Poor web skills costing the UK economy £19 billion per year

Small businesses that sell their products online and use the internet to market themselves could boost their combined annual turnover by £18.8 billion, a report into the lack of digitisation in the UK has found.

According to data, both business and personal use of the internet could improve with 16 per cent of Britons still not online, including 4.5 million in the British work force.

The report by Booz and Company said that the UK was falling short of its full economic potential because of a failure to embrace digital technology.

In business, just one third of SMEs have a digital presence and only 14 per cent sell their products or services online. This compares to 30 per cent in Norway.

Meanwhile, use of social media by small businesses also needs to improve. While 18 million Britons use social media to interact with brands, only one per cent of small businesses sell their products via the same channel.

However, while the figure greatly improves for larger firms that have the resources to invest in such a rapidly developing technology, smaller firms do not have to be left behind:

"Companies do not have to start from scratch to introduce information technology," the report said.

"Off-the-shelf programs allow firms of all sizes to benefit from global digital marketing campaigns, advanced customer analytics, and seamless payments processing."

Elsewhere, a report by Lloyds Banking Group found companies who use the internet across their business report significant benefits including rapid growth, reduced costs and improved customer service.

"The leaders of SMEs already know that digitisation will lead to greater growth," Booz and Company added.

"But UK SMEs must first invest in the skills needed to exploit digitisation and create growth. Otherwise, they will be forced to outsource more jobs, widening the skills gap at home and jeopardising the turnover potential of digitisation."