoft. This wide
dispersion of digital firms reinforces other research,
such as Tech Nation’s recent report on the UK’s digital
economy3, which documents the growth of clusters
of digital firms in towns and cities across the country,
and the advance of digital start-ups in Bournemouth and
Liverpool, where the rate of growth exceeds that of London.
UK’S DIGITAL
LEADERS SHOW
THE WAY
he largest Digital Opportunity, at £48.5 billion, is to
be gained in London. Based on a percentage gain on
existing revenues, the regions expected to gain the most
are London and Scotland, at 3.6%, closely followed by
Wales, the North West, and South East, at 3.1%. Across
the country, examples of regional digital adaption
are emerging. Companies in Scotland, for example,
want to carve out a niche for global growth industries
by providing key components for mobile phones and
electric cars, and by creating video games for the Grand
Theft Auto franchise.
THE IMPACT OF
DIGITAL ON THE
UK ECONOMY
T
THE UK’S
£92BN DIGITAL
OPPORTUNITY
L O N D O N M AY B E L E A D I N G ,
BUT OTHER REGIONS ARE CHASING
26
SCOTLAND
UK’S DIGITAL
LEADERS SHOW
THE WAY
RESEARCH
METHODOLOGY
INDUSTRY,
COUNTRY &
REGION ANALYSIS
(£48.5BN)
WALES,
NORTH WEST &
SOUTH EAST
THE IMPACT OF
DIGITAL ON THE
UK ECONOMY
LONDON
THE UK’S
£92BN DIGITAL
OPPORTUNITY
3.6%
3.1%
3.6%
R E G I O N A L D I G I TA L
O P P O R T U N I T Y,
% REVENUE INCREASE
27
CASE STUDY 1
SUNDERLAND SOF T WARE CIT Y (SSC):
INDUSTRY,
COUNTRY &
REGION ANALYSIS
Mr. Dunn sees this wider remit as a model that can be
extended to other regions: to concentrate on core areas of
expertise and use digital know-how to bring up the whole
Key to success is developing the local skills base.
SSC encourages people into tech careers by talking to
schools, colleges, and universities. People are joining code
clubs (up from 6 to 60 in the last 9 months) and a number of
other informal clubs that meet in pubs and cafes to discuss
technology. Companies in the region are taking advantage
of these skills, and Mr. Dunn believes that a growing
reputation for strong technical skills will attract more firms
to locate and invest in the North East. There needs to be
more shining examples, industry “rock stars”, to encourage
others, and corporate HR departments need to look outside
their normal hunting grounds (established universities) when
they search for qualified candidates ■
RESEARCH
METHODOLOGY
is a publicly funded body, receiving funds from local,
national, and EU bodies, with private sector guidance on
its management board. Seven years after opening, SSC
supports 1,600 software firms in the region. “We have gone on
a migration from the commercial creative sector to the tech
and digital sectors, and now to the B2B enterprise software
sector,” says Mr. Dunn. SSC now provides its services to all
industry verticals in the North East, and encourages more
effective use of data across the UK. “When I started here
I saw green shoots of new businesses,” he says, “now I am
seeing mighty tree trunks.”
regional economy. The North East is developing expertise
in particular areas, like auto manufacturing and data
sharing, where it stands to win business nationally and
internationally, as well as attract inward investment.
UK’S DIGITAL
LEADERS SHOW
THE WAY
SSC
And its role continues to grow. In November 2014,
The North East was awarded one of three regional
Digital Catapult Centres – an initiative funded by the
Government’s Digital Catapult program (part of the UK’s
Department for Business, Innovation & Skills), and operated
by SSC. It’s aimed at helping companies across the country
understand the value hidden in data and how that value
can be increased by sharing it with others. As a result,
Mr. Dunn spends more time talking with large established
companies in the region, like Nissan, HP, and Barclays,
as well as many public sector organisations. Established
companies get access to local specialist expertise to
transform their operations, and local software companies
get great business opportunities in niche verticals.
THE IMPACT OF
DIGITAL ON THE
UK ECONOMY
DAV I D D U N N , C E O O F S U N D E R L A N D S O F T WA R E C I T Y H A D H I S D O U B T S A B O U T H O W A P U B L I C LY
F U N D E D O R G A N I S A T I O N C O U L D D R I V E G R O W T H O F P R I V A T E S E C T O R F I R M S I N T H E N O R T H E A S T.
THE UK’S
£92BN DIGITAL
OPPORTUNITY
FROM GREEN SHOOTS TO
TREE TRUNKS IN THE NORTH EAST
28
Adizah Tejani, Head of Ecosystem Development at
Level39, a private sector incubator, agrees that national
collaboration is the way forward (see Case Study 2).
“London is a centre of global business,” she says, “but
it needs to work effectively with companies across
the UK, to exchange ideas and be open for business.”
This collaborative network will not happen by chance.
“The key is to encourage the right connections” ■
UK’S DIGITAL
LEADERS SHOW
THE WAY
INDUSTRY,
COUNTRY &
REGION ANALYSIS
“LONDON NEEDS TO
W O R K E F F E C T I V E LY
W I T H C O M PA N I E S AC R O S S
THE UK, TO EXCHANGE
IDEAS AND BE OPEN
FOR BUSINESS.”
ADIZAH TEJANI,
HEAD OF ECOSYSTEM
D E V E L O P M E N T, L E V E L 3 9
RESEARCH
METHODOLOGY
uccessful clusters provide lessons for others trying to
energise their own region, and mutually supportive
ecosystems can be developed from suppliers and
partners in both the public and private sectors. For the
UK economy to thrive it needs to encourage the growth
of these regional clusters. According to David Dunn,
the North East’s experience shows that regions will
benefit most by building a core expertise, which they can
then offer to the rest of the UK as well as export, rather
than competing against each other for a limited pool of
inward investment.
THE IMPACT OF
DIGITAL ON THE
UK ECONOMY
S
THE UK’S
£92BN DIGITAL
OPPORTUNITY
ENCOURAGING THE GROW TH
OF REGIONAL CLUSTERS
29
Strength of digital capabilities by company size.
How advanced is your company in using the
following digital capabilities? The graph shows the
% of respondents who say they have “Strong”
or “Very Strong” capabilities.
80%
n total
n under £2 million
annual revenues
(or turnover)
£2 million - £1 billion
n
n £1 billion or more
73%
60%
57%
40%
52%
55%
55%
51%
56%
46%
46%
44%
55%
53%
52%
39%
36%
36%
39%
41%
INDUSTRY,
COUNTRY &
REGION ANALYSIS
26%
20%
RESEARCH
METHODOLOGY
56%
52%
64%
61%
58%
UK’S DIGITAL
LEADERS SHOW
THE WAY
EN C
G US DIG
A T I
G O T
EM M AL
EN ER
T
O
L
PA L A
RT BO OP
N RA EN
ER T
&
SH IVE
IP
C
IT
A
L
LE ST
A RA
D
ER TE
SH GY
IP
IG
D
&
RM DIG
AT IT
IO AL
N
IN
FO
RK DIG
FO IT
RC AL
E
O
W
FR TE
A CH
ST N
RU O
C LO
TU G
RE Y
0
IN
aving broadened our definition of digital beyond just tech
firms, to include all companies that gain a commercial
benefit from digital technology, we found that large
companies are leading the field. And smaller firms are
struggling to invest sufficiently in order to upgrade the
six core digital capabilities we described earlier. Large
firms have access to the resources they need to invest
in the latest digital capabilities. They often have teams
dedicated to looking at future trends, and are able to
offer attractive pay, working conditions, and prestige in
order to attract top talent.
FIG. 9
THE IMPACT OF
DIGITAL ON THE
UK ECONOMY
H
THE UK’S
£92BN DIGITAL
OPPORTUNITY
T H E A DVA N TAG E S
OF SCALE
30
DIGITAL OPPORTUNITY FOR
SMALL & MEDIUM-SIZED ENTERPRISES.
(SMEs)
INDUSTRY,
COUNTRY &
REGION ANALYSIS
£56BN
RESEARCH
METHODOLOGY
We estimate that across the economy, the Digital
Opportunity for SMEs is £56 billion. Though they currently
have weaker digital capabilities than larger companies,
they are in a strong position to catch up. And they seem
to be serious about building up their digital capabilities.
For example, they report that they are planning to employ
more staff with digital skills, and increasing employment
over the next two years by 6% – three times the rate of
larger companies.
Firms that are in the middle, neither large nor small, may
face the greatest difficulties. They are at a scale where
they need to invest in digital, but they may lack the
time, resources, supportive management, and in-house
expertise to do so. The support networks available to
SMEs based at hubs, such as Level39 (see Case Study 2)
and the Government’s Catapult Centres (see page 28),
are also less accessible to larger firms ■
“LARGE FIRMS ARE
OFTEN BETTER RESOURCED
T O I N V E S T I N D I G I TA L
I N I T I AT I V E S . S M E S CA N
BENEFIT FROM THE
L AT E S T T E C H N O LO G I E S .
M I D - S I Z E D F I R M S M AY
FIND IT HARDEST TO
A D A P T. ”
UK’S DIGITAL
LEADERS SHOW
THE WAY
Small and medium-sized enterprises (SMEs), firms with
fewer than 250 employees, have most to gain from
investing in digital technologies.
“The next wave, the build-out of the Internet of
Things, won’t happen in the same way as the mobile
revolution – it will be more down to SMEs and start-ups
rather than corporates,” observes Mr. Clarke of Ocado.
“It’s important that we develop the ecosystems that
will help them flourish.”
THE IMPACT OF
DIGITAL ON THE
UK ECONOMY
Our survey shows that large firms (those with annual
turnover of more than £1 billion) tend to view their digital
opportunities very positively, and consider themselves
to be significantly stronger than others across a number
of capabilities, especially technology infrastructure
and digital information – areas that require significant
investment.
[CONTINUED]
THE UK’S
£92BN DIGITAL
OPPORTUNITY
T H E A DVA N TAG E S O F S CA L E
31
CASE STUDY 2
LEVEL39:
But there is no single way to succeed as a digital startup. Every business faces a distinct context and special
challenges. And finding the right networks and experts
to connect with is one of the hardest things to get right.
Level39 can help people make the right connections,
While there are great examples of thriving clusters across
the country, a cluster can’t be created by force. Many
different things are necessary – access to skills, finance,
infrastructure and a knowledge base. It ultimately comes
down to people and a positive, entrepreneurial culture ■
INDUSTRY,
COUNTRY &
REGION ANALYSIS
As companies grow, they face different challenges and
need different skills – like business management, where
needs can change dramatically between the start-up
phase and an established business. This problem of
scaling up is one of the biggest challenges facing new,
fast-growing digital companies. Ms. Tejani works closely
with a number of organisations that encourage clusters
such as Innovate Finance and Tech City UK.
RESEARCH
METHODOLOGY
evel39, Europe’s largest incubator of technology firms in
finance, retail, cybersecurity and future cities sectors,
helps new digital companies get off the ground. It provides
the right innovative and collaborative environment and
provides access to specialist expertise where needed.
Adizah Tejani, Level39’s Head of Ecosystem Development,
likes to bring resident companies together in an informal
setting to share experiences with their peers. It creates
what Ms. Tejani calls “organised serendipity” – helping
atoms collide in order to set off positive reactions. She
plays a similar role as a guide for start-ups and early-stage
The company has seen increased start-up activity from its
base at Canary Wharf in London and across the country.
