Presentation to the DCMS. 10th November 2021

1. Digitalisation and UK SMEs
Dr Anastasia Ri
Enterprise Research Centre

2. Digital Readiness and Digital Adoption in UK SMEs
Ri, A., & Luong H. M. (2021). Digital readiness, Digital adoption and Digitalisation of UK SMEs amidst the Covid-19
crisis. ERC Research Paper 96, July 2021
Digital
adoption
UK SMEs
Digital
readiness
• To what extent digital technologies are diffused among UK SMEs?
• What are the characteristics of digitalised SMEs?
• How business priorities, attitudes and perceptions relate to the
probability of digital technologies adoption?
Digital
adoption
Antecedent
s
Outcomes
DigitalTechnology Readiness
Business Futures
survey 2020
1,000 UK SMEs

3. Ri, A., & Luong H. M. (2021). Digital readiness, Digital adoption and Digitalisation of UK SMEs amidst the Covid-19 crisis.
ERC Research Paper 96, July 2021
Digital
Technology
Readiness
Digital readiness predicts digital adoption
AI
Technological &
organisational
(internal)
Environmental
(external)
Priorities:
product
innovation
Priorities:
process
innovation
Exporter
Barrier:
broadband
Size:
medium vs
small
Age
Probability of AI adoption
ns +** ns
+*** +*
-** +* +***

4. Main findings:
• Overall, the first insights from the Business Futures Survey appear to indicate a major positive shift in the
adoption of digital technologies among UK SMEs.
• Both internal and external dimensions of digital readiness are associated with higher probability of digital
adoption and digitalisation.
• Businesses with higher level of digital readiness and ‘digitalised’ businesses were more likely to overcome
2020 without turnover loss if digital technologies in place resulted in increase of innovative activity.
• Little evidence that barriers to digital affect the probability of technology adoption.
• But firms experiencing issues with broadband capacity are found to be less likely to adopt emerging
digital technologies.The implication is that infrastructure investments increasing broadband capacity
may be beneficial to support the adoption of advanced digital technologies.
Ri, A., & Luong H. M. (2021). Digital readiness, Digital adoption and Digitalisation of UK SMEs amidst the Covid-19 crisis.
ERC Research Paper 96, July 2021

5. Twin green and digital transition
Kesidou, E., & Ri,A. (2021).Twin Green and DigitalTransitions: Joint adoption of net zero and digital practices by UK
SMEs, ERC Insight Paper, October 2021.
• Despite a growing interest in twin transition in SMEs, existing evidence is scarce on the joint adoption of net zero
and digital practices. In this study, we explored the patterns of use of net zero and digital practices by UK SMEs.
• Synergies exist between use of CRM and undertaking of environmental reports and audits, switching to renewable
energy, and introducing low carbon products and services.
• This suggests an increased pay-off for firms that jointly adopt customer-focused digital systems and
practices aiming to reduce, measure and showcase environmental impact, especially in addressing
customers’ needs and improving firm’s reputation.
• Firms looking to enhance customer’s experience by making their products or services more environmentally
friendly would benefit from digitalising their back-office processes.
• We find some evidence suggesting synergies between digitalisation (use of e-commerce, accountancy and HR
software, video-conference and collaboration tools) and changes in production/ processes to reduce carbon
emissions.
• Our results point out to synergies between advanced digital technologies such as AR/VR and AI/ML and
investment in R&D related to the environment supporting the view that UK SMEs are already on the path of
digitally enabled eco-innovation. Future research is needed to further examine the potential of these synergies
by evaluating their impact on productivity, growth and environmental performance.