SMEs and Net Zero The document summarizes research on SME practices relating to net zero emissions. It finds that key drivers for SME adoption of net zero practices include environmental regulations, customer demand, improving image/reputation, and government subsidies. Technological net zero practices improved environmental performance by reducing emissions, while some practices like changes to production processes and adopting renewable energy also increased the probability of business growth. The research implications are that policy should support SME transitions to net zero through regulations and green procurement to boost demand for low-carbon products. SME managers can adopt practices that improve both environmental and business performance.

1. Research Showcase: SME Business Futures
ERC & Lloyds Banking Group Centre for Business Prosperity
@ERC_UK

2. ERC & Lloyds Banking Group Centre for
Business Prosperity
Research Showcase: SME Business Futures
SMEs and Net Zero
Effie Kesidoua & Anastasia Rib
aERC & Leeds University Business School
bERC, Aston Business School
Zoom Event: Thursday 22nd April
10 – 11.30 am

3. SMEs and Net Zero
• Motivation & Research Questions
• Literature
• Methodology & Results
• Conclusions & Policy implications

4. Motivation
• The climate emergency is leading many countries to commit to
various targets for reducing their carbon footprint.
• In 2019, the UK passed a net zero emissions law to be attained by
2050.
• The UK government announced a plan for a green recovery that
would restore the economy from the COVID-19 crisis (BEIS, 2020).
What do we know about environmental practices of
SMEs?
Which are the Drivers and Performance outcomes of net
zero practices?

5. Prior literature is incomplete
• Prior studies focus on environmental practices of large corporations.
– Emissions by SMEs vary widely depending on the industry in which they
operate. The majority of SMEs in the UK are operating in non-GHG
intensive industries (ONS, 2019).
• Most of the research on SMEs focuses on new start-ups rather than
greening existing SMEs.
– New start-ups are more prone to generate green innovations (Hockerts
and Wüstenhagen 2010; Hofmann et al. 2012) .
 Yet, SMEs will be called upon to comply with the net zero policies
and reduce their direct GHG emissions and indirect emissions.
Also, as the institutional context is changing, consumer demand
& supply networks might exert increasing pressures to SMEs and
threaten their survival.

6. Research Questions
• RQ1 - Which are the drivers of net zero
practices?
• RQ2 - Which are the performance
outcomes of net zero practices?

7. Net zero practices
• Net zero practices: firms typically implement a portfolio of net
zero practices (Kesidou & Demirel, 2012). The development and
diffusion of low-carbon practices requires accelerating both
(OECD, 2018):
 Technological investments (e.g. renewable energy or battery
energy storage);
 Non-technological investments (e.g. changes in institutions
or organisations that lead to consumer behavioural changes
such as circular economy business models).
• Low-carbon organisational investments can complement low-
carbon technological solutions (OECD, 2018; Ozusaglam et al., 2018;
García‐Quevedo et al., 2020).

8. Technological net zero practices
• Introducing clean or more efficient production technologies that
transform the production process (OECD, 2009; Demirel and Kesidou, 2011)
(e.g. closed loop manufacturing systems) (EC, 2010).
• Substituting inputs in the production process (e.g. fossil fuel) with
cleaner alternatives, such as use of renewable energy (Fischedick et al.,
2014).
• Reducing emissions without changing the production process (DEFRA,
2006; Fischedick et al., 2014), such as improved pollution filtering.
• Developing of new green technologies, such as engaging in
environmental R&D and/or introducing new low carbon products
and services to the market (Kesidou and Wu, 2020).

9. Organisational net zero practices
• Environmental reporting allows businesses across sectors to reduce their
carbon emissions (García-Quevedo et al., 2020).
• Training on environmental matters increases the environmental
awareness of employees and enhances the environmental skills and
expertise within the organisation (Renwick et al., 2013; Pham et al. 2020).
• Conducting market research related to low carbon products/services
allows businesses to build “market sensing” net zero capabilities, which
allow SMEs to understand changes in consumer demand (Demirel and
Kesidou, 2019).
• Re-organising distribution processes across the supply chain can reduce
carbon emissions, e.g. green operations management and sustainable
procurement (Hsueh et al., 2020).