The growth has been particularly notable as all industries
have recently begun to realise they are being disrupted
by technology and need to do something about it.
“It’s certainly no longer just a tech phenomenon,” notes
Ms. Tejani. “We are seeing more and more new companies
applying innovative technologies, like data analytics,
to tackle a wide range of industry challenges.”
UK’S DIGITAL
LEADERS SHOW
THE WAY
L
build bridges, communicate, and connect to sources of
finance, talent from local universities and established
business advisers.
THE IMPACT OF
DIGITAL ON THE
UK ECONOMY
companies looking to make the most of the opportunities
presented by digital technologies.
THE UK’S
£92BN DIGITAL
OPPORTUNITY
ENCOURAGING BUSINESS
GROWTH THROUGH
‘ORGANISED SERENDIPITY’
32
30%
20%
20%
10%
10%
0
0
46% 45%
35% 34%
G
O
G VE
U RN
ID
SU AN ME
PP CE NT
FE
O &
W
RT
ER
O R
N E
IM ST
W FO M R
IT R IG IC
H W R TI
O
K
EY OR ATI N
S
SK KE ON
R
IL S
LS
37%
SM
L A AR
TI TE
O R
N
30%
U
40%
G
40%
RE
n solution that would
51%
BE
O T TE
F
D RE
I
IN GIT DU
U S C A L CA
N H S TI
IV O K O
ER O IL N
SI LS LS
TI &
ES
LE
FR
SS
&
O
R
I
M N E
G TE GU
O R L
VE FE A
RN RE TIO
M NC N
EN E
T
54%
ST IN BE
A DU T
T
N
D ST ER
A R
RD Y
S
59%
INDUSTRY,
COUNTRY &
REGION ANALYSIS
TT
ER
SO T DIG
LU O O I T
TI LS AL
O &
N
S
52%
BE
59%
49%
41%
46%
32%
RESEARCH
METHODOLOGY
O
R
BR E R FAS
O EL TE
A IA R
D
BA B L &
N E
D
place in three years
M
n likelihood of being in
60%
66%
60%
57%
50%
53%
UK’S DIGITAL
LEADERS SHOW
THE WAY
help overcome
obstacles
50%
A DIG
N
D ITA CH
SO L E
L U TO A P
TI O ER
O LS
N
S
What solutions would help
you and other companies
overcome the obstacles
you face?
70%
THE IMPACT OF
DIGITAL ON THE
UK ECONOMY
FIG. 10
THE UK’S
£92BN DIGITAL
OPPORTUNITY
PREFERRED SOLUTIONS TO HELP
B U I L D D I G I TA L CA PA B I L I T Y A N D
LIKELIHOOD IN NEXT THREE YEARS
70%
28%
33
1: PROMOTE the availability and roll-out of better
technical solutions – for example, accelerate the
widespread availability of ultrafast broadband and
support the development of key technical standards.
2: ADAPT education policies to meet the changing
demand for skills – technical capabilities as well as
broader business proficiencies – to wrestle the most
from digital technologies.
3: SUPPORT the infrastructure and ecosystems that can
best help businesses innovate and thrive: progressive
universities, colleges and other public and private sector
institutions keen to collaborate with industry.
4: ENCOURAGE regions to develop areas
of expertise, so that they can support the
development of their local economy as well as
become leaders in global markets. They’ll benefit
most through collaborating with other parts of
the UK, rather than competing for the same
limited pool of funds.
5: PROVIDE better guidance (via the
government-funded Catapult Centres,
for example) to the SMEs that are key to
seizing the Digital Opportunity.
INDUSTRY,
COUNTRY &
REGION ANALYSIS
As technologies mature and global markets become more
open to trade in digital services, a £92 billion opportunity
exists for companies to establish themselves both at
home and abroad. “People in the UK can tend to be a bit
parochial,” says SSC’s Mr. Dunn. ”Sometimes they need a
little push to think more internationally to make the most
of their great products and services” ■
5 W AY S T O S U P P O R T F I R M S :
RESEARCH
METHODOLOGY
ur respondents expect to have increased demand for
staff with digital skills. Almost half of respondents (46%)
would like to see a better standard of education in these
areas in schools and universities. Most respondents do
not want to see unnecessary government interference.
Solutions involving active government support (industry
standards, smarter regulation, and government guidance
and support) tend to score lowest among those offered,
though these scores vary significantly by industry.
UK’S DIGITAL
LEADERS SHOW
THE WAY
O
THE IMPACT OF
DIGITAL ON THE
UK ECONOMY
T H E S O L U T I O N S T H AT C O M PA N I E S M O S T WA N T T O H E L P T H E M A DVA N C E
A R E C H E A P E R T E C H N O L O G Y, A N D F A S T E R , M O R E R E L I A B L E B R O A D B A N D .
THE UK’S
£92BN DIGITAL
OPPORTUNITY
T H E D I G I TA L O P P O R T U N I T Y
34
3
U K ’ S D I G I TA L
LEADERS SHOW
T H E WAY
“ I F YO U H AV E G O O D P E O P L E W H O
DO GOOD THINGS, AND PEOPLE ARE
S AY I N G G O O D T H I N G S A B O U T YO U –
YO U ’ R E G O I N G T O AT T R AC T M O R E
GOOD PEOPLE, YOU’RE GOING TO
R E TA I N P E O P L E . ”
T O M C H AT F I E L D, C O M M E N TAT O R & A U T H O R
5
The online grocer Ocado, for example, has a very different
business model from its competitors (see Case Study 3).
Since it does not have stores, the way it uses its
technology is particularly important to differentiate itself
and gain a competitive edge. “Technology is infused
into all we do, it’s key to how we operate and where we
see our competitive advantage – from end to end,” says
Chief Technology Officer, Paul Clarke ■
INDUSTRY,
COUNTRY &
REGION ANALYSIS
4
New firms are being born digital, in the sense that they
produce and deliver their products and services entirely
in digital form. A larger group applies digital technologies
to enhance their products, services, and operations. They
do this by introducing new digital services to supplement
their existing products. For these companies, the digital
transformation will prove more challenging. They will
need to adapt their existing ways of working, even as they
face the challenges of competing with new entrants.
RESEARCH
METHODOLOGY
Such innovations offer huge opportunities for companies
to develop new ways of working, and firms that are
adapting quickly and investing wisely are leading the way
with digital. Technological innovation is rushing ahead:
new competitors are emerging and industry structures are
rapidly evolving. Companies have to be ready to respond.
Firms are adapting in their own ways to get the most out
of the Digital Opportunity. Some businesses are moving
from physical products to digital services. Others
are applying sophisticated digital technologies and
techniques to develop new solutions and business
models; engaging with their customers in new ways, or
transforming the efficiency of their operations. In several
of these areas, some firms are global leaders:
BP, for instance, uses the world’s largest commercial
computer centre (based in the US) to process seismic
data in order to image deep rock formations and
understand what they might contain4. Many of the
world’s leading tech companies are based here in the UK,
using sophisticated data analytics tools5.
UK’S DIGITAL
LEADERS SHOW
THE WAY
he widespread introduction of inexpensive computing power,
the rapid growth of the Internet, cloud computing, social
media, mobile computing, and now the Internet of Things,
have changed the rules for doing business in all industries.
THE IMPACT OF
DIGITAL ON THE
UK ECONOMY
T
“THERE ARE MANY
DIFFERENT MODELS OF
D I G I TA L S U C C E S S A N D
N E W T Y P E S O F C O M PA N Y
E M E R G I N G . U K C O M PA N I E S
A R E L E A D I N G G L O B A L LY
IN SOME AREAS.”
THE UK’S
£92BN DIGITAL
OPPORTUNITY
U K ’ S D I G I TA L L E A D E R S
S H O W T H E W AY
Number crunching with Big Data, BP website at http://www.bp.com/en/global/corporate/press/bp-magazine/innovations/number-crunching-with-big-data.htm
S
ee FinTech Futures The UK as a World Leader in Financial Technologies A report by the UK Government Chief Scientific Adviser, March 2015 at
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/413095/gs-15-3-fintech-futures.pdf
36
CASE STUDY 3
OCADO:
INDUSTRY,
COUNTRY &
REGION ANALYSIS
e were born digital,” explains Paul Clarke, Ocado’s
Chief Technology Officer. “It’s part of our DNA.”
Founded 15 years ago, Ocado is now a growing and
profitable retailer with close to £1 billion annual revenues
and 500,000 active customers. At a time when intense
competition in the grocery sector is putting pressure on
margins, Ocado is one of a very few firms on a growth
path, increasing sales by over 20% in 2014 and profit by
over 50%. And unlike some of their competitors, Ocado
is not relying on a price discounting strategy but looking
to innovate via technology in order to grow the business.
This technology-infused business model provides a
number of benefits over the competition’s bricks-andmortar operations. For one, Ocado has a lower and
more flexible cost base. Mr. Clarke also sees technology
as a key asset that can help the company grow in new
areas. With an established online link to customers,
Ocado is looking to develop other retail segments like
the online pet supplies it launched in 2014. Last year the
company helped rival grocer Morrisons launch an online
shopping operation. Expanding on this venture, Ocado is
now developing new hardware and software platforms
(the Ocado Smart Platform) to put large bricks-andmortar grocery retailers around the world online, using its
disruptive business model ■
RESEARCH
METHODOLOGY
“W
Software, developed in-house, is a key differentiator.
It provides a front end for the customer, with clever
features like a suggested shopping basket based on
previous orders. Customer orders are checked against
stock levels that are constantly updated, minimising the
need to offer substitutes. They can also book a delivery for
a one-hour time slot, making changes until just a few hours
before delivery. Increasingly, these are features that online
retail customers take for granted. What the customer
doesn’t see are the mathematical process models,
forecasting engines, visualisations, remote telemetry,
Big Data, and the simulation that makes it all possible.
Ocado also makes extensive use of the Internet of Things
UK’S DIGITAL
LEADERS SHOW
THE WAY
Ocado does not consider itself as just a retailer but both a
retailer and a tech company. The retail and tech functions
support one another: constant feedback from retail
operations helps improve the company’s technical solutions.
to improve its logistics and supply chains. For example,
food can be ordered from suppliers at the latest moment
and tracked throughout the supply chain, then stored
at the optimal temperature in warehouses and delivery
vans, thereby reducing waste and extending shelf life.
Information on storage times is then shared on customers’
receipts. Technology also optimises delivery routes from
centralised warehouses, which are becoming increasingly
sophisticated, automated, and highly connected.
THE IMPACT OF
DIGITAL ON THE
UK ECONOMY
T H E W O R L D ’ S L A R G E S T P U R E P L AY O N L I N E G R O C E R
S H OW S H OW D I G I TA L E N T E R P R I S E S CA N O U T M A N O E U V R E
A N D O U T P E R F O R M R I VA L S E N C U M B E R E D B Y
LEGACY INFRASTRUCTURE.
THE UK’S
£92BN DIGITAL
OPPORTUNITY
D I G I TA L I S PA R T O F T H E D N A
37
OF DIGITAL LEADERS CONSIDER
THE SIX DIGITAL CAPABILITIES AS
IMPORTANT OR VERY IMPORTANT.
