Digital Britain report – impact on UK small businesses

Last week’s Digital Britain report will have a positive effect on many UK small businesses, but could be considered a baby step in the right direction for those aiming to compete internationally. The Government outlined its commitment to ensure universal access to faster broadband, which will make a huge difference to small business owners, particularly those based in rural areas. Many owners rely on the internet to conduct their business, and in the report, the government acknowledges that entrepreneurs are using digital technology to “revolutionise how they operate through online marketing and sales, improving accounting and internal procedures, online tax returns and record keeping and payments.”

The ability to improve accounting and internal procedures is more important than ever in the recession where small businesses are fighting for survival. In addition, as more financially-savvy consumers opt to spend online in search of the best deals, the internet is increasingly a vital channel that small businesses can use to reach a wider audience with their products and services.

Research by the Information, Technology and Innovation Foundation (ITIF) suggests that investment in digital infrastructure has a multiplier effect on jobs, productivity, competitiveness and quality of life. ITIF suggests that a nominal £15bn investment in ICT infrastructure would generate 700,000 jobs, of which 360,000 would be in small businesses.

This recommendation of 2mbps is a step in the right direction towards better internet access for all small businesses, however it is not enough to help those small companies that want to become internationally competitive. The Government needs to foster a culture of entrepreneurialism in the UK for the country’s long-term economic success, but it cannot hope to do this without providing businesses with the right tools such as high-speed broadband access.

Indeed, some leading industry commentators have also argued that the report does not go far enough. The Federation of Small Businesses (FSB) describes the expected 2mbps by 2012 as ‘lacking ambition’. John Wright, National Chairman of the FSB, stated that “if small businesses are to compete, the Government must take bolder action.  Around 60 per cent of small businesses want a minimum broadband speed of 8mbps.”