UK Businesses Miss £111 Billion Tech Boost

A recent report from Virgin Media O2 Business and the Centre for Economics and Business Research (Cebr) has revealed that if all UK businesses had embraced digital technology more extensively in 2021, the economy could have reaped a £111 billion boost in turnover. 

The Untapped Potential of Digitalisation 

The report, titled ‘The Economic and Social Benefits of Digitalisation’, highlights what appears to be a major missed opportunity to drive productivity, job creation, and economic resilience through digital transformation, and a troubling gap between perception and reality among British firms. For example, according to the report, while 75 per cent of businesses surveyed believed they had a “strong digital culture,” the reality is far less impressive, i.e. the majority have not significantly increased their digital usage since 2021. This lag in digital adoption may, therefore, not only be costing businesses but also the UK economy as a whole. 

The Importance of Not Simply Buying, But Integrating Workplace Technology 

As Bruce Daisley, a workplace culture expert, named as one of the world’s top 10 voices on the future of work by LinkedIn, said of the findings: “This isn’t just about buying tools—it’s about embedding them into everyday practices. Businesses have dazzling opportunities to maximise their tech, but many have been slow to implement permanent changes. Now is the moment.” 

The Digital Divide of Leaders vs. Laggards 

The Virgin Media O2 Business and Cebr research draws a clear line between digital leaders—firms actively investing in and utilising digital tools—and their slower-moving counterparts. The report highlights how companies with a robust digital culture saw turnover growth of 12 per cent compared to 5 per cent for less digitally mature businesses. Also, the report shows how productivity growth for digital leaders was more than double that of lagging firms, while Gross Value Added (GVA) rose by 8 per cent for digitally advanced organisations. 

In stark contrast, businesses with weaker digital cultures reported no growth in these key metrics. The disparity is even more striking in workforce readiness, where 81 per cent of firms with strong digital cultures felt prepared for future challenges, compared to just 43 per cent of those lagging behind. 

As Jo Bertram, Managing Director at Virgin Media O2 Business, states: “There’s a £111bn boost to the UK economy waiting to be unlocked by organisations that prioritise building strong digital cultures. Technology needs to underpin how people connect, collaborate, and drive outcomes.” 

Implications for Jobs and Growth 

Another important point highlighted by the report is how the benefits of digitalisation extend far beyond turnover and productivity. For example, the report estimates that greater adoption of digital technologies could have created 676,000 new jobs by 2023, with over 313,000 of these roles in SMEs. These figures demonstrate the transformative potential of digital tools to enhance not only individual businesses but also society at large. 

As Nina Skero, CEO of Cebr (which conducted the research), noted: “Digital leadership is directly linked to higher turnover, increased productivity, and better performance across every economic metric. UK leaders must prioritise cultivating a strong digital culture to unlock their full potential and drive sustained growth.” 

The Challenges to Digital Progress 

Despite the clear benefits of having a strong, embedded digital culture for a business, significant barriers to digital transformation remain for many companies. For example, many organisations face a confidence gap, believing they are more digitally mature than they are in practice. Also, challenges such as limited budgets, resistance to change, and a lack of digital skills can hinder progress. 

A separate report from the Federation of Small Businesses (FSB) supports these findings. According to their research, many SMEs cite affordability and complexity as the main obstacles to adopting digital technologies. This is particularly concerning given that SMEs form the backbone of the UK economy, accounting for 60 per cent of private sector employment and nearly 50 per cent of GDP. 

What About ‘Digital Overload’ ? 

Not all experts agree on the relentless push for digitalisation. For example, a recent study by the University of Cambridge warns of the potential downsides of over-reliance on technology. The report argues that businesses must strike a balance, as excessive digitalisation can lead to inefficiencies, cybersecurity risks, and workforce burnout. While digital tools are essential, their success hinges on thoughtful implementation and employee buy-in. 

This perspective highlights the need for a more nuanced approach where businesses invest not only in tools but also in training, culture, and cybersecurity to avoid pitfalls. 

What Needs to Be Done? 

To unlock the full potential of digital transformation, UK businesses need to address key barriers. Ways in which they can do this include: 

– Investing in skills development, such as providing employees with the necessary training to use digital tools effectively is critical. 

– Prioritising culture over tools. It’s not just about acquiring technology but embedding it into organisational culture to drive meaningful change. 

– Tailored solutions for SMEs. Policymakers and industry leaders need to develop targeted support for smaller businesses, such as grants, affordable tools, and simplified onboarding processes. 

– Embracing collaboration. Larger firms and digital leaders can help by mentoring and partnering with SMEs to share best practices and accelerate adoption. 

What Does This Mean for Your Business? 

For businesses across the UK, the findings of this report offer both a warning and an opportunity. The £111 billion in untapped economic growth highlights the critical importance of not just investing in digital tools but embedding them effectively within your organisation’s culture. This isn’t merely about staying competitive; it’s about future-proofing your business against a rapidly changing economic landscape. 

The report also highlights how firms with strong digital cultures consistently outperform their peers in turnover, productivity, and workforce readiness. This means that if your organisation has yet to embrace digital tools or struggles to integrate them meaningfully, you risk falling behind not only in growth metrics but also in retaining a skilled and future-ready workforce. In an era where technology increasingly drives market dynamics, this is important!

At the same time, the barriers to digital transformation cannot be ignored. Challenges such as limited budgets, resistance to change, or a perceived lack of relevance are real, particularly for SMEs. However, overcoming these hurdles is crucial. Digitalisation is not just for large corporations, and SMEs stand to benefit significantly, with the potential to access new markets, streamline operations, and enhance customer engagement. Support is available, from government incentives to partnerships with larger firms, but it requires a proactive approach. 

The debate about digital overload is also worth considering. A balanced approach can help avoid inefficiencies and employee burnout. Workforce training and a focus on creating a strong digital culture are key to ensuring technology adds value without becoming a burden. 

All things considered, it seems that businesses essentially face a choice, i.e. to continue as they are and risk missing out on the growth opportunities digitalisation offers, or embrace the challenge of transformation and position themselves for a more resilient, prosperous future.