Digital Economy Business Survey 2017

Digital Economy Business Survey 2017: Office of the Chief Economic Adviser

This report presents the key findings from the 2017 Digital Economy Business Survey.

The Scottish Government, in partnership with Scottish Enterprise, Highlands and Islands Enterprise and Skills Development Scotland, commissioned Ipsos MORI to carry out a Digital Economy Business Survey in the autumn of 2017.

The aim of this survey was to provide an update to the 2014 Digital Economy Business Survey, to assess how the level of digitisation amongst Scottish businesses has evolved over time, and to provide insight into new areas of focus.

Digital Economy Business Survey 2017

Introduction

Scotland's refreshed Digital Strategy, Realising Scotland's Full Potential in a Digital World, published in March 2017, sets out the Scottish Government's vision for Scotland as a vibrant, inclusive, open and outward looking digital nation. Key to achieving these ambitions is supporting the development of internationally competitive, digitally mature businesses across all sectors of the Scottish economy and a workforce that has the digital skills required to support continued growth.

As part of Scotland's Digital Strategy, the Scottish Government and its agency partners committed to monitoring developments in the level of digitisation amongst Scottish businesses, and to measure changes in digital maturity.

The previous Digital Economy Business Survey was conducted in 2014 with the purpose of providing a baseline understanding on the level of digitisation of Scotland's businesses, allowing for benchmarking and progress to be measured over time.

In order to assess digital progress amongst Scottish businesses since the baseline survey in 2014, the Scottish Government, together with its partners Scottish Enterprise, Highlands and Islands Enterprise and Skills Development Scotland, commissioned Ipsos MORI to carry out the 2017 Digital Economy Business Survey in the autumn of 2017.

The purpose of the 2017 Digital Economy Business Survey was to:

• Track how Scottish businesses have evolved in relation to digital adoption, usage, exploitation and skills, since the baseline survey in 2014;
• Provide an insight into the areas businesses may require extra support to improve their adoption and exploitation of digital technology; and
• Provide an insight into new areas of focus, such as cyber security and the collaborative economy.

This report presents the high-level results from the survey. Comprehensive results from the survey, including breakdowns by firm size and sector, are available in the accompanying web tables which can be found at: www.gov.scot/digital

Key findings from the survey

• Internet connection: 97 per cent of businesses had an internet connection, up from 94 per cent in 2014. 28 per cent of business with internet had a fibre optic connection, up from 11 per cent in 2014.
• Adoption of technologies: As in 2014, the most widely adopted digital technologies were making use of mobile technologies (73 per cent), having a company website (72 per cent), and using social media (66 per cent). Social media and cloud computing saw the greatest increases in use from 2014.
• Collaborative economy: 7 per cent of businesses made use of online collaborative platforms, such as Airbnb or Uber. 3 per cent of businesses operated as an online collaborative platform.
• Importance of specific technologies: 29 per cent of businesses using mobile internet and technologies, and 28 per cent of businesses using cloud computing, considered those technologies as central to the operation of the business.
• Reasons for not using technologies: 6 per cent of businesses used none of the listed digital technologies, down from 10 per cent in 2014. Irrelevance of the technology to the business was the most common reason for not using any of the listed technologies (68 per cent).
• Benefits of using technologies: The perceived benefits from making use of digital technologies were similar to those cited in 2014. Benefits range from:
  • Technologies generating exposure of the company and that it has increased responsiveness to customers (website and social media); to
  • allowing for greater flexibility and remote working (mobile internet and technologies and cloud computing); and
  • better advertising (data analytics) and increased efficiency (management software).
• Skills in the workforce: 26 per cent of businesses stated that their employees were fully equipped with the skills to meet the business' digital technology needs, down from 37 per cent in 2014.
• Skills development: 34 per cent of businesses were taking action to develop their existing employees' digital technology skills, up from 26 per cent in 2014. Only 5 per cent of businesses were aware of CodeClan, Scotland's digital skills academy.
• Cyber security skills: 30 per cent of businesses felt that they were fully equipped with the relevant skills to protect against and deal with cyber security threats. 19 per cent felt poorly or not at all equipped to deal with cyber security threats.
• Cyber security technology: The most common technology used by businesses to improve their cyber resilience was anti-virus software (91 per cent). Other technologies being used included Data Loss Prevention (47 per cent) and content filtering (44 per cent).
• Digital public services: 51 per cent of businesses had engaged with public services online, down from 63 per cent in 2014.
• Innovation: Among businesses using digital technologies, 47 per cent stated that they have used the technologies to capture insights or feedback from customers, and 45 per cent had used them to research competitor products.
• E-commerce: 30 per cent of businesses made sales via e-commerce. Some of the steps being taken by businesses using e-commerce, in order to improve their online presence, included: search engine optimisation (58 per cent), PR activity (46 per cent), and digital marketing (35 per cent).
• Internationalisation: 24 per cent of businesses sold goods or services or licensed their products outside the UK, up from 18 per cent in 2014. 36 per cent of businesses selling online agreed that using e-commerce had increased the number of international markets they were able to export to.
• Overall importance of digital technology to current operations: Overall, 78 per cent of businesses stated that digital technologies are essential or important for the current operations of the business, up from 75 per cent in 2014.
• Overall importance of digital technology to future growth: Similarly, 78 per cent stated that digital technology was essential or important to the future growth or competitiveness of their business, up from 75 per cent in 2014.
• Future use of digital technology: 65 per cent of businesses hoped to develop or use a company website more over the next 12 months. 60 per cent hoped to extend their use of social media.

Detailed survey methodology

Fieldwork approach

The survey fieldwork was conducted between 11 ^th September and 23 ^rd October, using telephone interviewing. In total 3,258 businesses took part in the survey.

The interviews were targeted at the most relevant person in each business: for smaller business (less than 10 employees) interviews were carried out with the owner of the business; for larger businesses, interviews were carried out with the person responsible for making decisions about the IT systems in the business (Managing Director, IT Manager or equivalent). Sole traders were excluded from the survey.

Survey sample

The survey sample was sourced from the Experian business database and was stratified by sector and size to reflect the population of Scottish businesses as a whole. The survey sample included additional boost of 1,000 interviews within the Highlands and Islands, and of 250 interviews in the South of Scotland, to allow for further analysis of findings for these regions.

Quotas were set for recruitment and interviewing so that the achieved sample reflected the population of eligible organisations as defined by the Inter-Departmental Business Register. Eligible organisations were defined by Standard Industrial Classification ( SIC) code.

For all quotas, a 20% leeway was allowed for, meaning that a minimum of 80% of each quota had to be reached, but no more than 120% of each quota target could be achieved.

Respondent profile

The achieved sample was broadly representative of the population, notwithstanding some differential non-response due to differences in availability and willingness to participate. Weighting was applied to correct the distribution of sectors and size categories to match the sample counts.

The profile of respondents by area, sector and size is shown below:

Sample profile by region, sector and size