10. External Drivers of net zero practices
• Environmental regulations restrict or limit the use
of GHG intensive technologies; environmental
taxes increase the cost of operating pollution-
intensive technologies (Johnstone and Labonne,
2006).
• Innovation policies provide incentives e.g.
government grants or subsidies, which increase
or shift investments towards green R&D (Fabrizi et
al., 2018).
• Self-regulation such as voluntary agreements
within the sectors or across the supply chain could
induce SMEs to commit to net zero practices in
order to sustain their legitimacy within their
sectors and/or gain entry to global supply chains
(Iatridis and Kesidou, 2018).
• Stable access to finance
over the long run e.g.
availability of external
funding from banks is
required to mitigate the
high risk and
uncertainty of capital-
intensive net zero
practices (Mazzucato and
Semieniuk, 2018).
• Customer demand for
low-carbon products or
services could be a key
driver of net zero
practices (Kesidou and
Demirel, 2011).

11. Internal Drivers of net zero practices
• SMEs adopt low-carbon practices to improve their image and
reputation. Reputation is an intangible asset that reflects a broad
public recognition of the capability of the firm to deliver high
quality products and services and is associated with performance
rewards (Rindova et al., 2005).
– SMEs could adopt net zero practices in order to legitimise their
business activities and gain public approval by various national
and international stakeholders.
• Reducing costs underpins investments on net zero practices e.g. a
more efficient production process may decrease costs (Hitchens et al.,
2003). Yet, not all net zero practices lead to a significant decline in
business costs- they could actually increase costs (Rexhäuser and
Rammer, 2014).

12. Performance outcomes of net zero practices
• Technological Net zero practices vary in their effects upon environmental
and business performance (Johnstone, 2007). Identifying those net zero
practices that do both – the so-called ‘win-win scenario’.
 Evidence from Germany indicates that only technological net zero
practices that alter the production process significantly, increasing
production efficiency, are able to boost business performance
(Rexhäuser and Rammer, 2014).
• Organisational Net zero practices often affect positively environmental
performance (Arimura et al. 2016); yet, their benefits are not always clear
when it comes to business performance (Darnall et al. 2008).
 E.g. environmental reporting and environmental management systems
reduce pollution, but only certified ones are able to positively affect
operational performance (Melnyk et al., 2003).

13. Methodology: Data
• ERC “Business Futures” Survey.
• The survey was undertaken by telephone using a CATI system between September
and November 2020 and collected data from 1,019 SMEs.
• The sample focused on businesses employing between 7 and 250 employees and
was representative of the main economic sectors and nations.

14. Variables
Net zero practices Sample Mean Std. Dev.
Environmental reports (1/0)
N=1019 0.219 0.414
Changes in production or distribution processes (1/0)
N=1019 0.385 0.487
Environmental R&D (1/0)
N=1019 0.144 0.351
Air pollution monitoring and filtering (1/0)
N=1019 0.193 0.395
Environmental training (1/0)
N=1019 0.261 0.440
Low carbon market research (1/0)
N=1019 0.158 0.365
New low carbon products or services (1/0)
N=1019 0.251 0.434
Switched to more renewable energy (1/0)
N=1019 0.297 0.457
Drivers
Environmental regulations or taxes N=694 2.794 1.296
Government grants or subsidies N=688 2.741 1.447
Customer demand for low-carbon products or services N=686 2.502 1.337
Voluntary agreements within the sector or supply chain N=675 2.512 1.307
External funding from banks N=681 2.352 1.386
Improving your image and reputation N=714 3.322 1.277
Reducing costs N=719 3.441 1.248
Performance outcomes
Employment growth (0/1) N=1015 0.171 0.377
Carbon reduction (0/1)

15. Variables
Controls
Size: small N=1018 0.857 0.350
Size: medium N=1018 0.143 0.350
Size: log(Employment) N=981 3.306 0.880
Age: 0 to 5 years N=1013 0.053 0.224
Age: 6 to 10 years N=1013 0.146 0.353
Age: 11 to 20 years N=1013 0.315 0.465
Age: More than 20 years N=1013 0.486 0.500
Nation: England N=1019 0.861 0.346
Nation: Northern Ireland N=1019 0.027 0.162
Nation: Scotland N=1019 0.073 0.259
Nation: Wales N=1019 0.039 0.195
Sector: Primary ABDE N=1005 0.025 0.156
Sector: Manufacturing C N=1005 0.111 0.314
Sector: Construction F N=1005 0.077 0.266
Sector: Transport, retail and distribution GHI N=1005 0.347 0.476
Sector: Business services JKLMN N=1005 0.274 0.446
Sector: Other services PQRS N=1005 0.167 0.373

