The Digital Postcode Lottery

The digital divide in the UK is causing businesses to fall behind in the race to turn operations digital. Lack of funding and low numbers of apprenticeship opportunities are just some of the factors affecting SMEs in certain areas. 

Here at GAIN LINE, we want more action to be taken to help SMEs and young people. The ‘digital postcode lottery’ looks to raise awareness of the digital discrepancies across the UK, and what factors are causing these digital black-spots to find out where the help is needed.

The research was conducted from multiple sources to understand the barriers SMEs face in digitisation and growth. Sources included: Innovate UK’s Smart Grants, Apprenticeships’s digital apprenticeship vacancies and a survey of 1,000 UK SMEs commissioned by GAIN LINE.

The regions most affected

Our research shows that SMEs outside of London are 20% less likely to receive funding for projects that can help them innovate the business. 

Analysis of Innovate UK’s Smart Grants distribution shows that over a third of those awarded were organisations based in London and a sixth in the South East. Comparatively just 2% of SMEs in Wales and the North East were awarded funding, and 3% in Scotland. 

Translating to a total of just £750,000 out of £25 million available of Smart Grants, the North East, Wales and Scotland are being disproportionately affected and businesses in these regions will find it much more difficult to implement new digital processes which can save them time and money.

At GAIN LINE, we have a track record of saving businesses money by digitising their operations. Inline with saving SMEs thousands of pounds, we ensure operations are conducted to the highest efficiency and speed, no matter what region they are located.

Digital tools when we needed them most

The long lasting effects of the pandemic are ever present within SMEs and in particular the more rural areas of the North East and Scotland. 

In relation to the research carried out, we can see that COVID-19 pushed many SMEs to use digital tools. Around 74% admitted that the pandemic resulted in the business using digital tools to help operations continue during those testing times. 

Almost 30% of businesses said that this uptake was down to the current government restrictions at the time, as face to face meetings became limited and offices began to close. Additionally, 11% of businesses then went on to agree that the expectation of continuing to work from home enabled the opportunity for digital tools to be utilised within day to day operations.

Despite this, our research showed that there is a direct link between lack of funds and a lack of uptake in digital tools to help with business operations during the pandemic, with more than one in ten in Scotland and the North East lacking necessary digital tools during this time.

This once again shows the affects the digital divide has had on businesses in regions that are operating sub-optimally.

Disadvantage to the youth

London and the south dominate other businesses across England in funding because of the digital divide, but it also puts employees in these areas at a disadvantage when looking at employing the next generation of talent in the industry.

Research into Apprenticeships’s Digital Apprenticeship vacancies of the last 12 months showed that 22% of the vacancies were located in London and 18% in the South East, with just 5% in the North East.

This lack of opportunity, and disproportional disadvantage, affects young people and takes away the opportunity to improve thinking and technical skills required in the industry.

Developing digital skills in young people is crucial for their future careers. But as well as being necessary for personal progression, bringing in younger generations helps to keep businesses fresh with new outlooks, and new technical skills.

The takeaway

Rural commercial properties are much more affordable than their city-centre equivalents in places like London. Whilst this could be attractive to small business owners looking to keep overheads down, the lack of apprenticeships, lower opportunities for digital grants, and slower internet speeds make it difficult for businesses to thrive.

It’s a missed opportunity for both the smaller businesses and the local economies, which could greatly benefit from attracting more small businesses to the area.

How we can help

The distribution of the sources in this research paints an accurate picture of the digital divide we currently have in Britain. 

While the South and larger cities are thriving in terms of technology and innovation, business owners in the North East of England, Scotland, Wales, and more rural locations are missing out. Better messaging about digital opportunities is needed to target those these areas, as well as funding initiatives.

At GAIN LINE, we help SME organisations grow by digitally optimising their operations for improved efficiency, better accuracy and lower operational costs.

Many SME owners and those in senior positions are unaware of just how much time and money can be saved by digitising operations. 

For some, it can seem daunting to make the change, but ditching the paper offers better visibility of an organisation’s employees and inefficiencies which in turn provides valuable insight in how to run it better. Businesses that use digital services agreed that this method in day to day operations not only saves money but it increases revenue, improves efficiency, working capabilities and staff morale.