Imagine what an extra £92 billion a year boost to the UK economy would be like? Well that is the figure identified in a new report that UK businesses could deliver if they maximized their digital potential. And for SMEs, that focus could also see them grow at three times the rate of larger firms as a result! Adding such a windfall to the SME sector seems too good to be true but according to a study undertaken by Oxford Economics and Virgin Media Business, the UK SME sector could definitely drive that amount by investing in digital technology.
We believe that the SME sector should capitalise this opportunity, because in doing so they would create over one million jobs over the next 2 years. The report examined the impact of digital capabilities on business and found that in 2014, UK companies generated £123 billion in business revenues, equivalent to 3.4% of total GDP.
While digital is expected to create jobs over the year - as per the report - it will also result in the loss of jobs (approximately 300,000 jobs or 2% of the workforce). However, of the 1,000 companies that were surveyed, more than four in ten (44%) don’t expect any jobs to become obsolete. In fact, they feel that that new hires will outweigh any losses.
According to the authors of the report, small businesses – those with the fewer than 250 employees – have the most to gain as they can expect an additional £56 billion boost if they get access to the latest digital capabilities.
There is big money at stake here and it is spread across all industries. However, the opportunity is the greatest for professional and tech services firms. It is estimated that they could add £27 billion a year in industry revenues. Other sectors that could gain significantly are wholesale and retail (£17 billion a year), manufacturing (£9 billion a year), financial services (£9 billion a year) and transportation and storage (£8 billion a year). While the potential gains for SMEs are geographically spread across the UK, the opportunity is greatest in London (a potential £48.5 billion boost). If you belong to any of these industries and have ambitions to grow, you must extract maximum value from digitizing your business’ customer experience, workforce and operations.
Commenting on the report, Peter Kelly, managing director, Virgin Media Business, said: "The incredible pace of change means there is no place to hide, or room to stand still. Any business with ambitions to grow through digital needs to invest in the right technology and skills, while the Government and industry have to deliver the infrastructure and support to help them."
We feel that the world is rapidly changing and burying your head in the ground will not make things disappear. When all is said and done, it won’t be a matter of whether the value will be created in the coming years, but rather who will capture the lion’s share. If you don’t prepare, you will be overtaken by the more nimble digital players. Digital is here to stay.