16. Methodology: Econometric specification
• What drives adoption of net zero practices?
�
𝑁𝑁𝑁𝑁𝑖𝑖
𝑗𝑗
= 𝛼𝛼0 + 𝛼𝛼1𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝑖𝑖 + 𝛼𝛼2𝑍𝑍𝑖𝑖 + 𝜀𝜀𝑗𝑗
, 𝑗𝑗 = (1, … , 8
• What are the performance outcomes of net zero practices?
(1)
 Environmental Performance: Reduction in carbon emissions
 Business Performance: Firm growth

17. RESULTS: DRIVERS of net zero practices

18. Performance outcomes
Environmental performance: CARBON EMISSION REDUCTION (I)

19. Performance outcomes
Environmental performance: CARBON EMISSION REDUCTION (II)

20. Performance outcomes
Business performance: Firm GROWTH (I)

21. Performance outcomes
Business performance: Firm GROWTH (II)

22. Conclusions
• RQ1 - Which are the drivers of net zero practices?
– Environmental regulations or taxes
– Customer demand for low-carbon products or services
– Improving image and reputation
– Government grants or subsidies
– Availability of external funding from banks
• RQ2 - Which are the performance outcomes of net zero practices?
– Technological net zero practices improve the environmental performance of SMEs.
– Organisational net zero practices affect environmental performance indirectly.
– Changes in production or distribution processes, Environmental R&D, Switching to renewable
energy increase the probability of firm growth.
– Environmental reports and conducting low carbon market research were more likely to
experience firm growth.
Induce SMEs to commit
to Net Zero practices
Constrain SMEs to commit
to Net Zero practices

23. Managerial & Policy implications
• Policy mix that supports the transition of SMEs towards net zero:
– Environmental regulations and taxes induce investments on net zero practices.
– Consumer demand for low carbon products/services drives the uptake of net
zero practices. Green/sustainable procurement (at the national or city/region
level) could boost demand for net zero products and services and provide the
opportunity for green SMEs to scale-up.
• Owners/managers of SMEs can adopt net zero practices that ease the
trade-offs between environmental and business performance - ‘win-win
scenario’:
– Technological net zero practices (e.g. changes in production or distribution
processes) are able to reduce carbon emissions and to stimulate firm growth.
– Organisational net zero practices do not seem to affect environmental
performance directly, yet, we highlight their significance as we detected indirect
mechanisms, whereby synergies amongst technological and organisational net
zero practices drive performance.

24. Thank you!
Questions?
Effie Kesidoua & Anastasia Rib
aERC & Leeds University Business School
bERC, Aston Business School
ERC & Lloyds Banking Group Centre for
Business Prosperity
Research Showcase: SME Business Futures

25. SMEs and Digitalisation
ERC Research Showcase
22 April 2021
Prof Jun Du
Lloyds Banking Group Centre for
Business Prosperity &
Aston Business School
Dr Hoang Minh Luong
ERC & Queen’s University Belfast
Dr Anastasia Ri
ERC & Aston Business School

26. Background – Why do we care?
• Digital technology is widespread and spreading
fast (World Bank, 2016; Chakravorti et al., 2017)
• Digital technologies are already shaping the
workforce and the future of work and (OECD,
2017; McKinsey Global institute, 2020)
• Mixed evidence on UK’s digitalisation:
frontrunner (MGI’s Industry Digitalisation Index,
2016; Chakravorti et al., 2017), among
performers but lagging behind EU leaders (DESI
2020, European commission) or ‘modest’ (EIBIS
digitalisation index, 2020).
• Digital technologies contribute to development
through inclusion, efficiency and innovation
(World Bank, 2016)
• The divide in access to digital technologies and
their use persists (World Bank, 2016)
• Digital technologies transform the way firms
innovate (e.g. customer-centric model)
• Evidence base on large companies is rich but less is known about SMEs despite the increasing interest
(IoD, 2018; Lloyds, 2019; BBB, 2019; Be the Business, 2020)
• Covid-19 pandemic has only accelerated the
trend (McKinsey Global institute, 2020; Be the
Business, 2020)

27. Digital
adoption
UK SMEs
Digital
readiness
Research questions
• 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?
Research project : Measuring the Gap / Measuring Diffusion
Digital readiness and adoption in SMEs
But… 2020 - not a usual year…
Digital
adoption
Antecedents Outcomes
Digital Technology Readiness

28. ERC Business Futures survey
Fieldwork September-November 2020 (CATI)
– Net Zero attitudes and practices
– Digital technologies uptake
– Impact of Covid-19
1019
UK SMEs
• businesses employing less than
250 employees
• representative of the main
economic sectors
• Small businesses of less than 50 employees accounted for about 86 per cent of the sample. The
other 14 per cent were medium-sized businesses employing between 50 and 249 employees.
• Well established businesses which started trading more than 10 years ago made up to 80 per
cent of interviewed SMEs. Young businesses of 5 years old or less accounted for just over 5 per
cent and businesses between 6 and 10 years old made up to about 15 per cent.

