Procurement · 12 March 2018

Digital adoption could unlock £10bn turnover in rural micro businesses

Digital adoption
Around 80 per cent of rural business owners are using the internet to sell overseas

Greater access to online tools and services in Britain’s rural regions could be worth as much as £26.4bn to the economy, with micro business owners predicted to benefit most significantly from digital adoption.

According to research undertaken by Rural England and Scotland’s Rural College, commissioned by online auction site Amazon, micro business owners would see the greatest returns through engagement with ecommerce, access to superfast broadband and better delivery services. Annual business turnover for micro firms, the study claimed, could grow by £9.4bn per year.

Currently, the UK’s rural regions contribute £299bn to the economy each year, but business owners remain restricted due to a lack of joined up infrastructure and practical training opportunities.

Snapshot of a typical rural business
• Family-run and home-based
• Business owner over 55 years old
• Employ fewer than ten staff
• Less likely than an urban company to generate turnover above £50,000

Technology has however already started to improve operations at rural businesses – some 29 per cent of survey respondents said it had improved access to customers and suppliers, while one in four said digital adoption had improved data storage, security and flexibility at their company.

Meanwhile, some 80 per cent were using ecommerce to trade overseas, with retail and the food sector the greatest rural exporters.

When asked of their biggest constraints, over half admitted skills-related obstacles had created barriers to growth, while one in five admitted they struggled to recruit staff with strong digital skills.

Commenting on the findings, Brian Wilson, chair of directors at Rural England, recognised that rural business owners were already “strong digital adopters”, but warned of barriers to going further.

“Their ability to go digital has been held back by constraints which have included connectivity but also extend to a lack of skills, training and resources,” he explained.

“To help address these constraints and boost rural economic productivity, we believe there are some straight forward ‘quick wins’, which if delivered locally, nationally and UK-wide, could have a significant and positive impact on the quality of life for rural communities and the UK economy as a whole.”

Welcoming the report, government environment secretary Michael Gove praised the value of ecommerce to the rural economy.

“The internet has the potential to ensure the countryside can flourish in a way that combines preserving the environment with economic dynamism. Digital technology can open opportunities, build skills and connect rural businesses to global markets,” Gove said.

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Researchers detailed five recommendations which could unlock the potential of rural enterprise.

  1. Streamlining digital support services

A single information portal tailored for the digital needs of rural businesses.

  1. Digital Enterprise Hubs

New co-working hubs in rural towns which businesses can use or visit for better connectivity, startup workspace and skills training.

  1. Training and skills development

Collaboration between local employers and educations providers to deliver life-long learning opportunities for small business owners.

  1. Accelerated business adoption of digital connectivity

Encourage business owners to prioritise investment in digital tools and services.

  1. Stronger rural targeting by existing policies and strategies

Making support for digital growth a key objective in future rural business support programmes. Also, encourage larger local companies to share best practice with and support smaller firms.

Business owners thriving in the rural economy

The Cotswold Distillery

Business Advice asked three entrepreneurs how life in rural Britain was working for them.

Ella Davidson, founder of PR agency The Book Publicist, Hay on Wye: “Location has never mattered. We have clients in London, Australia, Belgium, US. We communicate with clients via Skype and are in regular contact with journalists via email and telephone. It’s not about meeting up for boozy lunches – when a ten-minute chat will do, the results are better.”

Dan Szor, founder of the Cotswolds Distillery, North Cotswolds: “We employ local people, the local farmers get all our spent grains from the production process, and we only buy barley off local Cotswold farmers for our whisky.”

Lucy Hutchings Hunt, managing director of development agency Systemyzed, Howardian Hills: “I do my development work in the office in York – where the internet is as good as any other UK city – and then I write and do my, strategy, telephone and relationship-building work from my office at home.”

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ABOUT THE EXPERT

Simon Caldwell is deputy editor at Business Advice. He has a BA in politics and communications from the University of Liverpool, and has previously worked as a content editor in local government and the ecommerce industry.

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