Lauren Parker
In 2014, the Federation of Small Businesses published a paper entitled ‘The fourth utility’ which discussed the importance of broadband and mobile services to small businesses. Their latest report, Reassured, Optimised, Transformed: Driving digital demand among small businesses, provides a better understanding of how small businesses actually use the internet and the barriers that stop them from doing more online or taking up superfast broadband.

fsb report_0

To do this, the Federation of Small Businesses highlighted a series of key questions they wanted their research to answer:

  1. What benefits do small businesses currently get from using digital communications services?
  2. What barriers stop small businesses from either doing more online or taking up superfast broadband?
  3. What policy changes from Government, Ofcom, industry and business groups are necessary to address these barriers and drive the demand for digital technology?

Evidence gathered from small businesses across the country, using both surveys and in-depth interviews, has addressed these key questions and allowed the FSB to outline a series of policy recommendations to help small businesses increase their use of digital communications services and in turn benefit from doing more online.

Here are their key findings

The key benefits of using digital technologies fall into 3 main categories:

  • Business reassurance: for some, the key benefit is simply having a new and reliable way of connecting to customers, suppliers and employees.
  • Business optimisation: for others it is the time and cost-savings an internet connection can bring to business operations.
  • Business transformation: for the more digitally advanced businesses, being online provides a springboard to do new and different things in a way that helps the business expand.

Small businesses view the internet as critical and are increasingly taking up superfast broadband

In fact, almost all (99%) of small business owners rate the internet critical or highly important to business.

27% of small businesses already access the internet via a superfast connection, while a further 46% would like to upgrade to superfast broadband in the future.

Mobile phones are increasingly becoming a key element of connectivity for small business owners

70% of small businesses surveyed viewed access to mobile voice and data services as either being critical or very important to their business.

Despite the positive evidence of small businesses using digital services to build their business, there remain a number of barriers preventing many other small businesses being able to harness the benefits of being digitally connected

  • Cost is a key concern – in areas where superfast broadband is available, cost was cited by 51% of small businesses as the main barrier to upgrading.
  • Availability of the infrastructure needed by small businesses.
  • A lack of relevant digital skills was not seen as a significant issue, however, many small businesses felt they did not have sufficient information to comfortably interact within the telecoms market.
  • Many small businesses (13%) feel they are doing all they need to do online.
  • Cyber security was raised by some small businesses, although less so than other issues.

The following recommendations from the Federation of Small Businesses are just a few of the policy interventions they feel are necessary to highlight the benefits of taking up online services and stimulate demand more effectively:

  1. Increased action to drive awareness of superfast availability.
  2. A new Community voucher scheme to supersede the Connection Voucher Scheme.
  3. Further steps to improve mobile coverage.
  4. Greater information transparency to allow for better comparison of products.

You can read the full report from the Federation of Small Businesses here.

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