29. Digital readiness – defining the concept and constructing a measure
Digital technology readiness - a multi-dimensional concept that we define
as propensity of a firm to embrace and use emerging digital technologies in
pursuit of strategic business goals and short term objectives.
digital strategy
skills
previous adoption
knowledge
digital for innovation
success
expectation
business
environment
competition
benefits
customers’ needs
Digital
Technology
Readiness
Technological &
organisational
(internal)
Environmental
(external)

30. Digital readiness – defining the concept and constructing a measure
78%
62%
88%
82%
61%
87%
78%
94%
89%
70%
0% 20% 40% 60% 80% 100%
Skills: 'We have the skills to
introduce any new technologies'
Digital strategy: 'We have a digital
strategy'
Previous adoption: 'Digital
technology we have adopted met
our expectations'
Knowledge: 'We keep up with the
latest technologies'
Digital for Innovation: 'Our
innovation relies on having the
latest digital technologies'
SMALL MEDIUM
91%
79%
78%
96%
93%
65%
96%
88%
83%
97%
95%
76%
0% 20% 40% 60% 80% 100% 120%
Expectation: 'We expect our
business will use more digital
technologies in future'
Success: 'Businesses who use
digital technologies are more
successful'
Business environment: 'More and
more businesses are using new
technologies'
Competition: 'Investing in digital
solutions will keep us ahead of
competitors'
Perceived benefits: 'Introducing
new technologies takes time but
the benefits are worth it'
Customers' needs: 'Customers
expect us to use the latest digital
technologies'
SMALL MEDIUM
Source: ERC Business Futures Survey 2020

31. 1%
10%
10%
36%
46%
59%
62%
73%
73%
77%
80%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
None of these - do not…
AR and VR
AI and machine learning
Computer Aided Design
CRM
Cloud computing…
Video conferencing
Internet of Things
Website to sell…
Online marketing /…
Accounting / HR software
Small
1%
18%
23%
44%
52%
70%
75%
68%
72%
72%
77%
0% 20% 40% 60% 80% 100%
Medium
5
53%
56%
58%
26/31%
3/8%
1/2%
Sources:
Going Digital (2019),
OECD (2019),
LSBS 2019
Source: ERC Business Futures Survey 2020
2019 2020
Median number of DT used
50% of SMEs use between 4 and 7 DT
Digital technologies adoption rates

32. Digitalised SMEs – what data tells us?
Source: ERC Business Futures Survey 2020
37%
18%
29%
56%
57%
72%
42%
76%
19%
15%
26%
53%
41%
46%
31%
54%
0% 10% 20% 30% 40% 50% 60% 70% 80%
Export
Employment increased
Turnover increased
Turnover did not decrease
Product innovation objective
Process innovation objective
Perceived competition
Business plan
Digitalised SMEs Other
5
or more different
digital technologies

33. 30%
35%
35%
37%
31%
34%
2%
19%
30%
24%
29%
35%
23%
24%
4%
26%
0% 5% 10% 15% 20% 25% 30% 35% 40%
Lack of funds / Access to finance
Broadband
Compatibility with existing equipment
Digital skills
Internal resistance to change /workforce engagement
Cyber risk
Other
No obstacles
Digitalised SMEs Other
Digitalised SMEs – what data tells us?
Source: ERC Business Futures Survey 2020
5
or more different
digital technologies Barriers to digital

34. Digital
Technology
Readiness
Digital readiness – a predictor of digital adoption?
Technological &
organisational
(internal)
Environmental
(external)
E-
comm
Online
marketing
Acc / HR ‘Zoom’
CRM Cloud IoT
CAD
AR /
VR
AI
Barriers
Controls: exporter, business plan,
size, age, sector, geography
Priorities: product and process
innovation

