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The Progressive Policy Think Tank

IPPR - Small businesses face ‘digital divide’

IPPR - Small businesses face ‘digital divide’

  • Embrace of digital key to initiatives such as the Northern Powerhouse succeeding, think-tank finds.

  • Official figures show that for every £1 spent on digital infrastructure such as broadband, there is a £5 return.

  • But focus needs to extend to ‘soft’ areas such as upskilling SMEs on digital savviness, in addition to ‘hard’ infrastructure.

It’s dubbed the next industrial revolution.

But Britain’s small businesses are missing out on the Digital Revolution, according to a leading think-tank’s analysis.

Start-ups and established SMEs are a vital part of the UK’s reputation for innovation, an IPPR North report finds.

But a double-whammy of patchy ‘hard’ infrastructure such as broadband connectivity and lack of ‘soft’ infrastructure like web skills risks UK competitiveness, Unbuffering Business argues.

Unlike larger businesses, which are exploiting digital opportunities well - for instance in moving to e-commerce - smaller businesses lack the time and capacity to do more online.

To address this, the report calls for Local Enterprise Partnerships to provide better support to businesses, as part of their role in developing local economies.

It sets five ‘tests’ for each Local Enterprise Partnership, to ensure that they are doing everything they can to encourage small businesses to make the most of the opportunities afforded online.

The findings recommend that BT Openreach publishes all broadband speeds across England and Wales in a bid to boost transparency and ultimately drive up speeds – particularly in business parks and often-overlooked rural areas.

The report also looks in detail on creating a digital powerhouse in the North of England. This is key to the North’s ongoing resurgence, the analysis notes: the Northern Independent Economic Review highlights digital as one of the North’s key assets, and realising this is key to the Northern Powerhouse's success.

Jack Hunter, report co-author and researcher at IPPR North, said:

“The UK - and the North of England in particular - pioneered the first industrial revolution. Now more than ever, we must focus on unleashing our digital powerhouse potential.

“There is so much ambition, entrepreneurship and dynamism among small businesses. But this is hampered by a double-whammy of patchy broadband access and lack of digital training opportunities that work for everyone: from the digital start-up struggling to become viable, to established firms looking to reach new customers online.

“Addressing this would help get the UK economy firing on all cylinders and further our reputation as a world-leader in innovation, creativity and commerce.”



Ash Singleton, IPPR North, or 07887 422 789


The report is available to read here: