A Commentary on Scotland's Digital Performance

Digital Economy

"All Scottish businesses make effective use of digital technologies to grow their businesses and realise their full economic potential"

Scotland's Digital Economy progress has been measured using the following sources:

• Small Business Survey
• European Commission Digital Agenda Scoreboard

The Small Business Survey is The Scottish Government's preferred source at the moment to measure the progress of the digital economy and allows for UK comparisons - though it should be noted that this only provides information on small and medium sized enterprises. As there is currently limited data to measure Scotland's Digital Economy progress at a Scotland level, the Scottish Government is currently considering the scope of a business survey to gather this information.

In 2012, 87 per cent of SMEs reported that they had broadband (Figure 14). Almost all small and medium sized employers had broadband: 99 per cent and 98 per cent respectively. The size band with the lowest take-up of broadband was the self-employed, with 85 per cent broadband take-up.

The Small Business Survey all found that 52 per cent of all SMEs in 2012 reported that they had a website with the proportion of enterprises with a website increasing with sizeband.

Figure 14: Proportion of SMEs in Scotland with website/broadband²²
Source: Small Business Survey 2012²³

60 per cent among Scottish SMEs used internet to promote goods and services and 34 per cent used internet for selling goods and services (Figure 15). Comparing with the UK, 70 per cent of SMEs used the internet to promote their goods and services through a website and 41 per cent used the internet to sell goods and services.

Figure 15: Purposes for which businesses use the internet, Scotland and UK²⁴, 2012
Source: Small Business Survey 2012²⁵

Although there are limited data allowing for comparison between Scotland and other countries, Figure 16 shows the UK's relative performance in 2012 compared with EU nations on two measures - the proportion of SMEs with a website and the proportion of SMEs selling online.

In 2012 the UK ranked 7^th in comparison with EU-27 with 80.9 per cent of enterprises (SMEs with 10-249 persons employed) having a website or a homepage. This is above the EU-27 average of 70.5 per cent and lower than that of the leading nation (Finland at 90.9 per cent).

Figure 16: Proportion of SMEs²⁶ having a web site or homepage (without financial sector) in the European Union 2012
Source: European Commission Scoreboard²⁷

Bearing in mind that the different data sources available for SMEs with a website or a homepage in Scotland and the European Union prevent strict comparisons to be made, the chart below can still give an indication of where Scottish SMEs are in relation to similar enterprises in other European nations. The small sample size²⁸ of Scottish SMEs should also be borne in mind.

• Figure 17 below shows that Scotland ranked 4^th among the European nations with 88.5 per cent of SMEs having a website in 2012.
• Scotland's figure is not far behind the three leading nations Finland (90.9 per cent) and Denmark and Sweden (89.1 per cent).

Figure 17: Proportion of SMEs²⁹ having a web site or homepage (without financial sector) in the European Union 2012 including Scotland
Source: Small Business Survey 2012³⁰ for Scottish data and European Commission Scoreboard for EU data

The UK ranked 8^th among countries in EU-27 with 16.8 per cent of UK SMEs selling online (Figure 18). This is lower than the leading nation of Sweden (25.9 per cent) and slightly above the EU average (13.4 per cent).

Figure 18: Proportion of SMEs³¹ using any computer network for sales (at least 1%) in the European Union, 2012 (without financial sector)
Source: European Commission Digital Agenda Scoreboard³²