35. Digital readiness – a predictor of digital adoption?
E-sales
Online
marketing
Acc / HR ‘Zoom’
CRM
Cloud IoT
CAD
AR /
VR
AI
+** +** + +** + + +*** +*** +***+***
+***+ +*** +*** + - +*** +** +*** +*
Digital
Technology
Readiness
Technological &
organisational
(internal)
Environmental
(external)
Results indicate a positive and statistically significant relationship between level digital technology
readiness (through both technological & organisational and environmental dimensions) and the
probability of adoption of the following technologies: E-sales, CRM, video-conferencing and other
collaborative tools, cloud computing, Augmented and Virtual Reality, AI and machine learning.
This confirms our hypothesis that Digital technology readiness is a good predictor of adoption
behaviour.
Digitalised
SME
+*** +***

36. Digital
Technology
Readiness
Digital readiness – a predictor of 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
+*** +*
-** +* +***

37. Source: ERC Business Futures Survey 2020
2020 – Zoom boom … but not only!
What changes in response to COVID-19 challenges?
62%
made some changes in their use of digital
technologies in response to the pandemic
21%
27%
48%
49%
49%
51%
52%
64%
64%
95%
77%
69%
45%
47%
46%
35%
45%
33%
34%
3%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Accounting / HR software
CAD software
AI and machine learning
Website to sell goods or services
CRM
AR and VR
Cloud computing solutions
Online marketing and social media
Internet of things
Video conferencing
Using more than before Using the same as before Using less than before
Changes in the intensity of use (% of users)

38. Digital
Technology
Readiness
Digital Readiness and Digitalisation -
to weather the Covid ‘storm’?
Technological &
organisational
(internal)
Environmental
(external)
Digitalised
SME (0/1)
Innovation
outcome (0/1)
Turnover growth or
stability (0/1)
ns
+**
+***
+***
+*
+***
+***
No statistically significant direct relationship between
digitalisation and turnover performance of UK SMEs in
2020
But digitalised SMEs were more likely to better weather
the covid storm and avoid turnover loss if digital
technologies they used resulted in increased innovation
activity

39. Digital
Technology
Readiness
Ongoing analysis –
In depth mediating and moderating analysis
Digital
technologies
adoption
Technological &
organisational
(internal)
Environmental
(external)
Business strategies
Barriers
Mediators
Moderators

40. Concluding remarks
• 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 perceptions of internal digital readiness and
perceptions of external environment are associated with
higher probability of digital adoption.
• 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.

41. Thank you
If you would like any more information please contact
Dr Anastasia Ri (a.ri@aston.ac.uk)
More details about the work of the ERC and our latest events can be found at:
www.enterpriseresearch.ac.uk

42. Dr Maria Wishart
Maria.Wishart@wbs.ac.uk
@maria_wishart
Rural firms: the Net Zero
agenda and Digital Adoption

43. Rural enterprise
• Scale of UK rural enterprise
– England: 24% of registered businesses & 13% of employees1
– Scotland: 23% of registered businesses & 17% of employees2
– Wales: 41% of registered businesses & 32% of employees3
• Proportionately more SMEs in rural areas, with more sole traders
and micro businesses, than in urban areas (UK Government, 2020)
• 71% of people employed by rural businesses in England are in
SMEs vs 41 % in urban businesses (UK Government, 2020)
• 85% of rural businesses in England are not related to forestry,
farming or fishing (BEIS, 2018)
1 House of Lords, 2020. 2 Scottish Government, 2021. 3 CLA, 2016.

44. • Launched in September 2020
• Partnership institutions:
– Centre for Rural Economy (CRE) & Newcastle Business School
– Countryside & Community Research Institute (CCRI) – University of
Gloucestershire & Royal Agricultural University
– Enterprise Research Centre (ERC) – Warwick University
• Three main areas of activity:
– Addressing gaps in our current knowledge of rural enterprise and
innovation
– Developing new approaches to rural innovation that can be scaled up
– Providing evidence to influence better policy and support for rural
businesses

45. Business Futures Survey: rural data
Data collected during autumn 2020
– 1019 private sector firms with between 7 and 249 employees
– 804 firms (79 per cent) with rural/urban marker

