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Lloyds Bank UK Business Digital Index 2016

Benchmarking the digital maturity of small businesses and charities in the United Kingdom




The UK Business Digital Index 2016 uses actual online behavior and survey analysis of small businesses and charities to understand their attitudes toward and usage of digital technology. This year the Digital Index shows an increase in overall levels for both small businesses and charities. However, the survey reveals there are still 1.4 million small businesses and 98,000 charities without basic digital skills.

The Index demonstrates the clear link between digital maturity and organisational success, not just in terms of increased revenue, but also in costs saved, efficiencies gained and, most importantly, time re-gained. A large number (65 percent) of small business have used digital to cut costs, and 87 percent of charities say saving time is one of the key advantages to being online. Why, then, are some organisations not doing more online when the main benefits to those already online have remained consistent?





Key Findings/Analysis

The key findings of the UK Business Digital Index 2016:

  • Good progress seen in overall digital maturity for small businesses and charities: Digital maturity index scores have risen by nine points—to 54—since 2015.

  • Charities are making progress, but still have an opportunity to improve their digital maturity: Overall digital maturity has risen by six points in the last 12 months.

  • Increase in use of social media: 1.4 million small businesses and 72,000 charities believe a social media presence can help generate higher revenues and donations.

  • Link to success: Nearly three in five small businesses and charities say increasing sales is a key advantage to using digital.

  • Small businesses are not taking full advantage of exporting: Only one in five organisations are using digital to trade overseas.

  • Shift in advice preference: While the use of free and peer-to-peer advice including GOV.UK has significantly increased, there are still areas for improvement.

  • Cyber security emerges as a new opportunity: As uptake and use of digital increases, so does the opportunity to develop the right skills to help protect organisations online.

  • Opportunity for sole traders to further embrace digital: There is a significant opportunity here to develop digital skills.

  • Positive regional results for small businesses: The Index scores have increased across all regions in the past 12 months.

  • Index demonstrates equality for gender: The findings reveal little difference between male and female decision makers in terms of Index score, and no significant difference in terms of basic digital skills.


What actions can small business and charity stakeholders, policymakers and partners take based on the UK Business Digital Index?

  • Focus on the realisation of benefits: For small and medium enterprises, saving money, accessing a wider audience, becoming more efficient and saving time are compelling benefits of digital maturity.

  • Follow a partnership approach to help drive targeted messaging: Partners can take advantage of the opportunity to create syndicated content and utilise the existing channels that small businesses and charities use, to encourage them to improve their digital skills.

  • Focus on the smallest of small businesses: The 2016 Index shows that the smallest businesses, those with a single employee, have the lowest level of basic digital skills and maturity, and therefore the most to gain from advice and guidance.

  • Use digital to help drive international trade: The analysis shows there is significant opportunity to do more business overseas, but organisations need support and guidance to help them reach these new markets.

  • Continue to support charities in improving their digital capabilities: Charities need to be made aware of how digital maturity can truly benefit their organisation from a funding and cost perspective.

  • Support organisations in developing their cyber security skills: Understanding how to use digital safely and the associated benefits will encourage organisations to do more online.