UK Business and Charity Digital Index 218 The fifth edition Benchmarking the digital capability and skills of UK SMEs and charities
Introduction The report contains research from 1,5 SMEs and 5 charities into attitudinal behaviours and uses of digital within their organisations 1. Graph shows the percentage of a working week that is being saved through digital, split by SME and charity, 218 To ensure published findings are statistically and meaningful throughout the report, care has been taken to only reference within the body of the report those year-on-year changes that meet statistically significance criteria. Please note that within graphs, figures have been displayed as they are, meaning that minimal differences might not be statistically significant. 25 21% 16% SME Charity 2
2. Graph shows the percentage of SMEs that have benefitted from using online facilities, split by digital capability, 218 8 67% 55% 46% 46% 47% 48% 51% 36% 39% 41% 33% 37% 11% 2% 26% 12% 16% 14% 16% 16% 24% 19% 23% 5% Key None of these The ability to trade overseas Can use my mobile to take payments Increased sales Wider geographic coverage More effective marketing Simplified process of taking payments Cost savings Attracting more customers Increased feedback and interaction with customers Can use my mobile to do my business on the move Saving time High Low 3
3. Graph shows the percentage of SMEs that have said they are saving a proportion of their time through being online, since 214 35 SMEs are 2.3 times more likely to be saving time than in 214 3% 27% 13% 13% 18% 214 215 216 217 218 4
4. Graph shows the potential uplift in UK SME turnover if all SMEs developed high digital capability, split by employees band, 218* Total 84.5 5 to 249 1 1 to 49 21.5 2 to 9 18.8 Sole Trader 43.3 2 billion 4 billion 6 billion 8 billion 1 billion *It is acknowledged that the correlation between digital capability and turnover is also impacted by external factors. 5
5. Graph shows the percentage of SMEs that have benefitted from using online facilities, 218 8 62% 52% 36% 37% 41% 42% 44% 44% 46% 24% 15% 18% None of these The ability to trade overseas Can use my mobile to take payments Increased sales Wider geographic coverage More effective marketing Simplified process of taking payments Attracting more customers Cost savings Increased feedback and interaction with customer Can use my mobile to do my business on the move Saving time 6
6. Graph shows the percentage change in proportion of SMEs who benefit by trading overseas online, split by nation and region, 218 vs. 217 8 63% -32% -3% -28% -28% -23% -22% -14% -14% -43% -55% -53% -8 Northern Ireland North East West Midlands East England South West Scotland Wales South East London North West Yorkshire and Humberside East Midlands 7
7. Graph shows those SMEs who are using digital to trade overseas, split by sector, 218 vs. 217 5 4% 15% 13% 9% 9% 2% 21% 12% 13% 11% 11% 16% 3% 26% 2% 21% 22% 12% 32% 26% 35% 31% 29% 29% Agriculture/ Forestry/ Fishing Real Estate Construction Education Transportation and Storage Arts/ Recreation Health/ Social Work Accommodation/ Foodservice Wholesale/ Retail/ Repair Administrative and Support Service activities Financial/ Insurance/ Info/ Comms Manufacturing Key 217 218 8
8. Graph shows the percentage of SMEs that have benefitted from using online facilities, 218 vs. 217 8 74% 62% 53% 52% 55% 54% 53% 55% 44% 48% 36% 37% 41% 42% 44% 44% 46% 52% 15% 23% 18% 26% 24% 1% None of these The ability to trade overseas Can use my mobile to take payments Increased sales Wider geographic coverage More effective marketing Simplified process of taking payments Attracting more customers Cost savings Increased feedback and interaction with customers Can use my mobile to do my business on the move Saving time Key 217 218 9