They are also impatient and want to push on, confident
that constraints can be overcome. The composition of this
group of leaders demonstrates that digital innovations
affect all industries, regions, and firms of all sizes
(see Fig. 11 & 12) ■
D I G I TA L L E A D E R S A R E :
More profitable
(with an 8% profit margin, vs. 6% for the rest)
Faster growing
(revenue growth of 4.8%, vs. 3.9%)
More positive
about the impact of digital on their industry. (81%
expect it will lead to more and better jobs, vs. 51%)
More confident
about their ability to compete. (76% say they
are quick to adapt to change, vs. 53%)
INDUSTRY,
COUNTRY &
REGION ANALYSIS
95%
Becoming a digital leader is about far more than technology.
It’s about understanding how new technologies can be
applied for maximum commercial advantage, and being
able to make the changes needed to a company so that it
can operate in new ways. From our survey responses we
identified an elite group – those that were above average
on all six of our digital capabilities and excelled in at least
two of them.
RESEARCH
METHODOLOGY
e’ve been able to identify a leading group of firms that
deploy digital capabilities to give themselves commercial
advantage over their peers. They are seeing improved
financial performance as a result. We looked at what
they were doing differently in order to identify the specific
actions that companies can take to help the economy
better achieve its full digital potential.
UK’S DIGITAL
LEADERS SHOW
THE WAY
W
THE IMPACT OF
DIGITAL ON THE
UK ECONOMY
D I G I TA L L E A D E R S P R I O R I T I S E A L L D I G I TA L CA PA B I L I T I E S – M O R E T H A N 9 5 %
C O N S I D E R A L L S I X I M P O R T A N T O R V E R Y I M P O R T A N T, W H I L E J U S T 5 0 % – 6 0 %
O F O T H E R F I R M S R A N K T H E M S O H I G H L Y.
THE UK’S
£92BN DIGITAL
OPPORTUNITY
D E F I N I N G D I G I TA L L E A D E R S
38
FIG. 11
30%
What is the principle
sector your company
operates in?
26%
19%
19%
19%
18%
15%
13%
RESEARCH
METHODOLOGY
Digital leaders as a
% of sector total
20%
UK’S DIGITAL
LEADERS SHOW
THE WAY
12%
9%
7%
INDUSTRY,
COUNTRY &
REGION ANALYSIS
10%
ED
U
E A CA
LT TI
H ON
C
A &
RE
W
RE HO
TA LE
I L SA
TR LE
A &
D
E
H
O
RV TH
IC ER
ES
U OT
ST H
RI ER
ES
D
IN
N
RU
C
A
TR
ST
N
O
C
SE
TI
O
N
SP
O
& R
ST TA
O TI
RA O
PR
G N
E
O
TE F
E
C S
H SI
O
SE N
RV A
IC L &
ES
G
N
RI
TU
FA
C
U
N
A
M
T
FI
N
SE AN
RV C
IC IAL
ES
0
IC
igital Leaders can be found in all sectors, though
the technology sector has the greatest share
(a quarter), compared with almost a fifth of financial
services, manufacturing, construction, transportation
and storage, or professional services companies. Leaders
are also well represented across regions (we suspect that
the scores in the North East and Northern Ireland are a
result of their low sample count), with the largest share
located in the East Midlands ■
THE IMPACT OF
DIGITAL ON THE
UK ECONOMY
D
THE UK’S
£92BN DIGITAL
OPPORTUNITY
D I G I TA L L E A D E R S
– BY INDUSTRY
39
30%
UK’S DIGITAL
LEADERS SHOW
THE WAY
In which region of the UK
are your headquarters
located?
24%
20%
RESEARCH
METHODOLOGY
Digital leaders as a
% of region total
THE IMPACT OF
DIGITAL ON THE
UK ECONOMY
FIG. 12
THE UK’S
£92BN DIGITAL
OPPORTUNITY
D I G I TA L L E A D E R S
– BY REGION
18%
17%
16%
16%
16%
13%
10%
12%
12%
7%
0%
0%
INDUSTRY,
COUNTRY &
REGION ANALYSIS
O
R
IR TH
EL E
A RN
N
D
N
N
O
EA RTH
ST
SO
W UT
ES H
T
S
LE
W
A
EN EA
G ST
LA O
N F
D
D
N
A
TL
O
SC
YO
R
H KS
U H
M IR
BE E
R
&
L A WE
N ST
D
S
ID
M
SO
U
EA TH
ST
N
O
W RT
ES H
T
N
O
D
N
LO
ID
L A EA
N ST
D
S
0
M
40
CASE STUDY 4
T O M C H AT F I E L D (C O M M E N TAT O R A N D A U T H O R ) :
INDUSTRY,
COUNTRY &
REGION ANALYSIS
These effects demonstrate how leaders can use digital
technologies to consolidate their position. Through
constantly explaining the value they are generating
and being responsive to their customers, they can draw
more customers toward them and develop the scale
and expertise to give them a conclusive advantage over
competitors. Dr. Chatfield is very confident about the
UK economy’s growth prospects. The UK is strong in
many information-rich industries, like media, marketing,
financial services, security, and risk management.
Understanding and getting real value from information,
he says, will be critical in the years ahead. It also has
strength in “soft powers” – with an excellent reputation
in education, the advantage of the English language,
great media content, established international networks,
and a strong academic and learning culture. “We should
make much more of our advantages,” concludes Dr.
Chatfield, “and we should not just look to start-ups.
Strong incumbent institutions like the BBC and leading
universities also have an opportunity to exploit their
considerable strengths, redefining their role for the
information age” ■
RESEARCH
METHODOLOGY
Leading digital companies can also have a magnetic pull,
because of reputational dynamics. Put simply, “if you
have good people who do good things, and people are
saying good things about you – you’re going to attract
more good people, you’re going to retain people,” he says.
“Customers, employees, and business partners will be
drawn toward you.” While this has always been the case
to some extent, digital technology amplifies the effect
considerably because performance is so transparent and
widely shared. But “it’s a double-edged sword,” explains
Dr. Chatfield: “If something goes wrong, or you are just
not keeping up with the rest, bad performance also gets
amplified. How you get out of that is a tough one.”
UK’S DIGITAL
LEADERS SHOW
THE WAY
om Chatfield is a commentator on digital affairs and
culture, and the author of six books on the subject,
including How to Thrive in the Digital Age. He is
particularly interested in how digital technology can be
used successfully. “Digital technology creates network
effects that can hugely amplify performance,” he says.
Online networks generate vast amounts of information
for consumers and provide greater transparency about
products, services, and company performance. This
gives consumers increased power, as they use reviews,
rankings, and social media to move with like-minded
people to something that best serves their purpose. In this
way, consumers gravitate to hubs – particular companies
or organisations that are excellent at meeting their needs.
THE IMPACT OF
DIGITAL ON THE
UK ECONOMY
T
“IF SOMETHING GOES
WRONG, OR YOU ARE JUST
NOT KEEPING UP WITH THE
R E S T, B A D P E R F O R M A N C E
ALSO GE TS AMPLIFIED.
HOW YOU GE T OU T OF
T H AT I S A T O U G H O N E . ”
THE UK’S
£92BN DIGITAL
OPPORTUNITY
DEVELOPING AN EDGE IN
T H E D I G I TA L E C O N O M Y
41
THE UK’S
£92BN DIGITAL
OPPORTUNITY
D I G I TA L I N
THE WORKPLACE
65%
USE CLOUD SERVICES
% scores represent respondents who said they had “strong” or “very strong” capabilities in these areas.
47%
ARE PARTNERING WITH
DIGITAL SPECIALISTS
INDUSTRY,
COUNTRY &
REGION ANALYSIS
USE DIGITAL TO IMPROVE
COLLABORATION ACROSS
THEIR ORGANISATION
ARE USING CUSTOMER
FEEDBACK TO
IMPROVE SERVICE
RESEARCH
METHODOLOGY
60%
54%
UK’S DIGITAL
LEADERS SHOW
THE WAY
HAVE FAST OR RELIABLE
COMMUNICATIONS
THE IMPACT OF
DIGITAL ON THE
UK ECONOMY
63%
42
100%
96%
98%
98%
96%
95%
98%
80%
55%
55%
LE ST DI
A RA GI
D T TA
ER EG L
SH Y/
IP
RM DIG
AT IT
IO AL
N
51%
50%
59%
53%
40%
ST
RU
C TEC
TU H
RE
RK DIG
FO IT
RC AL
E
O
IN
FR
A
W
IN
FO
0
C
O
PA LL A
RT BO
N R OP
ER A E
SH TIV N
IP E
S
n Digital leaders
n All others
20%
EN C
G US DIG
A T I
G O T
EM M AL
EN ER
T
Prioritisation of digital
capabilities today
INDUSTRY,
COUNTRY &
REGION ANALYSIS
FIG. 13
RESEARCH
METHODOLOGY
60%
UK’S DIGITAL
LEADERS SHOW
THE WAY
igital leaders prioritise their investments in all digital
capabilities to a significantly greater extent than other
firms (see Fig. 13), with more than 95% of leaders
rating each of the six capabilities as important or very
important, as opposed to 50%–60% for other firms. These
leading firms also recognise all six of the capabilities
almost equally. They invest no more than their peers in
IT, they just invest it more wisely. And they obtain more
commercial benefit from having invested ■
THE IMPACT OF
DIGITAL ON THE
UK ECONOMY
D
THE UK’S
£92BN DIGITAL
OPPORTUNITY
D I G I TA L L E A D E R S ’ P R I O R I T I S AT I O N
O F D I G I TA L CA PA B I L I T I E S
43
62%
R
C EA
U C
S H
M TO N
A M EW
RK E
ET RS
S
62%
D
93%
N
89%
A
43%
57%
TA SA
I TI
C N E SF
U X Y
ST IS A
O TI ND
M N
ER G
S
60%
RE
20%
93%
IM
P
E
YO XP QU RO
E
U RI AL VE
R E IT T
O PR NC Y HE
R O E O
SE D O R
RV UC F
IC T
E
56%
P E SA
RA VE
C TIN ON
O
ST G
S
58%
O
91%
25%
INDUSTRY,
COUNTRY &
REGION ANALYSIS
S
SP AN AV
IN ON D IM E C
TH SI P OS
E VE RO TS
SU N V
E E
C PP SS
H L
A Y
IN
I
EV MP
ID RO
M F EN VE
A OR C Y
N
E O
D AG TAK BA UR
EC EM I S
IS E NG E
IO N
N T
S
40%
RE
87%
93%
92%
60%
48%
RESEARCH
METHODOLOGY
O HA C
R P R
W E E PIE EA
O N R TE
RK G A A
FO AG ND
RC ED
E
RE
SP
O
A N
TO N D Q
D
C FL UI
H E C
BU AN XI KLY
D S G BL
EM IN IN Y
A ES G
N S
D
S
80%
UK’S DIGITAL
LEADERS SHOW
THE WAY
n Digital leaders
n All others
M
What outcomes do you
see from your digital
capabilities?
THE IMPACT OF
DIGITAL ON THE
UK ECONOMY
FIG. 14
THE UK’S
£92BN DIGITAL
OPPORTUNITY
D I G I TA L L E A D E R S ’ E X P E C T E D
B E N E F I T S O F D I G I TA L CA PA B I L I T I E S
100%
0
44
FIG. 15
Impact of digital
capabilities on revenues
and costs
3.9%
BY HOW MUCH DO
DIGITAL CAPABILITIES
BOOST REVENUES?
