By Daniel Hunter

There are more than one million small to medium-sized enterprises (SMEs) in the UK that lack back digital skills, according to Lloyds Bank.

Lloyds' UK Business Digital Index found that as many as 1.2 million SMEs are operating without the digital skills needed to maximise their potential.

The number of charities with basic digital skills has dropped from 45 to 42% from a year ago — a decrease of around 6,000 charities, showing a continued lack of digital adoption.

In contrast, the number of SMEs with basic digital skills has improved since 2014, increasing from 75% to 77% — an increase of over 100,000 in a UK population of 5.2m SMEs.

The overall limited progress in developing digital skills, reflects the fact that there is no increase in the amount of investment organisations are making to develop these skills, with three quarters (75%) investing no money at all.

Those charities at the lowest end of the digital skills spectrum also reported an increase in doubts as to how websites (78%) or social media (83%) could help increase their funding.

Miguel-Ángel Rodríguez-Sola, Group Director for Digital, at Lloyds Banking Group said: “In just one year it is pleasing to see that over 100,000 more small businesses in the UK now have basic digital skills.

“But what is also clear is that real challenges remain — over a million small businesses and charities still lack basic digital skills and the perceived benefits of being digital remain. For example 25% of all organisations surveyed believe digital is ‘irrelevant’ to them. We cannot emphasis enough the benefits that digital adoption can offer — such as saving time, increasing revenue or funding or reaching wider audiences. Digital is the key to unlock these benefits.

“Even if an organisation does not believe they need to be online, many of their customers already are. There needs to be further awareness to give charities and businesses the confidence to do more online.”

'Maturity = success'

A new indicator for 2015 is the correlation between digital maturity and organisational success. The 2015 Index shows that the most digitally mature SMEs are more than a third more likely to report an increase in turnover in the past two years compared with those businesses that are the least digitally mature.

This is even more dramatic when looking solely at charities, where the most digitally mature charities are twice as likely to see an increase in funding, compared with those at the lower end of the maturity scale. Such measurement clearly demonstrates the monetary value for organisations to become more digitally advanced.

Regional Success

A positive finding is the significant increase in both the North East and North West’s digital maturity which increased by eight and nine points to 104 and 100 respectively. This suggests that where there has been concentrated activity to boost local digital capabilities, such as that undertaken by digital skills charity Go ON UK, there appears to have been a real impact at a local level.

The North East is now showing an above average digital maturity for the UK, a real improvement from last year’s position in the bottom half of the table. Progress in the North West has been equally impressive with a nine point increase; the highest of any region.

Overall, London remains the most digitally mature region with an index score of 110 but the 2015 Index shows that the regional divide has reduced.