Digital Transformation is crucial if SMEs want to realise their full growth potential. A report from Virgin Media O2 Business and Cebr has revealed that if all British-based firms had increased their digital technology usage in 2021, the economy could have seen a staggering £111 billion boost in turnover by 2023. In this feature, experts from Virgin Media O2 Business and Cebr explore the benefits of Digital Transformation based on the report findings.
Virgin Media O2 Business and Cebr have published a new report, ‘The economic and social benefits of digitalisation’, revealing the significant growth potential UK businesses have left untapped. The report highlights that if all British-based firms had increased their digital technology usage in 2021, the economy could have seen a staggering £111 billion boost in turnover by 2023.
Analysing the benefits of digitalisation, the findings expose a key challenge to unlocking digital growth: a perception gap between businesses’ confidence in their digital readiness and the reality of their digital progress. Across all British-based firms, three in four (75%) have not significantly increased their digital usage since 2021, yet they still identify as having a ‘strong digital culture’.
From culture to capital: Strong digital culture drives productivity
The report reveals over four in five (81%) organisations with a strong digital culture feel their workforce is well-prepared for the future, compared to just over two in five (43%) of those with weaker digital cultures. A strong digital culture embraces tools to boost performance and financial results, enhance customer and employee satisfaction, and create a positive societal impact.
Digital leaders – organisations actively investing in digital solutions – experienced 12% turnover growth, compared to only 5% for their counterparts. On average, they also more than doubled the productivity growth of those lagging in digital adoption. Additionally, Gross Value Added (GVA) grew by 8% for digital leaders, while their peers saw no growth at all. This illustrates digital culture is not just a competitive advantage, but a crucial component of business success.
Looking to the future
The shift to digital technology is not just an economic imperative – it has a broader societal impact. Increased tech adoption between 2021 and 2023 could have created 676,000 new jobs, including over 313,000 new roles in small- and medium-sized companies. This demonstrates the potential of digital culture to drive significant societal benefits through job creation and economic growth on a larger scale.
“UK organisations are sitting on a huge opportunity that’s waiting to be seized. The data shows that many businesses have already made significant investments in digital technology, but now they just need to put it to work by focusing on building a stronger digital culture,” said Bruce Daisley, named as one of the world’s top 10 voices on the future of work by LinkedIn and a leading authority on workplace culture. With a career running YouTube in the UK and serving as Twitter’s Vice President for Europe, the Middle East, and Africa, Daisley adds that: “This isn’t just about buying tools – it’s about integrating them effectively into everyday practices. Businesses have dazzling new opportunities to maximise their tech, but we’re seeing that many firms have been slow to implement permanent changes. Now is the moment.”
Jo Bertram, Managing Director at Virgin Media O2 Business, said: “At Virgin Media O2 Business we understand the potential digital innovation has to influence progress both socially and economically. There’s a £111 billion boost to the UK economy to be unlocked for those organisations who build strong digital cultures, where technology underpins the way people connect and collaborate with colleagues and customers to drive business outcomes.”
Nina Skero, CEO at Cebr, said: “We recognise the importance of our latest research in guiding UK organisations through the rapidly evolving digital landscape. Our findings clearly illustrate how digital leadership is directly linked to higher turnover, increased productivity and better performance across every economic metric. We encourage UK leaders to use this report as a guide to navigate the challenges and opportunities of a digital workplace. By prioritising cultivating a strong digital culture, organisations can unlock their full potential and drive sustained growth for the UK economy and wider society.”
Ross Pearson, Head of Small Enterprise Sales at Virgin Media O2 Business, highlights how the research shows the undervalued part that SMEs play in the UK economy.
He said: “With SMEs accountable for over 50% of the £111 billion revenue opportunity between 2021 and 2023, effective digital investment across SMEs could create a significant positive impact on the economy.
“SME business leaders can gain an advantage over competitors by investing in digital technologies. If all SMEs were to spend just 4% more on digital, they could boost revenue by 11.9% and job creation by 6.5%, representing 313,000 potential new jobs.
“However, while SME’s potential for digital growth is massive, there is work to be done to realise this potential. SMEs lag 3% behind larger organisations in developing a strong digital culture. Even when organisations believe their digital culture is working effectively, our findings show that many companies may be overvaluing their perceived strengths. With three in four organisations not significantly increasing their digital usage since 2021, digital stagnation is creating a credible risk for all organisations of falling behind in a rapidly digitising society.”
Pearson does point out that this isn’t unique to SMEs as nearly all businesses face challenges in Digital Transformation, with 92% of organisations admitting to struggling with it. But he said SMEs should be looking to leverage their size and agility to overcome barriers and accelerate change processes that may require more time to implement at larger organisations.
Pearson added: “Introducing targeted training to upskill staff as new tools are rolled out will accelerate the benefits of new tech helping to embed a digital culture throughout the organisation by ensuring understanding of the tools value across the team.
“Importantly leaders should recognise the wider benefits of continuous improvement. Providing more effective digital training and tools can immediately improve business efficiency, staff skillsets and workforce happiness. Yet, with digital capabilities constantly advancing, regular horizon scanning is crucial to identify emerging opportunities for further growth.
“As organisations move into a continuous improvement cycle, the knock-on impact of more effective digital tools and higher-skilled staff is increased growth and job creation. This not only benefits the organisation you’re in but also your customers and the local communities in which you work. With a constantly expanding opportunity to boost the wider economy through digital adoption, SMEs should seize the opportunity to accelerate digital change. Why wait?”