5.3%
4 .1 %
INDUSTRY,
COUNTRY &
REGION ANALYSIS
BY HOW MUCH DO
DIGITAL CAPABILITIES
REDUCE COSTS?
5.5%
41%
0%
RESEARCH
METHODOLOGY
n Digital leaders
n All others
UK’S DIGITAL
LEADERS SHOW
THE WAY
eaders invest in digital capabilities because they
recognise the wide range of benefits it can bring –
increased access to customers, an improved customer
experience, better data for decision-making, increased
flexibility to respond to changing demands, a more
efficient and responsive supply chain, and more satisfied
employees. They also report improved financial
performance as a result of their digital investments –
a 5.3% improvement in revenues and a 5.5% reduction in
costs, both over 30% better than other firms ■
THE IMPACT OF
DIGITAL ON THE
UK ECONOMY
L
THE UK’S
£92BN DIGITAL
OPPORTUNITY
D I G I TA L L E A D E R S ’
PERFORMANCE PREMIUM
1%
2%
3%
4%
5%
6%
45
HELPING UK FIRMS
B E C O M E D I G I TA L
LEADERS
n Today
n In three years
n Strength of
What level of priority
does your leadership team
give to the following six
digital capabilities?
each capability
THE IMPACT OF
DIGITAL ON THE
UK ECONOMY
80%
7 8%
7 7%
7 3%
7 1%
60%
UK’S DIGITAL
LEADERS SHOW
THE WAY
7 2%
65%
62 %
60%
62 %
56%
5 5%
5 8%
57% 57%
5 3%
51%
4 4%
40%
39%
RESEARCH
METHODOLOGY
INDUSTRY,
COUNTRY &
REGION ANALYSIS
20%
EN C
G US DIG
A T I
G O T
EM M AL
EN ER
T
O
L
PA L A
RT BO OP
N RA EN
ER T
&
SH IVE
IP
C
IT
A
L
LE ST
A RA
D
ER TE
SH GY
IP
IG
D
&
RM DIG
AT IT
IO AL
N
IN
FO
RK DIG
FO IT
RC AL
E
O
W
FR TE
A CH
ST N
RU O
C LO
TU G
RE Y
0
IN
more granular analysis offers additional insights into
the progress firms are making to respond to the digital
challenge – and indicates what other companies can do to
catch up. Our survey shows that large gaps exist between
firms’ assessments of their current strengths and their
view of the importance of digital capabilities (see Fig. 16).
Across our research, the greatest gap between a
company’s digital priorities and current capabilities is
in technology infrastructure (a 21-point disparity), with
open and collaborative partnerships second (18 points).
Looking ahead three years, digital information becomes
the highest priority capability, while technology
infrastructure remains the greatest disparity to current
strength (33 points) ■
Strength of digital capability
vs. leadership prioritisation
now and in three years.
THE UK’S
£92BN DIGITAL
OPPORTUNITY
A
FIG. 16
46
When we review the survey results by individual industry
sectors, we find that each specific industry offers a distinctly
different assessment of its digital capabilities. These
include current strengths and weaknesses, current and
future prioritisation, and the commercial benefits available
By contrast, manufacturing firms rate digital workforce
capabilities and open and collaborative partnerships
more highly than companies in other sectors. Among
all firms, financial constraints are cited as the biggest
obstacles to making progress. Greater access to funds,
highlighted by half of respondents, is only part of the
solution. The bigger problem is being unable to present a
strong enough business case to gain investment, as many
believe the return on investment of digital investments is
difficult to quantify.
INDUSTRY,
COUNTRY &
REGION ANALYSIS
C O M PA N I E S N E E D TO A S S E S S
T H E I R OW N D I G I TA L P R I O R I T I E S ,
PRESENT A STRONG BUSINESS
CASE, AND BE RESPONSIVE TO
CONTINUOUS CHANGE.
through digital investments. Financial services companies
emphasise the importance of investing in their technological
infrastructure and highlight the importance of improving
their digital customer engagement. Transportation and
storage firms highlight these two capabilities even more
strongly, yet also emphasise the need for digital strategy
and leadership.
RESEARCH
METHODOLOGY
Firms feel confident they can provide the necessary
equipment and environment for their digital workforce,
but report difficulties in offering the necessary pay
and career development opportunities for key staff.
And when it comes to both developing digital strategy
leadership and enhancing digital customer engagement,
the capability strength scores are bunched around the
middle. This suggests that progress has been made, but
there remains good scope for improvement. For open and
collaborative partnerships, the scores are all noticeably
lower, with no scores over 50%, showing that this is the
least developed of the six digital capabilities.
UK’S DIGITAL
LEADERS SHOW
THE WAY
n Chart 1 we provide more detail on firms’
strengths and weaknesses against each of the
six capabilities. It shows the three or four highest
and lowest scores against each capability, and a
couple of actions on each that could help firms keen
to improve. For technology infrastructure, many
companies have built solid foundational capabilities
(via the use of broadband, cloud, and collaborative
tools for example). Yet more advanced technologies
(like predictive analytics and the Internet of Things)
are still in early stages.
THE IMPACT OF
DIGITAL ON THE
UK ECONOMY
I
THE UK’S
£92BN DIGITAL
OPPORTUNITY
STRENGTHS AND PRIORITIES
FOR DEVELOPMENT
47
• C
onsider the Digital Opportunity. Can you reach
out to new markets, change your business model,
improve your product and the customer experience,
get greater value from information, and implement
new ways of working?
• E
stimate the investment needed in digital
capabilities, recognising that you not only need to
deploy the best technology, but also develop the
broader business capabilities to get the most out
of the investment.
• A
ssess and progress. You need to be aware of new
opportunities and adapt quickly when needed.
Even digital leaders will need to work hard to stay
ahead of potential competitors.
This survey has highlighted the encouraging progress
and positive attitudes companies bring to the digital
disruption that is all around them. The revolution in digital
is still at an early stage, and we can expect much more
technological innovation and industry disruption ahead.
With digital technology opening up markets around the
world, as well as making UK markets more accessible
to overseas competitors, it is critical that companies
build their digital strength and adaptability so they can
establish themselves as digital leaders in their industries,
and secure their share of the Digital Opportunity ■
INDUSTRY,
COUNTRY &
REGION ANALYSIS
• Develop a convincing business case, including
appropriate metrics, based on an appreciation of
the benefits that digital capabilities can generate.
A well-developed business plan will help to both
secure funds and ensure management is focused
on getting the most out of digital.
• M
ove towards more flexible ways of working and
building responsive organisational structures, with
a commitment to develop a culture receptive to
learning and change.
RESEARCH
METHODOLOGY
Above all, companies need to make sure they don’t fall
behind. This is a fear expressed by many of our survey
respondents. Based on the wealth of data provided by
digital leaders, and all survey respondents, we recommend
some first steps management teams can employ to stay
ahead of the curve.
• U
nderstand how your industry is being affected by
digital technologies, not only the moves of known
competitors but also those of agile new entrants.
UK’S DIGITAL
LEADERS SHOW
THE WAY
As one respondent concluded, “It’s hard to get it right
first time – and just when you have it working, everything
changes again. The skills needed for automating
processes aren’t the same as those needed for putting
businesses on the web, which likewise is different from
those needed to make mobile business effective. It takes
real investment of will to wear all these different hats
simultaneously.”
S TAY I N G A H E A D O F T H E C U R V E :
THE IMPACT OF
DIGITAL ON THE
UK ECONOMY
Several respondents explained how they have improved
their performance measurements to help justify digital
investments. In the longer term, respondents seem
confident that cheaper and better digital products
will make it easier to put forward the case to invest.
Implementing digital changes can be complex, particularly
if they involve structural changes like developing new
roles or recomposing the corporate culture.
[CONTINUED]
THE UK’S
£92BN DIGITAL
OPPORTUNITY
STRENGTHS AND PRIORITIES FOR DEVELOPMENT
48
CHART 1
• Cloud services (65%)
TECHNOLOGY
INFRASTRUCTURE
• Fast, reliable communications (63%)
• Collaborative tools (62%)
NEEDS IMPROVEMENT
• C
onsistent, reliable, integrated
enterprise software (43%)
• Big Data, predictive analytics (24%)
• S
mart sensors and connected devices (20%)
• E
ncouraging flexibility,
openness and innovation (76%)
• P
roviding basic digital skills
and awareness (74%)
• E
quipping staff with the latest
technology (54%)
• P
roviding an attractive work
environment (52%)
• P
roviding attractive pay and conditions
for digital staff (43%)
• P
roviding opportunities for career
progression for digital staff (44%)
• R
egularly assess the relevance of new
technologies to your business.
• B
roaden your search for talent –
consider entrepreneurs and tech
communities.
• D
evelop broader career paths into
commercial management for those
with tech skills.
INDUSTRY,
COUNTRY &
REGION ANALYSIS
DIGITAL
WORKFORCE
• Recruiting the best digital staff (43%)
• Invest in flexible, open technical solutions
that can scale up and down with business
activity and avoid long term lock-in.
RESEARCH
METHODOLOGY
• 7 4% still using Windows XP,
same number deploying tablets
ACTIONS TO CONSIDER
UK’S DIGITAL
LEADERS SHOW
THE WAY
CURRENT STRENGTHS
THE IMPACT OF
DIGITAL ON THE
UK ECONOMY
CA PA B I L I T Y
% SCORES REPRESENT
RESPONDENTS WHO
SAID THEY HAD “STRONG”
OR “VERY STRONG”
CA PA B I L I T I E S I N
THESE AREAS.
THE UK’S
£92BN DIGITAL
OPPORTUNITY
STRENGTHS & PRIORITIES
FOR DEVELOPMENT
49
CHART 1
CURRENT STRENGTHS
• Protecting sensitive information (65%)
• Collecting relevant, reliable data (56%)
• D
efining a strategy, structure and roles for
managing data (45%)
• S
toring, integrating and processing large
data sets (43%)
• D
eriving insights from data (44%)
• Recruiting staff with specialist data skills (40%)
• U
sing digital to improve collaboration
across the organisation (60%)
• Developing and refreshing digital strategy (52%)
• Making work more flexible (59%)
• G
aining market intelligence on digital
opportunities and threats (53%)
• Taking faster business decisions (58%)
• A flatter, more flexible organisation structure (51%)
• Implementing business change projects (56%)
• U
sing online platforms and digital
marketplaces (50%)
• Sharing customer and product information (34%)
• Partnering with digital specialists (47%)
• C
o-creating and innovating products
and services (34%)
• Sharing information with suppliers (44%)
• Connecting inter-company systems (34%)
• Sourcing ideas from online communities (26%)
• U
sing social media to understand
and influence customers (62%)
• Increasing customer loyalty (50%)
• Using customers as advocates & promoters (55%)
• Incorporating customer feedback in R&D (48%)
• Using customer feedback to improve service (54%)
• Delivering more customised products (51%)
• High-quality websites and apps (49%)
• Increase market intelligence and strategy
refreshes to adapt to pace of industry
change.
• B
reak down organisational silos and
increase cross functional working.
• R
eview existing business processes and
consider how technology could broaden
partnerships and improve effectiveness.
• E
ncourage a culture of openness and of
challenging organisational norms.
• C
onsider additional ways of collecting
customer-related information (latest techniques).
• E
nsure customer data is integrated with
other performance management systems
and can influence processes across the firm
(fran product development to sales).
