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Forcing the issue: getting British businesses online

  1. A digitally connected business.
    Ray Newman

    Ray Newman UKBF Regular Staff Member

    144 30
    9 |

    This article was first published in January 2019, and has been updated for 2020.

    In an age when even your nan is likely to have a smartphone and post memes on Facebook, it’s amazing to think that there are businesses out there which still aren’t online in any meaningful sense.

    Under current circumstances, with social distancing measures preventing the usual operation of most brick-and-mortar shops, the need for a digital presence has become even more acute – but the drive to get more businesses online is nothing new.

    The Office for National Statistics published its annual report into e-commerce and ICT use among UK firms in November last year, revealing that in 2018 a startling 52% of businesses in the UK had no website, and even among those with 10 or more employees the number remained as high as 16%.

    What's more, only 12.9% of UK businesses made sales through a website. More than half of larger businesses (those with 1,000 or more employees) did not make sales via their websites.

    The Government is keen to push the reluctant rump into the 21st century. In its 2017 UK Digital Strategy the Department for Digital, Culture, Media & Sport (DCMS) stated that “there are four core digital activities that we believe most businesses need to do: maintain a web presence, sell online, use the cloud, [and] digitise back-office functions such as payroll.”

    As well as a series of industry-specific support schemes, such as Digital Built Britain which targets the construction industry, this drive manifests in a series of ‘nudges’ across a range of policy areas, each contributing to an overall change in the culture.

    Making Tax Digital is perhaps the highest profile example. Announced in 2015, it is a strategy intended to compel firms not already keeping digital records and completing their tax returns online to start doing so.

    Another nudge came in the form of a ban on a surcharge for card payments in 2018, prompted by an EU directive but passed as a Brexit-proof UK law. Though this might seem counterintuitive – doesn’t this punish businesses for taking electronic payments? – the idea here was surely to normalise cashless payments.

    But why?

    Why does the Government care whether AAA Aardvark Window Cleaning Services of Andover is online or not?

    It is partly, to put it bluntly, about surveillance. It will be easier for HMRC to observe and identify suspicious behaviour when every transaction, every payment, the movement of every pound and penny, is recorded digitally. It already monitors transactions on auction and car trading websites – for example, cross-referencing that data with DVLA registrations.

    Less cynically, there is also a desire to keep British business, and thus Britain as a whole, competitive. When it’s so easy for consumers to order direct from manufacturers anywhere in the world, to commission remote workers, or to buy via multinational online retailers based offshore, homegrown businesses need every advantage they can get.

    Referring back to that 2017 digital strategy, DCMS said that SMEs with a “strong web presence on average grow more than twice as quickly as those with minimal or no presence, export twice as much, and create twice as many jobs”.

    There is also the expense and risk associated with the manufacturing, storage and movement of paper money. Banknotes cost a lot to print, especially given the measures necessary to stay ahead in the arms race with counterfeiters. Once they are printed, they’re a constant security risk, being a target for theft, whether it’s by the vanload or one at a time from open till drawers.

    And anyone who has ever worked in retail will know the anxiety that comes with getting money from the premises to the bank after a busy day’s trading. Do you send someone out into the night with a sack of cash, taking a different route each time to avoid being observed? Or leave it on the premises until morning and hope nobody breaks in during the small hours?

    The same goes for paperwork. Handling a paper tax return within government requires an entire infrastructure for receipt and distribution – an army of drivers and vans; depots and delivery workers; scanners and data entry staff.

    The cost of handling paper also motivates banks and other service providers to join the chorus nagging reluctant business customers to get online.

    In exchange for supposedly greater convenience – on-demand reporting, instant transfers, and fewer letters cluttering up reception – they save a fortune on printing, postage and processing. (All served up, of course, with a garnish of environmental friendliness.)

    Resistance is futile

    Apart from a rebellious instinct against being ‘nudged’ there are various reasons businesses might resist the push to digital.

    For example, high-profile e-commerce data breaches, such as the Dixons Carphone incident in the summer of 2017, have created an air of anxiety around online business. If household names with dedicated IT security teams cannot keep customer data secure, what hope is there for SMEs operating on a budget?

    Some would also argue that maintaining an online presence in other ways – with a social media page or a Google My Business listing, for example – is enough to give potential customers the information they’re looking for.

    But as the Government introduces ever more modernising initiatives, for most small businesses, having to adjust to digital systems will simply be unavoidable.

  2. The Byre

    The Byre UKBF Legend Full Member

    10,351 4,331
    An excellent appraisal of the situation - except that despite the government insisting on everything being done on-line, which is fine by me, they are doing almost nothing about forcing a fibre-to-the-home infrastructure.

    The present structure of green boxes at the end of the lane gives the home and business about 40mbs down and about 8mbs up in the real world. That is woefully inadequate for a future of 4K broadcasting and business transactions being conducted in 4K and above.