9. Graph shows SMEs average turnover if they have the following skills: Cloud-based IT systems, online accounting software and digital training tools vs. those with none of these skills, 218 1. Graph shows SMEs average turnover if they have the following skills: social media and marketing expertise, e-commerce specialists, search engine optimisation/search engine marketing and customer data analytics vs. those with none of these skills, 218 11. Graph shows SMEs average turnover if they have the following skills: organisation website, Instagram and organisation Facebook page vs. those with none of these skills, 218 3, 3, 26, 3, 236, 219, 133, 156, 142, All/Most None All/Most None All/Most None 1
12. Graphs shows SME s confidence that they can succeed in the digital world vs. movements in their turnover over the past two years, 218 13. Graph shows the percentage of SMEs that say they are already doing as much as they want to online, since 214 4 37% Decreased 55% 45% 31% Stayed the same 57% 43% 16% 16% Increased 72% 28% 12% Key 214 215 216 217 218 Confident Not Confident 11
14. Graph shows the percentage of SMEs in Segment 1 that say they are already doing as much as they want to online, since 214 15. Graph shows the average percentage of digital transactions per SME, since 214 2 18% 5 49% 47% 46% 1% 41% 42% 7% 6% 5% 214 215 216 217 218 36 214 215 216 217 218 12
16. Graph shows SME responses to the question Do you prefer to transact digitally or not?, 218 17. Graph shows the percentage of SMEs who feel fraud and security concerns have stopped them from doing more online, split by employee band, 218 25 17% 22% 22% 2% 3% 14% 53% Key No preference No Yes Sole Trader 2 to 5 6 to 9 1 to 249 13
18. Graph shows the average figure debited through cheques by SMEs, split by age, 217 19. Graph shows the percentage of SMEs and whether they have or do not have data analytics skills, split by turnover status, 218 6, 57, 1 48% 63% 15, 52% 37% SMEs aged 5+ SMEs aged under 5 years Does not want these skills and wants in the future Already has this skill Key Turnover decreased/stayed the same Turnover increased 14
2. Graph shows the percentage of SMEs that are confident they can succeed in a digital world and whether they have or do not have data analytics skills, 218 21. Graph shows the percentage of SMEs that have mobile-optimised websites and services, 218 1 91% 82% 74% 18% 23% more likely to feel confident if they have data analytic skills Key Has mobile-optimised websites and services Does not have mobile-optimised websites and services Does not want these skills and wants in the future Already has this skill 15
22. Graph shows the percentage of SMEs that have accessible websites, split by the UK average and employee band, 218 9 8% 4% 4% 2% 1% Average UK SME Sole Trader 2 to 5 6 to 9 1 to 249 16
23. Graph shows the percentage of SMEs that have accessible websites, split by the UK average and industry sector, 218 8 7% 6% 5% 5% 5% 4% 4% 4% 3% 3% 3% 3% 2% 1% Average UK SME Agriculture/ Forestry/ Fishing Construction Administrative and Support Service activities Financial/ Insurance/ Info/ Comms Real Estate Wholesale/ Retail/ Repair Manufacturing Transportation and Storage Accommodation/ Foodservice Arts/ Recreation Health/ Social Work Other Education 17
24. Graph shows the percentage of SMEs who use social media and who s turnover has increased in the past two years, split by employee band, 218 25. Graph shows sole traders turnover if they have at least one of the following skills: Cloud-based IT systems, online accounting software or digital training tools vs. those who have none of these skills, 218 25 88, 86, 21% 17% 12% 75, 5% Sole Trader 2 to 5 6 to 9 1 to 249 68, None At least one 18
26. Graph shows potential uplift in individual SME turnover if they were to develop high digital capability, split by employee band, 218 27. Graph shows the percentage of SMEs who turn to friends, relatives and colleagues for advice and training on technology, split by employee band, 218 7, 697, 45 42% 37% 37% 3% 32% 246, 63, 24, Sole Trader 2 to 9 1 to 49 5 to 249 Average UK SME Sole Trader 2 to 5 6 to 9 1 to 249 19
28. Graph shows the percentage of SMEs that have robust website security, since 214 8 72% 62% 66% 41% 32% 214 215 216 217 218 2