INDUSTRY,
COUNTRY &
REGION ANALYSIS
DIGITAL
CUSTOMER
ENGAGEMENT
• P
repare an information strategy, setting out
how data will be used to generate value and
how information quality will be maintained.
RESEARCH
METHODOLOGY
OPEN AND
COLLABORATIVE
PARTNERSHIPS
• A
ssess available sources of information,
from inside and outside the company –
how much is actively used?
UK’S DIGITAL
LEADERS SHOW
THE WAY
DIGITAL
STRATEGY AND
LEADERSHIP
ACTIONS TO CONSIDER
THE IMPACT OF
DIGITAL ON THE
UK ECONOMY
DIGITAL
INFORMATION
• P
resenting timely and user-friendly
management information (64%)
NEEDS IMPROVEMENT
THE UK’S
£92BN DIGITAL
OPPORTUNITY
CA PA B I L I T Y
50
4
RESEARCH
METHODOLOGY
“WE AIMED FOR A
R E P R E S E N TAT I V E S A M P L E
AC R O S S T H E U K P R I VAT E
SECTOR, REPRESENTING ALL
REGIONS AND INDUSTRIES.”
THE UK’S
£92BN DIGITAL
OPPORTUNITY
RESEARCH APPROACH
S U R V E Y A N A LY S I S
WAS CARRIED OUT BY
OXFORD ECONOMICS.
INDUSTRY,
COUNTRY &
REGION ANALYSIS
Companies were asked to estimate the difference
digital capabilities make to their financial performance,
both now and in the event that they had optimal digital
capabilities. We also asked companies how many staff
with digital skills they expected to employ over the next
two years and the percentage of jobs in their company
they expected to become obsolete. We were able to
aggregate their responses using regional and industry
totals and apply modelling assumptions to estimate
the impact across the private sector of the economy.
We asked a series of questions about digital capabilities,
current strength, leadership priorities now and in
three years time, contribution to improved commercial
outcomes, and improved financial performance.
By analysing all this data across industries, regions,
and other demographic segments, we have compiled a
detailed census of UK companies’ digital strengths and
areas for improvement ■
RESEARCH
METHODOLOGY
e aimed for a representative sample across the UK
private sector, representing all regions and industries
(using Standard Industrial Classifications) – see below
for a summary description. Where we had small industry
sample sizes (such as in Agriculture & Forestry and
Utilities) we aggregated the results into Other Industries.
Arts and recreation was also added to Other Services.
Northern Ireland and the North East both had fewer
than 30 respondents, so whenever we present regional
results, we emphasise the caution that should accompany
these results.
UK’S DIGITAL
LEADERS SHOW
THE WAY
W
THE IMPACT OF
DIGITAL ON THE
UK ECONOMY
1,0 4 9 U K C O M PA N I E S R E S P O N D E D TO O U R S U R V E Y C O N C E R N I N G
T H E I R C U R R E N T D I G I TA L CA PA B I L I T I E S A N D P L A N S F O R T H E F U T U R E .
A L L I N T E R V I E W S W E R E C A R R I E D O U T D U R I N G A P R I L A N D M AY 2 0 1 5 .
52
CHART 2
Publishing (e.g. Books & Software), Production, Recording & Broadcasting (e.g. TV, Radio), Telecommunications,
Computer Programming & Consultancy, Information Services
FINANCIAL SERVICES
Banking, Insurance, Pension Funding, Trust Funds
TRANSPORTATION & STORAGE
Land, Sea & Air transport (Passenger & Freight). Warehousing & Support Services, Postal & Courier Services
PROFESSIONAL & TECH SERVICES
Legal & Accountancy Services, Management Consultancy, Design Agencies, Marketing & Advertising Agencies, Scientific & Technical Research
WHOLESALE & RETAIL
Wholesale/Retail of Motor Cars/Motor Cycles, Other Wholesale Trade, Retail Trade via Stores, Stalls & Markets, Other Retail Trade (e.g. internet)
Building, Civil Engineering, Other Construction Services (e.g. Plumbing, Joinery, Roofing)
Education, Human Health & Social Care
MANUFACTURING
Wide range of manufacturers (Textiles, Cars, Food & Drink, Chemicals & Petroleum Products, Print & Media, Computer & Electrical Products )
OTHER SERVICES
Arts, Entertainment and Recreation, Hotels, Restaurants and Bars, Administrative & Support Services, Other Personal Services (e.g. Hairdressers)
OTHER INDUSTRIES
Utilities (Electricity, Gas, Water Services), Agriculture, Forestry & Food, Mining & Quarrying
* For the detailed breakdown of the Standard Industrial Classifications hierarchy, please visit the Office of National Statistics website,
at http://www.ons.gov.uk/ons/guide-method/classifications/current-standard-classifications/standard-industrial-classification/index.html
INDUSTRY,
COUNTRY &
REGION ANALYSIS
CONSTRUCTION
EDUCATION & HEALTHCARE
RESEARCH
METHODOLOGY
ICT
UK’S DIGITAL
LEADERS SHOW
THE WAY
DEFINITION
THE IMPACT OF
DIGITAL ON THE
UK ECONOMY
INDUSTRY
SECTOR
THE UK’S
£92BN DIGITAL
OPPORTUNITY
S U M M A R Y O F S TA N DA R D
I N D U S T R I A L C L A S S I F I CAT I O N S *
53
40%
UK’S DIGITAL
LEADERS SHOW
THE WAY
In which region of the UK is
your headquarters located?
35%
30%
20%
RESEARCH
METHODOLOGY
20%
7%
6%
5%
5%
5%
5%
4%
3%
2%
1%
INDUSTRY,
COUNTRY &
REGION ANALYSIS
10%
O
R
IR TH
EL E
A RN
N
D
N
N
O
EA RTH
ST
S
LE
W
A
L A EA
N ST
D
S
ID
M
YO
R
H KS
U H
M IR
BE E
R
&
EN EA
G ST
LA O
N F
D
D
N
A
TL
O
SC
SO
W UT
ES H
T
L A WE
N ST
D
S
ID
M
N
O
W RT
ES H
T
SO
U
EA TH
ST
N
D
O
N
0
LO
THE IMPACT OF
DIGITAL ON THE
UK ECONOMY
FIG. 17
THE UK’S
£92BN DIGITAL
OPPORTUNITY
SURVEY RESPONDENTS
– U K LO CAT I O N S
54
N
D
TU
N
T
G
IC
RI
U OT
ST H
RI ER
ES
FA
C
IN
U
A
ST
RU
C
TI
O
N
SP
O
& R
ST TA
O TI
RA O
G N
E
N
N
ED
U
E A CA
LT TI
H ON
C
A &
RE
5%
TR
O
H
11%
W
RE HO
TA LE
I L SA
TR LE
A &
D
E
A
10%
C
M
O
RV TH
IC ER
ES
16%
13%
12%
10%
9%
7%
5%
5%
INDUSTRY,
COUNTRY &
REGION ANALYSIS
SE
13%
RESEARCH
METHODOLOGY
FI
N
SE AN
RV C
IC IAL
ES
15%
UK’S DIGITAL
LEADERS SHOW
THE WAY
PR
TE OF
C ES
H SI
SE ON
RV A
IC L &
ES
What is the principle
sector your company
operates in?
THE IMPACT OF
DIGITAL ON THE
UK ECONOMY
FIG. 18
THE UK’S
£92BN DIGITAL
OPPORTUNITY
SURVEY RESPONDENTS
– INDUSTRIES
20%
0
55
A CH
N
FF CI IEF
IC AL
ER
N
4%
4%
3%
3%
1%
0
1%
1%
C
H
F F DA I E F
IC TA
ER
8%
O
8%
D CH
I
FF GIT IEF
IC AL
ER
5%
O
E C
O CU HI
FF T EF
IC IVE
ER
O
PE
C
O RAT HI
FF I EF
IC NG
ER
D
IR
O E
F C
S A TO
LE R
S
IN
N
O C
V
O AT HI
FF I EF
IC ON
ER
M
A
RK C
O ET HI
FF I EF
IC NG
ER
TE
C
H
N C
O OL HI
FF O EF
IC GY
ER
ST
R C
O AT HI
FF E EF
IC GY
ER
EX
O
25%
23%
15%
10%
7%
INDUSTRY,
COUNTRY &
REGION ANALYSIS
FI
C OT
-L H
EV ER
EL
20%
RESEARCH
METHODOLOGY
10%
F O
C OU W
H
A ND NER
IR E /
M R
A /
N
RE
TO P OT
O
C RT HE
-L IN R/
EV G
EL
IN
FO
RM C
O AT HI
FF I EF
IC ON
ER
What is your role?
UK’S DIGITAL
LEADERS SHOW
THE WAY
15%
THE IMPACT OF
DIGITAL ON THE
UK ECONOMY
FIG. 19
THE UK’S
£92BN DIGITAL
OPPORTUNITY
SURVEY RESPONDENTS
– JOB TITLES
30%
12%
56
UK’S DIGITAL
LEADERS SHOW
THE WAY
RESEARCH
METHODOLOGY
BUSINESS TO
BUSINESS (B2B)
INDUSTRY,
COUNTRY &
REGION ANALYSIS
26%
B2B & B2C
BUSINESS TO CONSUMER (B2C)
32%
THE IMPACT OF
DIGITAL ON THE
UK ECONOMY
42%
THE UK’S
£92BN DIGITAL
OPPORTUNITY
W H AT B E S T D E S C R I B E S
T H E N AT U R E O F
YO U R B U S I N E S S ?
57
THE IMPACT OF
DIGITAL ON THE
UK ECONOMY
UK’S DIGITAL
LEADERS SHOW
THE WAY
57%
THE UK’S
£92BN DIGITAL
OPPORTUNITY
W H AT D O E S Y O U R
C O M P A N Y P R I M A R I LY
PROVIDE?
RESEARCH
METHODOLOGY
PROVIDER OF NON-DIGITAL
PRODUCTS & SERVICES, BUT
USES DIGITAL TECHNOLOGY
14%
PROVIDER OF
DIGITAL PRODUCTS
& SERVICES
INDUSTRY,
COUNTRY &
REGION ANALYSIS
29%
PROVIDER OF DIGITAL CONTENT
AS A PART OF ITS RANGE OF
PRODUCTS & SERVICES
58
INDUSTRY,
COUNTRY &
REGION ANALYSIS
13%
16%
RESEARCH
METHODOLOGY
OVER 10,000
2,501 - 10,000
20%
51 - 250
16%
11 - 50
16%
1 -10
UK’S DIGITAL
LEADERS SHOW
THE WAY
251 - 2,500
THE IMPACT OF
DIGITAL ON THE
UK ECONOMY
20%
THE UK’S
£92BN DIGITAL
OPPORTUNITY
HOW MANY PEOPLE
D O E S YO U R C O M PA N Y
E M P LOY ?
59
INDUSTRY,
COUNTRY &
REGION ANALYSIS
7%
19%
24%
24%
RESEARCH
METHODOLOGY
OVER £1BN
£15M - £99.9M
£2M - £14.9M
UNDER £2M
UK’S DIGITAL
LEADERS SHOW
THE WAY
£100M - £999.9M
THE IMPACT OF
DIGITAL ON THE
UK ECONOMY
25%
THE UK’S
£92BN DIGITAL
OPPORTUNITY
W H AT W A S Y O U R
C O M PA N Y ’ S A N N UA L
UK REVENUE IN 2014?