46. Net Zero and rural firms: Literature
• Strong focus on large firms (Kenington et al, 2020)
• SME research has focused on drivers and barriers
– Stakeholder pressure (Seroka-Stolke & Fijorek, 2020), competitive
pressure (Tyler et al, 2020) and legislation (Brammer et al, 2012)
– Low environmental awareness, high perceived costs/lack of business
support (Brammer et al, 2012) and limited technical capabilities (Parker
et al, 2009)
• Size (Wong et al, 2020), sector (e.g., Cantele & Cassia, 2020) and
national context-related differences (e.g., Scuotto et al, 2020)
• Limited consideration of SME diversity and aspirations (Parker,
2009) and rural/urban location

47. Findings: Rural firms focus more on
environmental issues than urban firms.
Rural firms are more likely ‘always’ to consider the
environmental implications of their business decisions
Base: 804 firms. 600 urban, 204 rural

48. Findings: Rural firms focus more on
environmental issues than urban firms.
Rural firms are more likely to agree that environmental impact
should be part of a business’s bottom line
Base: 804 firms. 600 urban, 204 rural

49. Findings: Rural firms focus more on
environmental issues than urban firms.
Rural firms are more likely to have implemented an
Environmental Management System (EMS)
Base: 804 firms. 600 urban, 204 rural

50. Findings: Rural firms focus more on
environmental issues than urban firms.
Rural firms are more likely to have taken specific steps to
improve their environmental impact
Base: 804 firms. 600 urban, 204 rural

51. Findings: Rural firms are influenced by
different factors in reducing emissions
Rural firms are more likely to agree that reduced costs,
voluntary agreements and government grants are moderately,
very or extremely important in influencing efforts to reduce
emissions
Base: 804 firms. 600 urban, 204 rural

52. Digital Adoption and rural firms:
Literature
• Resource and skill limitations can make digital adoption complex & drive a
piecemeal approach in SMEs (Garzoni et al, 2019)
• Rural firm digital adoption research has focused on connectivity and inclusion
(Salemink et al, 2017)
– Absence of high-speed internet access has been a theme for two decades (e.g., Doherty et al,
2017; Philip and Williams, 2019)
– Poor connectivity leads to poor development of digital skills in rural firms, restricting growth and
internationalization (Bowen and Morris, 2019)
• Company size, sector and attitudes of owner-managers have been found to impact
on rural digital adoption (e.g., Grimes, 2003)

53. Findings: Rural firms approach digital
technologies differently
Rural firms are less likely to agree with the statement ‘We have a
digital strategy’
Base: 743 firms 555 urban, 188 rural

54. Findings: Rural firms approach digital
technologies differently
Rural firms are less likely to agree with the statement ‘We have
the skills to introduce any new technologies’
Base: 743 firms 555 urban, 188 rural

55. Findings: Rural firms have lower levels
of digital adoption than urban firms
Rural firms have lower adoption levels of key technologies than
urban firms
Base: 804 firms. 600 urban, 204 rural

56. Findings: Rural firms experience
different barriers to digital adoption
Broadband capacity and internal resistance to change identified
as major obstacles to digital adoption in rural firms
Base: 752 firms 563 urban, 189 rural

57. Rural firms, net zero and digital
adoption: summary
Our findings indicate underlying differences between rural and urban
firms. Rural firms:
– Express different attitudes towards environmental issues and have a
stronger focus on net zero practices than urban firms
– Are influenced by different factors to adopt environmental practices than
urban firms
– Approach digital technologies differently and have lower levels of
adoption of key digital technologies
– Experience some barriers to digital adoption more acutely than urban
firms
But to what extent can these differences be attributed to rurality?
– Recent innovation research suggests that leader aspirations are more
important than location in explaining rural/urban differences (Ozusaglam
& Roper, 2021)

58. Future research agenda
Top level differences observed – we need to explore and explain them
Net Zero & rural:
• The link between business models and net zero practices for rural firms
• The role of external stakeholders (e.g., customers, suppliers, regulators) and
external factors (e.g., grants, funding availability) in driving net zero adoption
• The ways in which rural business leaders’ individual ambitions drive net zero
Digital Adoption & rural:
• The ways in which rural business leaders’ attitudes and entrepreneurial
orientation can drive digital adoption in their firms
• Digital adoption processes in rural firms
• The ways in which rural firms experience barriers to digital adoption

59. Forthcoming reports:
Wishart, Roper & Kesidou (2021) Rural SMEs and the net zero agenda
Wishart & Roper (2021) Digital adoption in rural SMEs
Ozusaglam & Roper (2021) It’s not where you are, it’s where you want to
go. Ambition, innovation and digital innovation in urban and rural micro-
businesses
https://ncl.ac.uk/nicre/research/

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