29. Graph shows the percentage of SMEs that are seeking to acquire the following digital skills in the next two years, 218 25 2% 17% 17% 18% 18% 15% 15% 13% 9% Agile methodology E-commerce specialists Customer/ Data analytics Digital strategy and leadership Digital content and design Social media and marketing Digital Technology and Infrastructure Search engine optimisation/ Search engine marketing Cybersecurity 21
3. Graph shows the percentage of SMEs who understand what cybersecurity is and whether they; want this skillset in the future, do not want this skillset or already have this skillset, 218 31. Graph shows how likely SMEs are to be interested in receiving free digital skills training from a larger organisation with the appropriate expertise, split by digital capability, 218 6 1 51% 49% 26% 21% 24% 16% 11% Want in the future Do not want Have already Likely Very likely Not likely Not likely at all 22
32. Graph shows how likely SMEs are to be interested in receiving free digital skills training from a larger organisation with the appropriate expertise, split by SME age, 218 33. Graph shows how likely SMEs are to be interested in receiving free digital skills training from a larger organisation with the appropriate expertise, split by digital capability, 218 1 7 65% 42% 4% 44% 51% 46% 21% 2% 2% 25% 25% 17% 15% 15% 17% 21% 9% 1% 12% 19% 2% 2% 15% 5% Less than three years 3 to 4 years 5 to 9 years 1 years or more Likely Very likely Not likely Not likely at all Key Not likely at all Not likely Likely Very likely Key High Low 23
34 (i). Graph shows the percentage of SMEs that understand the following skills, split by digital capability, 218 8% 66% 63% 56% 49% 49% 42% 37% 36% 67% 43% 71% 52% 76% 53% 21% 12% 25% 25% Key High Low Blockchain Mobile strategy and delivery Machine Learning and Artificial Intelligence Robotics Connected devices Virtual Reality 3D Printers Cloud services e.g. Accounting, HR etc. Cybersecurity 34 (ii). Graph shows the number of SMEs that understand the following skills, split by digital capability, 218 6% 42% 48% 35% 35% 28% 2% 11% Blockchain 17% Mobile strategy and delivery 16% 1% Machine Learning and Artificial Intelligence 13% 5% Robotics 16% Connected devices 16% 7% Virtual Reality 2% 13% 3D Printers 16% Cloud services e.g. Accounting, HR etc. Cybersecurity Key High Low 24
35. Graph shows the percentage of SMEs with full Basic Digital Skills, split by sector, since 217 36. Graph shows the percentage of SMEs who either want, do not want or already have digital strategy and leadership skills, split by sectors, 218 7 66% 55% 8 73% 48% 66% 58% 52% 58% 61% 25% 12% 18% 15% 16% 17% Industry Retail Services Has already Wants in future Does not want Key 217 218 Key Industry Retail Services 25
37. Graph shows the percentage of SMEs that think none of their workforce will be replaced by AI/Robotics in the next five years, split by employee band, 218 38. Graph shows the percentage of SMEs that think none of their workforce will be replaced by AI/Robotics in the next five years, split by turnover, 218 1 1 79% 71% 53% 44% 41% 35% 28% 24% 2% 29% 2% Average UK SME 1 to 9 1 to 49 5 to 99 1 to 249 Less than 1M 1M - 1.9M 2M - 4.9M 5M - 9.9M 1M - 14.9M 15M - 25M 26
39. Graph shows the percentage of SMEs that think none of their workforce or over 5% of their workforce will be replaced by AI/Robotics in the next five years, split by nation and region, 218 8 7% 64% 58% 45% 51% 46% 59% 49% 55% 35% 38% 2% 17% % 1% 1% 2% 2% 3% 3% 3% 3% 4% 5% North East North West East England Wales Northern Ireland Yorkshire and The Humber West Midlands South East South West East Midlands Scotland London Key Over 5% of their workforce None of their workforce 27
4. Graph shows SME Index scores, split by age, 218 vs. 217 41. Graph shows the percentage of SMEs who can do the Problem Solving Basic Digital Skill, split by employee band, 218 vs. 217 1 8% 76% 89% 85% 7 62% 58% 61% 61% 6% 57% 55% 51% 58% 55% 67% 68% Less than 3 years 3 to 4 years 5 to 9 years 1 years or more Sole Trader 2 to 5 6 to 9 1 to 249 Key 217 218 Key 217 218 28 28
42. Graph shows the percentage of charities who are offline, since 214 3 24% 7% 3% 4% 1% 214 215 216 217 218 29