60
UK’S DIGITAL
LEADERS SHOW
THE WAY
RESEARCH
METHODOLOGY
29%
6 - 15 YEARS
INDUSTRY,
COUNTRY &
REGION ANALYSIS
8%
2%
THE IMPACT OF
DIGITAL ON THE
UK ECONOMY
OVER 80 YRS
6% 16%
56 - 80 YRS
31 - 55 YRS
25% 15%
16 - 30 YRS
3 - 5 YEARS
6 M - 2 YRS
THE UK’S
£92BN DIGITAL
OPPORTUNITY
HOW LONG HAS
YO U R C O M PA N Y
BEEN IN BUSINESS?
61
5
I N D U S T R Y,
COUNTRY &
R E G I O N A N A LY S I S
“LONDON REPRESENTS 31%
O F T H E T O TA L U K G R OW T H
AND LEADS ALL OTHER
R E G I O N S . D I G I TA L I S
O N LY G O I N G T O B E C O M E
M O R E I M P O R T A N T. ”
I N D U S T R Y A N A LY S I S :
FIG. 20
Digital capabilities:
strength and priority.
n Information and
communications technology
(ICT) infrastructure
90%
88%
80%
81%
n Priority in three
84%
81%
years’ time
70%
n All others
65%
59%
55%
52 %
6 3% 6 3%
55%
40%
51%
50%
4 3%
41%
3 9%
INDUSTRY,
COUNTRY &
REGION ANALYSIS
30%
RESEARCH
METHODOLOGY
6 3%
60%
50%
81%
UK’S DIGITAL
LEADERS SHOW
THE WAY
20%
10%
EN C
G US DIG
A T I
G O T
EM M AL
EN ER
T
C
O
PA LL A
RT BO O
N R PE
ER A N
SH TIV &
IP E
S
S
LE TR DI
A AT GI
D E TA
ER G
SH Y & L
IP
RM DIG
AT IT
IO AL
N
IN
FO
RK DIG
FO IT
RC AL
E
O
W
FR TE
A CH
ST N
RU O
C LO
TU G
RE Y
0
IN
he ICT industry needs to strengthen financial understanding
of its own business models in the face of accelerating
disruption. Despite being at the vanguard of all things
digital, uncertain returns on investment and a paucity
of available cash are key reasons why the sector is
undershooting its digital potential by £2.9bn. Managing
change and developing an effective digital strategy are
also key challenges. Even though 43% report significant
industry disruption over the last three years, 25% say they
don’t know how their industry will look in a years’ time.
More than half say they’ve seen new competitors as a
result of digital innovation. Yet, despite the challenges,
the industry still leads the economy in digital - 26% qualify
as digital leaders, well ahead of all other sectors ■
THE IMPACT OF
DIGITAL ON THE
UK ECONOMY
T
THE UK’S
£92BN DIGITAL
OPPORTUNITY
I N F O R M AT I O N A N D
C O M M U N I CAT I O N S T E C H N O L O GY
(ICT) INFRASTRUCTURE
63
THE UK’S
£92BN DIGITAL
OPPORTUNITY
FIG. 21
and food services
90%
80%
n Priority in three
years’ time
80%
6 5%
6 3%
54%
50%
5 7 % 59%
55% 55%
5 3%
47 %
4 5%
40%
52 %
4 2%
42%
3 9%
3 9%
INDUSTRY,
COUNTRY &
REGION ANALYSIS
3 3%
30%
RESEARCH
METHODOLOGY
60%
n All others
76 %
70%
UK’S DIGITAL
LEADERS SHOW
THE WAY
20%
10%
EN C
G US DIG
A T I
G O T
EM M AL
EN ER
T
C
O
PA LL A
RT BO O
N R PE
ER A N
SH TIV &
IP E
S
S
LE TR DI
A AT GI
D E TA
ER G
SH Y & L
IP
RM DIG
AT IT
IO AL
N
IN
FO
RK DIG
FO IT
RC AL
E
O
W
FR TE
A CH
ST N
RU O
C LO
TU G
RE Y
0
IN
‘H
n Accommodation
urrah for outsourcing!’ seems to be accommodation
and food services’ strategy for achieving its full digital
potential. An overwhelming 85% of the industry report
that it’s now using significantly more digital content,
but as a result of the industry’s decision to contract-out
the challenges only 10% qualify as digital leaders, and
72% struggle to recruit staff with key skills. Unsurprisingly
therefore, accommodation and food firms lead the
economy by their commitment to open and collaborative
(external) partnerships. But if the £472m opportunity is
to be fully realised then investment within the industry
has to be priority. Will outsourcing - even to use the
very best digital talent - allow the industry to keep pace
longer term? ■
THE IMPACT OF
DIGITAL ON THE
UK ECONOMY
AC C O M M O DAT I O N
AND FOOD SERVICES
64
THE UK’S
£92BN DIGITAL
OPPORTUNITY
E D U CAT I O N , H E A LT H CA R E
AND SOCIAL WORK
FIG. 22
and social work
90%
n Priority in three
years’ time
82 %
80%
74%
70%
7 2%
7 1%
n All others
7 2%
52 %
50%
51%
51%
53%
5 8%
55%
50%
5 3%
4 5%
40%
3 7 % 3 9%
36%
INDUSTRY,
COUNTRY &
REGION ANALYSIS
30%
56%
RESEARCH
METHODOLOGY
60%
UK’S DIGITAL
LEADERS SHOW
THE WAY
20%
10%
EN C
G US DIG
A T I
G O T
EM M AL
EN ER
T
C
O
PA LL A
RT BO O
N R PE
ER A N
SH TIV &
IP E
S
S
LE TR DI
A AT GI
D E TA
ER G
SH Y & L
IP
RM DIG
AT IT
IO AL
N
IN
FO
RK DIG
FO IT
RC AL
E
O
W
FR TE
A CH
ST N
RU O
C LO
TU G
RE Y
0
IN
A
n Education, healthcare
lack of funds is putting the education, healthcare,
and social work industry at risk of becoming the
poor digital relation. If the sector was able to take full
advantage of digital it could look forward to a £1.2bn
boost, but only 9% of businesses can currently be called
digital leaders. By far the largest challenge is that of
available investment budget. The industry is seeing a
slower pace of change than others, but less disruption
also means current providers may be more vulnerable
to new entrants. Digital content is a success: 80% of
the industry reports producing it. But as many plan to
continue prioritising digital information, firms could be
vulnerable to blind spots elsewhere. The industry seems
ripe for disruption ■
THE IMPACT OF
DIGITAL ON THE
UK ECONOMY
65
THE UK’S
£92BN DIGITAL
OPPORTUNITY
FINANCIAL SERVICES
FIG. 23
n Financial services
n Priority in three
90%
years’ time
80%
n All others
80%
70%
77%
76 %
58%
5 7 % 56%
50%
4 3%
56 %
55%
51%
50%
4 5%
5 8%
4 0% 3 9%
INDUSTRY,
COUNTRY &
REGION ANALYSIS
30%
RESEARCH
METHODOLOGY
62 %
60%
40%
76%
75%
UK’S DIGITAL
LEADERS SHOW
THE WAY
20%
10%
EN C
G US DIG
A T I
G O T
EM M AL
EN ER
T
C
O
PA LL A
RT BO O
N R PE
ER A N
SH TIV &
IP E
S
S
LE TR DI
A AT GI
D E TA
ER G
SH Y & L
IP
RM DIG
AT IT
IO AL
N
IN
FO
RK DIG
FO IT
RC AL
E
O
W
FR TE
A CH
ST N
RU O
C LO
TU G
RE Y
0
IN
I
ntense competition from the innovative and fast-growing
Fintech sector is forcing financial services firms to
accelerate their digital capabilities. Nearly a third of
the industry reports significant disruption over the last
three years, and 63% say the sector is now much more
competitive. This may explain why the industry is stronger
in all digital capabilities than the UK average. Nearly a
fifth of financial services companies qualify as digital
leaders, and the industry is poised to reap £8.6bn if it
reaches its full potential. Changes in regulation and the
well-worn but still very real concerns around personal
data are major challenges ■
THE IMPACT OF
DIGITAL ON THE
UK ECONOMY
66
THE UK’S
£92BN DIGITAL
OPPORTUNITY
M A N U FACT U R I N G
FIG. 24
n Manufacturing
n Priority in three
90%
years’ time
80%
7 8%
70%
n All others
80%
75%
7 2%
7 1%
UK’S DIGITAL
LEADERS SHOW
THE WAY
6 4%
58%
50%
55%
4 8%
52 % 51%
56% 55%
5 4% 5 2%
4 3%
40%
3 9% 3 9%
INDUSTRY,
COUNTRY &
REGION ANALYSIS
30%
RESEARCH
METHODOLOGY
60%
20%
10%
EN C
G US DIG
A T I
G O T
EM M AL
EN ER
T
C
O
PA LL A
RT BO O
N R PE
ER A N
SH TIV &
IP E
S
S
LE TR DI
A AT GI
D E TA
ER G
SH Y & L
IP
RM DIG
AT IT
IO AL
N
IN
FO
RK DIG
FO IT
RC AL
E
O
W
FR TE
A CH
ST N
RU O
C LO
TU G
RE Y
0
IN
UK
manufacturers are facing a period of rapid disruption
and need to get their digital ducks in a row to secure
a share of a £8.7bn prize. Robotics, the Internet of
Everything and Artificial Intelligence will create new
demands, and over a third (34%) are uncertain how
their industry will evolve in a year. One of the biggest
challenges lies in recruiting and retaining talent with
specialised data management skills: only 20% report this
as a success. Already technologically advanced, 19% of
manufacturers qualify as digital leaders. And the industry
plans to prioritise digital information capabilities, closely
followed by technology infrastructure ■
THE IMPACT OF
DIGITAL ON THE
UK ECONOMY
67
THE UK’S
£92BN DIGITAL
OPPORTUNITY
FIG. 25
tech services
90%
n Priority in three
years’ time
80%
7 7%
70%
n All others
7 7%
70%
7 1%
6 8%
57%
50%
40%
55%
51% 52 %
5 8%
55% 55%
4 4% 4 4%
51%
4 0%
5 3%
3 9%
INDUSTRY,
COUNTRY &
REGION ANALYSIS
30%
RESEARCH
METHODOLOGY
60%
UK’S DIGITAL
LEADERS SHOW
THE WAY
20%
10%
EN C
G US DIG
A T I
G O T
EM M AL
EN ER
T
C
O
PA LL A
RT BO O
N R PE
ER A N
SH TIV &
IP E
S
S
LE TR DI
A AT GI
D E TA
ER G
SH Y & L
IP
RM DIG
AT IT
IO AL
N
IN
FO
RK DIG
FO IT
RC AL
E
O
W
FR TE
A CH
ST N
RU O
C LO
TU G
RE Y
0
IN
D
n Professional and
igital technologies are essential to the growing success
of professional and tech services companies. Last year
digital helped boost revenues by £34.7bn. But when full
digital opportunity is taken into account, future growth
potential promises a further £27.2bn. These figures are
the highest across any industry. A quarter of firms say
they’ve seen significant disruption over the last three
years, and the same percentage is uncertain how their
industry will look in a years’ time. Yet firms seem ready
to meet the challenges head on: 15% qualify as digital
leaders. Digital information capability and technology
infrastructure are definitely priorities, especially when
only a third report success in developing strategies to
manage their company data ■
THE IMPACT OF
DIGITAL ON THE
UK ECONOMY
PROFESSIONAL
AND TECH SERVICES
68
THE UK’S
£92BN DIGITAL
OPPORTUNITY
CONSTRUCTION
FIG. 26
n Construction
n Priority in three
90%
years’ time
80%
n All others
76%
70%
70%
67%
5 7 % 56%
50%
40%
67%
4 5%
52 %
67%
56 %
56% 55%
50%
5 3%
4 5%
4 4%
37%
3 9%
INDUSTRY,
COUNTRY &
REGION ANALYSIS
30%
RESEARCH
METHODOLOGY
60%
UK’S DIGITAL
LEADERS SHOW
THE WAY
20%
10%
EN C
G US DIG
A T I
G O T
EM M AL
EN ER
T
C
O
PA LL A
RT BO O
N R PE
ER A N
SH TIV &
IP E
S
S
LE TR DI
A AT GI
D E TA
ER G
SH Y & L
IP
RM DIG
AT IT
IO AL
N
IN
FO
RK DIG
FO IT
RC AL
E
O
W
FR TE
A CH
ST N
RU O
C LO
TU G
RE Y
0
IN
T
he construction industry is reaping huge benefits from
digital, and leads the way in revenue growth (5.9%) derived
from digital capability. A fifth of firms report significant
industry disruption over the last three years, and 30% say
they are uncertain how their industry will look in a years’
time. Far from being complacent, however, the industry has
plans to make as much of its £8.9bn digital opportunity and
nearly 20% of construction firms qualify as digital leaders.