    The average download speed is just 14mbs and half the population is below 10mbs. That is so far below where it needs to be for a modern society, it beggars belief. We are in a world in which Japanese Internet providers are now offering services measured in gigabits-per-second.

    The test transmissions in 4K by the BBC during the football World Cup failed in nearly all regions, simply because the infrastructure is light-years behind where it needs to be for an on-line world.

    Manufacturing in the UK may be diminishing, but the creative industries are expanding at 8% p.a. and they need direct fibre. If you are editing a film or authoring a game, you need to be able to communicate one-on-one with others around the Globe. In many instances, you need to be working on the same programme simultaneously and to do that, you need direct fibre.

    It is absurd to state that industry hubs and media centres have fibre, an editor working from home is not in Pinewood, Soho or the Manchester Media Centre - he or she is at home. And that person needs a few hundred mbs speed in both directions and the infrastructure has to hold up during peak viewing times.

    There are some 30m households in the UK and each and every one of them needs to be properly connected.
    Last edited: Feb 1, 2019
    Posted: Feb 1, 2019 By: The Byre Member since: Aug 13, 2013
  3. Awinner2

    Awinner2 UKBF Regular Free Member

    480 113
    Over the past 2 years I have created around 300 Google My Business setups for SMEs in my area. In conversations with them (and looking to upsell other services that I offer!) I have been amazed at how many tell me that they do not see the need for a website "when a Facebook business page brings in all the new customers that I need" and also allows them to instantly post new offers etc. This medium they find easier to work in than "fiddling around" with a website and often they have a dedicated staff member (or teenage family member) looking after their page/posts. One of my retail shop businesses has a FB page with 19000 likes/followers. They update their page 4-6 times daily with offers/promotions etc so each time that they do, all the followers get the posts into their feeds. No paid FB ads, no AdSense but plenty of engagement with their client base.
    But as @thebyre correctly points out, the lack of infrastructure in digital technology holds back the entire business community. I live in rural Lincolnshire and local farming companies have had to put in their own satellite dish based Internet towers to even send in all the info that Defra need every time a beast goes off the farm. The enlightened ones also install linked receivers for their staff homes on the estate so that family members can do their school/college work etc plus all the other online things that we all enjoy.
    Posted: Feb 1, 2019 By: Awinner2 Member since: Aug 4, 2017
    Julia Sta Romana and The Byre like this.
  4. Mr D

    Mr D UKBF Legend Free Member

    24,872 3,030
    Great. So who pays for that infrastructure?
    Those of us who don't need it? Those houses that aren't online?
    Or just stick another tax on all businesses to pay for a few to have what they want?
    Posted: Feb 3, 2019 By: Mr D Member since: Feb 12, 2017
  5. Julia Sta Romana

    Julia Sta Romana UKBF Regular Free Member

    100 30
    "If household names with dedicated IT security teams cannot keep customer data secure, what hope is there for SMEs operating on a budget?"

    I think this just might be a valid reason for why small businesses that refuse to go online. Customer data is somehow more secure. Yeah, it's not as efficient or convenient but at least more secure.

    But once the infrastructure improves worldwide, I agree that small business won't have a choice on this. Someone might even think of making online presence as a requirement for business registration.
    Posted: Feb 5, 2019 By: Julia Sta Romana Member since: Apr 18, 2017
  6. The Byre

    The Byre UKBF Legend Full Member

    10,351 4,331
    On a similar vein, why are we all being forced to use electricity? Not everybody wants electricity and not everyone needs electricity. We did just fine without electricity, so why do we all have to suffer and have poles and pylons all over our land if we personally don't need it?
    Posted: Feb 5, 2019 By: The Byre Member since: Aug 13, 2013
    simon field likes this.
  7. chickenlady

    chickenlady UKBF Contributor Free Member

    46 12
    I long for an upload speed of something above 1mbs... it is but a dream for us small rural businesses. My neighbour recently chopped through my phone line while having some groundworks done. My 1mbs was sorely missed as was my phone line and it made running the business nigh on impossible for a couple of days. Guess what? We've got no mobile phone signal either. And we pay the same for the service whether we get fibre all the way or just part of the way so I'm feel as if I'm paying for something I don't really get anyway. BT will even sell me their Extra Superfast Fastest service even though I can't - and never will (so they tell me) - be able to get it. No cable alternative here.
    If the government wants us all to do stuff digitally, it needs to invest everywhere - not re-invest in areas that already have great coverage. I don't want to do my taxes in MacDonalds.
    Posted: Feb 28, 2019 By: chickenlady Member since: Feb 28, 2019
    The Byre likes this.

    MY OFFICE IN CHINA UKBF Legend Full Member

    5,622 1,319
    I do!

    @billybob99 uses Pizza Hut (or is it Pizza Express)
    Posted: Apr 16, 2020 By: MY OFFICE IN CHINA Member since: Nov 16, 2011