43. Graph shows the percentage of charities who can do all tasks within the Creating Basic Digital Skill, since 214 44. Graph shows the percentage of charities who can do all tasks within the Transacting Basic Digital Skill, since 214 3 25% 3 14% 12% 12% 6% 6% 2% 4% % 1% 214 215 216 217 218 214 215 216 217 218 3
45. Graph shows the percentage of charities who have Facebook and Twitter accounts, since 214 46. Graph shows the percentage of charities who use social media and whether their turnover has increased, stayed the same or decreased over the last two years, 218 6 43% 44% 51% 6 51% 57% 48% 46% 31% 32% 35% 37% 2% 21% 16% 8% 14% 214 215 216 217 218 Increased Stayed the same Decreased Key Twitter Facebook Key 217 218 31
47. Graph shows the percentage of charities who see saving time as the main benefit of being online, since 214 48. Graph shows the percentage of charities that don t see any benefits to being online, since 216 35 2 18% 3% 14% 23% 25% 22% 1% 13% 214 215 216 217 218 216 217 218 32
49. Graph shows the charities who said saving time wasn t a benefit of being online and how much of their working week they are saving, 218 6 53% 86% have saved up to 25% of their working week 14% 19% 11% Less than 5% 5% 1% 11% 25% 26% 5% 51% 75% 76% 1% 3% % 33
5. Graph shows the percentage of charities who think being online isn t relevant to them, since 214 5 32% 27% 33% 33% 31% 214 215 216 217 218 34
51. Graph shows the percentage of charities in Segment 1 and what has stopped them from doing more online, 218 vs. 217 7 61% 38% 33% 2% 25% 24% 19% 25% 3% 3% 1% 7% 6% 6% 13% 8% 8% 8% 11% 7% 14% 14% 14% 8% 14% 1% We are in the process of doing more Key 217 218 We use word-ofmouth Nothing, feel that we are doing all we can online Technical issues No time to set up and go online Prefer face-to-face transactions Cost of investment unknown Concerns Not worth the about investment information security/fraud Poor connectivity e.g. slow speeds, no superfast broadband Too expensive Lack of staff digital/online skills Just not interested in going online Being online is not seen as relevant for our charity 35
52. Graph shows the percentage of charities that see being online relevant to them, split by those in lowest digital capability Segment 1, since 214 8 24% increase since 214 67% 54% 56% 39% 24% 214 215 216 217 218 36
53. Graph shows the growth in digital usage, split by SME and charity, 218 vs. 214 16 14 14 15 12 1 1 8 7 6 5 4 3 2 2 3 3 2 2 1 1 1 1 1 Digital training tools Cloud-based IT systems Online accounting software Make payments to suppliers Provide information/ advertising and promotion through web pages Use Government services Internet Banking Search for information Key Charities (number of times more likely to use) SMEs (number of times more likely to use) 37
54. Graph shows the percentage of charities that have or do not have accessible websites, 218 55. Graph shows the percentage of charities that have or do not have mobile-optimised websites and services, 218 1 95% 1 92% 8% 5% Accessible Website Not accessible Website Has mobile-optimised websites and services Does not have mobile-optimised websites and services 38
56. Graph shows what percentage of charities operating budget is being spent on building digital skills, 218 vs. 217 1% 86% 83% 7% 8% 5% 5% 1% 2% % 1% % 1-2% 3-5% 6-1% Over 5% Key 217 218 39
57. Graph shows the charity Index score, split by employee band, since 214 6 5 51 48 5 46% 4 39 41 4% 32 3 26 2 23 1 214 215 216 217 218 Key to 9 1 to 249 4
58. Graph shows the percentage of SMEs that see being online relevant to their business, split by those in the lowest digital capability segment, since 214 8 31% increase since 214 71% 54% 6% 51% 57% 214 215 216 217 218 41
Welcome to the fifth year of the Lloyds Bank Business and Charity Digital Index Find the report and appendices at Lloydsbank.com/businessdigitalindex Tweet us at @LBGDigi #BizIndex18 #BasicDigitalSkills With five years worth of data this report is the only measure of its kind, providing valuable insight into the digital behaviours and attitudes of organisations across the UK a Email the team at DigitalSkillsInclusion@lloydsbanking.com 42