However, the majority lacks capability in handling digital
information, only 44% say they are able to collect relevant
and reliable data. The main obstacle to attaining the full
benefit of digital potential is an uncertain attitude towards
return on investment ■
THE IMPACT OF
DIGITAL ON THE
UK ECONOMY
69
THE UK’S
£92BN DIGITAL
OPPORTUNITY
FIG. 27
retail trade
90%
80%
n Priority in three
years’ time
81%
7 9%
75%
66%
56%
50%
52 %
51%
4 6%
52 %
56%
5 3%
47 % 48%
4 4%
4 0%
3 8%
INDUSTRY,
COUNTRY &
REGION ANALYSIS
30%
RESEARCH
METHODOLOGY
60%
40%
n All others
75%
70%
UK’S DIGITAL
LEADERS SHOW
THE WAY
32 %
20%
10%
EN C
G US DIG
A T I
G O T
EM M AL
EN ER
T
C
O
PA LL A
RT BO O
N R PE
ER A N
SH TIV &
IP E
S
S
LE TR DI
A AT GI
D E TA
ER G
SH Y & L
IP
RM DIG
AT IT
IO AL
N
IN
FO
RK DIG
FO IT
RC AL
E
O
W
FR TE
A CH
ST N
RU O
C LO
TU G
RE Y
0
IN
T
n Wholesale and
echnological advances like the Internet of Things and
data analytics are changing the nature of retail, but the
industry is moving slower than expected. Only 27% of
firms say they are more digitally advanced than other
industries. Retail lags behind in each digital capability;
only 7% qualifying as digital leaders, which ranks as the
lowest share across all industries. And less than a third
of firms say they are able to derive insights from their
data. Current progress appears to be slow because
of uncertain returns on investment and a shortage of
funding. Nevertheless, revenues could increase by £17.2bn
if the industry reached full digital potential ■
THE IMPACT OF
DIGITAL ON THE
UK ECONOMY
WHOLESALE AND
R E TA I L T R A D E
70
THE UK’S
£92BN DIGITAL
OPPORTUNITY
FIG. 28
and storage
90%
80%
n Priority in three
years’ time
82 %
78%
7 7%
70%
n All others
69%
6 5%
54%
40%
56%
56%
51%
51%
52 %
51%
5 3%
47 %
4 3% 4 4%
3 9%
INDUSTRY,
COUNTRY &
REGION ANALYSIS
30%
RESEARCH
METHODOLOGY
60%
50%
77%
UK’S DIGITAL
LEADERS SHOW
THE WAY
20%
10%
EN C
G US DIG
A T I
G O T
EM M AL
EN ER
T
C
O
PA LL A
RT BO O
N R PE
ER A N
SH TIV &
IP E
S
S
LE TR DI
A AT GI
D E TA
ER G
SH Y & L
IP
RM DIG
AT IT
IO AL
N
IN
FO
RK DIG
FO IT
RC AL
E
O
W
FR TE
A CH
ST N
RU O
C LO
TU G
RE Y
0
IN
T
n Transportation
he transportation and storage industry is in a period
of consolidation. More than a quarter of firms report
significant disruption over the last three years – that’s
among the highest of any industry. And 31% say they are
uncertain how the industry will look in a years’ time with
disruption being fuelled by innovations like smart tags.
Yet firms are keeping some pace: 18% qualify as digital
leaders. Transport and storage firms find it difficult to
justify digital investment and managing the cultural
change it can bring is an obvious concern. There is good
reason for the industry to think digital – a further £7.6bn
a year opportunity could be unlocked if it reaches full
digital capabilities ■
THE IMPACT OF
DIGITAL ON THE
UK ECONOMY
T R A N S P O R TAT I O N
AND STORAGE
71
C O U N T R Y A N A LY S I S :
THE UK’S
£92BN DIGITAL
OPPORTUNITY
SCOTLAND
FIG. 29
50%
n Scotland
n Rest of UK
5.3%
UK’S DIGITAL
LEADERS SHOW
THE WAY
4.2%
40%
3.9%
3.6%
3 .1 %
20%
RESEARCH
METHODOLOGY
3.6%
30%
INDUSTRY,
COUNTRY &
REGION ANALYSIS
10%
PO D
I
( T G
IN RE EN ITA
C VE TIA L
RE N L
A UE
SE
)
J
(N OB
EX S
D
T CR IG
2 EA IT
YE T AL
A ED
RS
)
0
IN IN
RE CR
VE EA
S
(2 NU E
01 E
4)
D
igital contributed £10.3bn to the Scottish economy last
year and, as 82% of firms are providing significantly more
digital content than they were three years ago, Scotland
leads the UK. Over 100,000 new digital jobs are expected
to be created within the next two years, and Scotland’s
economy would benefit by £10.7bn a year if firms reached
their full digital potential. There are always challenges:
only 13% of firms are currently digital leaders. And so
securing management support and dealing with change
should be high on firms’ lists of priorities. Almost half of
businesses would like to see better education in schools,
which is a proportion exceeded only by the West Midlands
and South East ■
THE IMPACT OF
DIGITAL ON THE
UK ECONOMY
The economic impact
of digital.
72
THE UK’S
£92BN DIGITAL
OPPORTUNITY
WALES
FIG. 30
n Wales
n Rest of UK
80%
70%
UK’S DIGITAL
LEADERS SHOW
THE WAY
7. 6 %
60%
RESEARCH
METHODOLOGY
60%
50%
40%
4.2%
3.4%
3.7%
3 .1 %
20%
10%
3.2%
INDUSTRY,
COUNTRY &
REGION ANALYSIS
30%
PO D
I
( T G
IN RE EN ITA
C VE TIA L
RE N L
A UE
SE
)
J
(N OB
EX S
D
T CR IG
2 EA IT
YE T AL
A ED
RS
)
0
IN IN
RE CR
VE EA
S
(2 NU E
01 E
4)
D
igital is having a strong effect on the Welsh economy,
yet the country is less optimistic than other countries
and regions about its digital future. Digital contributed
£6.3bn in revenues last year, which is a 7.6% increase
on the year before. However, in other aspects, Wales is
lagging behind. Only 12% of firms are digital leaders, and
only 30% of firms believe their industry has become more
competitive due to digital. 40% of firms don’t think digital
will lead to more and better employment opportunities,
which is certainly a more pessimistic view than other
countries and regions. Attracting the right talent has
also been identified by more than half of firms as a real
concern. Both these issues may help explain why digital is
expected to drive a smaller increase of 48,000 jobs over
the next two years ■
THE IMPACT OF
DIGITAL ON THE
UK ECONOMY
The economic impact
of digital.
73
THE UK’S
£92BN DIGITAL
OPPORTUNITY
NORTHERN IRELAND
FIG. 31
n Northern Ireland
n Rest of UK
50%
UK’S DIGITAL
LEADERS SHOW
THE WAY
4.3%
40%
3.9%
3.6%
20%
0.5%
INDUSTRY,
COUNTRY &
REGION ANALYSIS
1.4%
10%
RESEARCH
METHODOLOGY
3.2%
30%
PO D
I
( T G
IN RE EN ITA
C VE TIA L
RE N L
A UE
SE
)
J
(N OB
EX S
D
T CR IG
2 EA IT
YE T AL
A ED
RS
)
0
IN IN
RE CR
VE EA
S
(2 NU E
01 E
4)
D
igital has so far exerted a weak impact on Northern
Ireland’s economy, contributing only £285m to firms’
revenue growth. No survey respondents qualified as digital
leaders, and yet the majority of firms have experienced
increased competition due to digital. More than a third
of firms are uncertain about the future landscape of their
industries which may explain why firms are less optimistic
about their £1.1bn Digital Opportunity. Some of the issues
at play are fundamental; ineffective hardware or software
is a concern for 64% of firms, and attracting talented
individuals is also a challenge for the majority of firms.
The prospects for digital job creation however appear very
positive: an expected demand for 32,000 new jobs over the
next two years is encouraging ■
THE IMPACT OF
DIGITAL ON THE
UK ECONOMY
The economic impact
of digital.
74
R E G I O N A N A LY S I S :
THE UK’S
£92BN DIGITAL
OPPORTUNITY
NORTH WEST
FIG. 32
n North West
n Rest of UK
50%
UK’S DIGITAL
LEADERS SHOW
THE WAY
4.3%
40%
3.9%
3.7%
30%
3 .1 %
20%
3.2%
RESEARCH
METHODOLOGY
3.4%
INDUSTRY,
COUNTRY &
REGION ANALYSIS
10%
PO D
I
( T G
IN RE EN ITA
C VE TIA L
RE N L
A UE
SE
)
J
(N OB
EX S
D
T CR IG
2 EA IT
YE T AL
A ED
RS
)
0
IN IN
RE CR
VE EA
S
(2 NU E
01 E
4)
D
igital contributed £9.5bn to the region last year,
an increase of 3.9% from the year before; this increase is
lower than the national average. 40% of firms describe
themselves as at least partly digital, yet more than 60%
highlight difficulties in demonstrating compelling returns
on their investment, and over half are concerned about
digital skills shortages and regulation. These problems
may prevent the North West from taking the fullest
advantage of the £11.6bn a year opportunity that digital
could fuel. 17% of firms are already digital leaders,
a percentage exceeded only by London and the East
Midlands. Providing barriers can be overcome, businesses
believe digital could bring 112,000 new jobs over the next
two years ■
THE IMPACT OF
DIGITAL ON THE
UK ECONOMY
The economic impact
of digital.
