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Small businesses and the growth of the digital industry

This month, two very interesting reports came out, which we want to share with small and medium businesses. The first is the Tech Nation 2016 report, which looks at how the digital economy has grown between 2010 and 2014. The second report is from IDC, sponsored by SAP, and focuses on small and medium enterprises and the digital transformation. Keep on reading for a summary of the key findings and how they affects your business.

UK digital industry growing 32% faster than wider economy

Tech City UK, in partnership with Nesta, has conducted one of the most comprehensive research projects on the digital economy in the UK. The Tech Nation 2016 report goes into how the digital tech economy has grown, zooming in on the UK’s digital technology ‘clusters’.

There are 58,000 digital tech businesses across the UK, and they have grown 32% faster than the rest of the economy over the period of 2010-2014. The largest sub-sector in the UK is app and software development, which makes up 16.7% of the market. The report shows that there are some exciting new digital sub-sectors developing in the UK, like Edtech, Fintech and Healthtech.

Non-tech sectors are becoming more digital as well. The frontrunner of these ‘traditional’ sub-sectors, is the marketing, PR and design sector, of which 45% have now have become digital tech businesses.

Jobs in the digital tech industry

The digital tech economy is transforming non-digital industries, like wholesale and retail, to become more digital. Of the 1.56 million digital tech jobs, 41% are within traditional industries. An example of a job like this is an e-commerce software developer at a clothing retailer.

tech nation

Tech Nation 2016, February 2016. Tech City, in partnership with Nesta.

From 2011 to 2014, job creation in the digital economy grew with 11.2% - which is almost three times faster than the rest of the economy.

And it’s definitely not just London where all this happens. 80% of these digital jobs are found outside of London, with the biggest tech clusters in Manchester, Birmingham, Reading & Bracknell, and Bristol & Bath.

Challenges the digital industry faces

The report also highlights some of the challenges that the UK is still facing. The demand for digital talent shows no signs of slowing down. The average advertised salary is at £50,000, which is 36% higher than the national average. 43% of digital entrepreneurs stated that they have difficulties finding skilled digital workers.

The report also mentions that the financial aspect is still a big challenge for many businesses. 39% of the entrepreneurs state that they face difficulties as a result of limited access to finance.

With high-sped connectivity a main priority for many digital tech businesses, unevenly distributed broadband services still cause many issues. 28% of digital tech businesses report that they find the digital infrastructure a challenge.

SMEs in digital industry

Now how does all this apply to your business? Another study that came out this month focuses on how small and midsize enterprises are adapting to digital transformation. The report by IDC, sponsored by SAP has compared the data of 3,210 SMEs, varying between 10 and 999 employees. It looks at how collaborative and management software, e-commerce and cloud computing can help SMEs grow.

As a main result of the research, we learn that SMEs embracing digital technology show faster revenue growth than companies that have not. Over half of fast-growing SMEs are actively engaged with digital transformation.


Thriving in the Digital Economy, February 2016. IDC, sponsored by SAP.

An interesting result from the report shows us that especially smaller companies underestimate their digital transformation progress. They don’t always realise that collaboration software, e-commerce and other resources are part of it. Conversely, midsize companies often overestimate their digital efforts.

Faster growing businesses are more positive about the benefits of digital transformation. New technology makes it easier for smaller businesses to compete with larger firms. Performance measuring tools, like your Trendzer analytics dashboard or social media data, provide you with unique customer insights.

Digital transformation guidance for small businesses

The report ends with some great advice for small businesses that are cautiously moving towards digital transformation:

  • Find out how your business is doing compared to industry standard practices. In what aspects can you develop?
  • Can the addition of new software or other resources improve your processes? The study advises to tap into IT partners who can identify ways to help your business run simpler, for both yourself and your customers.

Trendzer transforms small businesses

Trendzer’s goal is to make digital transformation easier for small businesses. Instead of having a website, separate e-commerce software, and a different analytics site – we integrate all these technologies and more into our easy-to-manage dashboard. When you get a Trendzer website package, not only do you get access to the most up-to-date digital technology, our Digital Experts give you unlimited support and a free 12-weekly site review.

Do you want to know more about the technical features we offer with our website packages? Phone us on 0800 047 6777.

Tech Nation 2016, February 2016. Tech City, in partnership with Nesta.
Thriving in the Digital Economy, February 2016. IDC, sponsored by SAP.

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