75
THE UK’S
£92BN DIGITAL
OPPORTUNITY
N O R T H E A S T, Y O R K S H I R E
AND THE HUMBER
FIG. 33
and the Humber
50%
n Rest of UK
4.3%
40%
3.6%
3.7%
3.2%
30%
20%
INDUSTRY,
COUNTRY &
REGION ANALYSIS
1.3%
10%
RESEARCH
METHODOLOGY
3.4%
UK’S DIGITAL
LEADERS SHOW
THE WAY
PO D
I
( T G
IN RE EN ITA
C VE TIA L
RE N L
A UE
SE
)
J
(N OB
EX S
D
T CR IG
2 EA IT
YE T AL
A ED
RS
)
0
IN IN
RE CR
VE EA
S
(2 NU E
01 E
4)
Y
n North East, Yorkshire
orkshire and the Humber is now a cluster of digital
powerhouses. 45% of firms are providing digital
content which means that only London is more digitally
successful. Digital added £9.1bn to revenues last year,
and 126,000 new digital jobs are expected over the next
two. The region’s companies are confident: more than half
say they’re more digitally advanced than their industry
peers. But the challenge will be to take full advantage
of the Digital Opportunity, which could add a further
£5.4bn a year to revenues. Many firms anticipate rapid
disruption to their markets, more than a third would
welcome government guidance, and 44% seek easier
access to finance ■
THE IMPACT OF
DIGITAL ON THE
UK ECONOMY
The economic impact
of digital.
76
THE UK’S
£92BN DIGITAL
OPPORTUNITY
WEST MIDLANDS
FIG. 34
n West Midlands
n Rest of UK
50%
UK’S DIGITAL
LEADERS SHOW
THE WAY
4.3%
40%
3.6%
3.7%
3.2%
2.8%
20%
RESEARCH
METHODOLOGY
3.4%
30%
INDUSTRY,
COUNTRY &
REGION ANALYSIS
10%
PO D
I
( T G
IN RE EN ITA
C VE TIA L
RE N L
A UE
SE
)
J
(N OB
EX S
D
T CR IG
2 EA IT
YE T AL
A ED
RS
)
0
IN IN
RE CR
VE EA
S
(2 NU E
01 E
4)
T
he West Midlands has a traditionally strong industrial
base. Digital is on the rise however and contributed
£7.9bn over the last year to firms’ revenue growth in
the region. 90,000 jobs are expected to be created
over the next two years as a result. Almost 90% of firms
believe digital is a force for good, more than half report
new competitors, and 16% are digital leaders. There is
£9.2bn worth of untapped growth waiting for all firms
to reach their digital potential; the prevailing optimism
suggests this is more likely than not. Technology is
seen as an opportunity to overcoming obstacles, and
improvements to broadband is seen as a preferred
solution. But managing change and uncertain returns on
investment rank high among firms’ key concerns ■
THE IMPACT OF
DIGITAL ON THE
UK ECONOMY
The economic impact
of digital.
77
THE UK’S
£92BN DIGITAL
OPPORTUNITY
EAST MIDLANDS
FIG. 35
n East Midlands
n Rest of UK
50%
UK’S DIGITAL
LEADERS SHOW
THE WAY
3.7%
4.3%
40%
3.4%
3.2%
20%
10%
INDUSTRY,
COUNTRY &
REGION ANALYSIS
1.5%
RESEARCH
METHODOLOGY
3.4%
30%
PO D
I
( T G
IN RE EN ITA
C VE TIA L
RE N L
A UE
SE
)
J
(N OB
EX S
D
T CR IG
2 EA IT
YE T AL
A ED
RS
)
0
IN IN
RE CR
VE EA
S
(2 NU E
01 E
4)
D
igital contributed £5.2bn to the regional economy last
year. Nearly a quarter of firms are digital leaders and
digital is expected to create 76,000 new jobs over the
next two years. Yet East Midlands businesses are less
optimistic about the future; they estimate the potential
Digital Opportunity at £3.5bn which is among the
country’s lowest predictions. The biggest blocker appears
to be uncertain returns on investment in digital, alongside
fears of regulatory changes. Faster and more reliable
broadband is an issue for many firms; 55% want better
and cheaper digital tools ■
THE IMPACT OF
DIGITAL ON THE
UK ECONOMY
The economic impact
of digital.
78
THE UK’S
£92BN DIGITAL
OPPORTUNITY
SOUTH WEST
FIG. 36
50%
n South West
n Rest of UK
5 .1 %
40%
UK’S DIGITAL
LEADERS SHOW
THE WAY
4.2%
3.7%
3.2%
20%
10%
INDUSTRY,
COUNTRY &
REGION ANALYSIS
1.9%
RESEARCH
METHODOLOGY
3.6%
30%
PO D
I
( T G
IN RE EN ITA
C VE TIA L
RE N L
A UE
SE
)
J
(N OB
EX S
D
T CR IG
2 EA IT
YE T AL
A ED
RS
)
0
IN IN
RE CR
VE EA
S
(2 NU E
01 E
4)
T
he South West is home to a robust economy to which
digital has contributed £8.3bn, and in which 93,000 jobs
are expected to be created over the next two years.
But there is little room for complacency. Only 7% of
South West firms are digital leaders and the estimated
digital potential, £4.8bn, is much lower than the national
average. The greatest concerns are financial; uncertain
return on investment and lack of funds are seen as
great challenges. Companies are hoping technology
will solve many problems, and over 60% of them
highlight cheaper technology and improved broadband
as preferred solutions. There is also a fair amount
of scepticism around the value of some government
interventions like regulation, guidance and support,
standards, and education ■
THE IMPACT OF
DIGITAL ON THE
UK ECONOMY
The economic impact
of digital.
79
THE UK’S
£92BN DIGITAL
OPPORTUNITY
SOUTH EAST
FIG. 37
n South East
n Rest of UK
50%
40%
4.3%
UK’S DIGITAL
LEADERS SHOW
THE WAY
4.3%
3.9%
3.6%
3 .1 %
20%
3.2%
RESEARCH
METHODOLOGY
30%
INDUSTRY,
COUNTRY &
REGION ANALYSIS
10%
PO D
I
( T G
IN RE EN ITA
C VE TIA L
RE N L
A UE
SE
)
J
(N OB
EX S
D
T CR IG
2 EA IT
YE T AL
A ED
RS
)
0
IN IN
RE CR
VE EA
S
(2 NU E
01 E
4)
T
he South East expects to create more digital jobs
than any other region. Firms in the region are predicting
they’ll need an extra 173,000 digitally-skilled employees
over the next two years, but worries around the teaching
of digital skills are deeper here than in any other part of
the UK. It’s an important tension that needs resolving.
If the South East can overcome its challenges, annual
revenues in the region could increase by £19.5bn every
year. Other issues holding back the region include the
cost of solutions, the adoption of digital tools, as well
as the quality of broadband ■
THE IMPACT OF
DIGITAL ON THE
UK ECONOMY
The economic impact
of digital.
80
THE UK’S
£92BN DIGITAL
OPPORTUNITY
LONDON
FIG. 38
n London
n Rest of UK
50%
4.4%
40%
4.2%
UK’S DIGITAL
LEADERS SHOW
THE WAY
4.0%
3.6%
3.6%
2.7%
20%
RESEARCH
METHODOLOGY
30%
INDUSTRY,
COUNTRY &
REGION ANALYSIS
10%
PO D
I
( T G
IN RE EN ITA
C VE TIA L
RE N L
A UE
SE
)
J
(N OB
EX S
D
T CR IG
2 EA IT
YE T AL
A ED
RS
)
0
IN IN
RE CR
VE EA
S
(2 NU E
01 E
4)
L
ondon is a digital city. The majority of firms now provide
digital content, and their collective digitally-driven
revenue growth was £38.1bn last year. London represents
31% of total UK growth and leads all other regions and
countries. Undoubtedly, digital will become more and
more important. The capital could see a further £48.5bn
of annual benefit if it reaches its full potential; almost half
of firms say they are more digitally advanced than their
overseas competitors. However, many companies share
the deep financial concerns of other regions, and half
are looking for faster, more reliable broadband ■
THE IMPACT OF
DIGITAL ON THE
UK ECONOMY
The economic impact
of digital.
81
THE UK’S
£92BN DIGITAL
OPPORTUNITY
EAST OF ENGLAND
FIG. 39
n East of England
n Rest of UK
50%
UK’S DIGITAL
LEADERS SHOW
THE WAY
4.7%
4.3%
40%
3.6%
3.6%
20%
INDUSTRY,
COUNTRY &
REGION ANALYSIS
1.4%
10%
RESEARCH
METHODOLOGY
3.2%
30%
PO D
I
( T G
IN RE EN ITA
C VE TIA L
RE N L
A UE
SE
)
J
(N OB
EX S
D
T CR IG
2 EA IT
YE T AL
A ED
RS
)
0
IN IN
RE CR
VE EA
S
(2 NU E
01 E
4)
D
igital contributed £10.1bn to revenue growth last year and
is expected to contribute an additional 107,000 jobs in the
next two. Despite the region’s success, many firms lack
confidence in their digital abilities; they express concerns
about management support to deal with the change
that digital brings. Uncertain returns on investment are
also cited by a majority of firms, and 44% believe their
customers aren’t yet ready for digital solutions. This could
help explain the underlying issues of why more investment
is not forthcoming, and why reaching full digital potential
would only increase revenues by a relatively small 1.4% of
regional GDP – equivalent to £4.5bn ■
THE IMPACT OF
DIGITAL ON THE
UK ECONOMY
The economic impact
of digital.
82
ABOUT US
VIRGIN MEDIA BUSINESS IS THE ARM OF
V I R G I N M E D I A T H AT P R OV I D E S P R O D U C T S
AND SERVICES TO UK BUSINESSES AND THE
PUBLIC SECTOR.
We have more than 36,000 business customers, most of them small and medium
enterprises. We also partner with the public sector; with local councils, and thousands
of schools to improve connectivity in communities and support learning; and with the
emergency services to enable them to efficiently perform their life-saving skills.
We’re part of the Virgin Media group, the UK’s first provider of all four broadband, TV,
mobile phone and home phone services.
Virgin Media is a part of Liberty Global plc, the world’s largest international cable
company. Together Virgin Media and Liberty Global serve 27 million customers across 14
countries, helping connect people to the digital world and enabling them to discover and
experience its endless possibilities.
Virgin Media Business would like to thank the following people for making this report
possible: John Reiners and the team at Oxford Economics, our in-house designers
especially Louise O’Brien and Graham Puttock, as well as James Thompson and Ben
Fleetwood Smyth from Virgin Media Corporate Affairs.
83
TO FIND OUT HOW WE CAN
HELP MAKE THE MOST OF YOUR
D I G I T A L O P P O R T U N I T Y, C A L L U S O N :
0800 953 0180
A L T E R N A T I V E L Y, Y O U C A N R E Q U E S T
A T I M E F O R U S T O CA L L YO U B AC K AT:
W W W.V I R G I N M E D I A B U S I N E S S . C O . U K / C A L L B A C K
March 2016

THE UK`S £92 BN DIGITAL OPPORTUNITY

Transcription

Similar documents

ScanGate document

Ciencia, tecnología y valores: Axiología de la tecnociencia

Issue 242 - Legal IT Insider

PrimeFilm 1800 AFL Low-Cost 35mm Slide/Film Scanning Through

Mathew Hall, Peter Hegedüs, Josip Maras, Marco Mori, Zoltán

BALTICA 10

MODEL 324 ADDENDUM Please make the ,following changes in

Статья

2008 Suzuki GSXR750

Schumpeter Meeting Keynes: A Policy