The Digital Leaders Conference on small businesses and the public sector

Written by James Gadsby Peet, I've been in the digital industry for over 10 years and have worked across small and large charities, as well as my own freelance projects. I am now Director of Digital at the sector leading creative agency William Joseph - is a day of sharing thought leadership, innovative ideas and industry insight on how the country is adapting to and adopting digital technologies to help growth and prosperity. There were lots of lessons for businesses and charities alike, and here’s what we learned.

The theme of today is Digital Adoption & Growth — ie Digital Transformation for UK industry.

First, a bit of context setting:

  • Nominet run 10.5 million domain names.
  • 15.7 million people work in SMEs — about 60% of the private sector employment.
  • 38m people access the internet every day — spending more time consuming media than they do sleeping.
  • 10m people in the UK don’t have any basic skills.
  • 4.2m are sole proprietor businesses — 60% of SMEs — this is the biggest opportunity as they are still largely under-represented across social and web.
  • 30% of small businesses have no website — those that are online on average grow 4 times as fast.

Simon Devonshire, UK Government Entrepreneur in Residence and Sacha Romanovitch

  • The last 5 years have been a golden period for headline digital growth with big organisations like Google, Amazon and Uber. For the rest of the economy, this has actually been very disruptive and driven a lot of concern and fear.
  • Were Brexit and Trumpageddon triggered by people feeling increasingly unconnected from the world and the fear of the unknown change which is clearly taking place.
  • Lostmyname — producing personalised books for children all across the world. A great example of a small business that couldn’t have existed even 5 years ago.
  • Jo Wicks is training 50,000 people everyday which wouldn’t have been possible very recently.
  • Many of the systems we still rely on are highly analogue. For example photocopying passports to get a bank account. Services such as are trying to make these systems more digitally enabled and are crucial for progress.
  • 49% of businesses are not online — this is not an accident, it is a specific decision they are making. There need to be new ways to compel them to get online. Up until this stage it’s largely been about extolling the excitement of the new. I wonder if it’s actually now down to using different tactics playing to the safety, risk and security of not being digital anymore, rather that trying to sell an exciting future. As per my previous blog:
  • Has the pace of change been too fast — leaving lots of people behind without understanding and only fear?
  • The 39 local growth hubs from the UK government have specific targets for getting digital into communities. They are however not being supported in the back end by a framework or shared infrastructure. This is the gap that government should be filling so that ideas can get into the real world sooner.
  • “Shield of expertise” — can be a barrier to collaboration and slow progress when you get people in the room. We need to get better at avoiding the worry there isn’t enough work to go round and genuinely work together to get good ideas to market. We need to grow up.
  • Our grandchildren will look at our era and be incredulous at the amount of data that we throw away. Why are we not monitoring our toilets for data that could help diagnose and track health problems.

What Google are doing to help get organisations online:

  • Google AdWords created £11B of economic value last year. This is the reason that they care about getting people and businesses online.
  • By opening 7 physical Google Garages across the UK, they have been getting out of the London and persuading small organisations of the benefits of getting online.
  • In tandem to this, Google run an online Digital Garage course which anyone can take up for free and cover the basics of digital marketing.
  • After going through these courses, 9 out of 10 people made changes to the way they run their business. 65% had seen positive results and 10% had hired additional digital roles in the organisations.
  • There is currently a natural skew towards young people who are running businesses, rather than the hard to reach traditional sole proprietors — this is the next stage for Google and their garages.

An example of adoption is the Berwick Shellfish Company who were enabled to move from being a trade only wholesaler to adding on an eCommerce business. In their first month they turned over £6,000 and it’s grown from there.

How Samsung want to help

Small businesses have an opportunity because they don’t have any legacy systems — which means they can get ahead of many of their larger competitors.

Organisations are increasingly seeing hardware as a commodity that can be swapped in and out — but that the apps and digital tools they use are the strategic investment decisions that matter most.

Flexible tools that can be swapped in and out with adaptive pricing models are what small organisations need. They have the hardware to use these in their pocket, but finding the right ones for them is the challenge.

What Mastercard are doing to help people do business

Mastercard see themselves as a payments technology company — credit cards are only a small part of what they do. They are investing in tools and services that will enable all kinds of organisations that are currently not making the most of digital to generate value.

Most organisations have multiple bank and operational interfaces combined with physical processes. Mastercard want to drive efficiences within this system.

With their app, as Samsung are doing for technology, Mastercard are looking to create financial tools that are integrated across all of a business’ needs, rather than needing separate apps for each type of experience.

Examples of Inspiring, Innovative & Collaborative Partnerships

CGI & small business partnerships

CGI are consultants to government and industries where information is the key commodity. Their background has been working with large scale partners.

They have realised that moving forward, the cutting edge is going to be at the smaller end of the spectrum. The most exciting stuff is two or three people working round Silicon Roundabout rather than at Oracle. As such, they have started to build strategic partnerships with SMEs rather than acquiring a never ending set of tools.

The Cabinet Office has set a target of 25% of public sector contracts being spent with SMEs to go back into the UK economy.

By partnering with 500 of these SMEs, CGI get access to their technology whilst SMEs get access to CGI’s scale, infrastructure and customers. Both benefit.

One of CGI’s SME partners, Ethos Ltd —

In a large scale organisation, where business case is king, every idea cannot make it through the prioritisation process. This is much easier within start ups as they can chase a singular idea and test whether it’s got legs in the real world. This isn’t possible or efficient, in a large scale corporate environment.

Reciprocal NDA + Ethical Code of Conduct + Credit Check are all the elements that they put on their SME partners.

Startups want to focus on a single industry rather than work across verticals. A digital healthcare app won’t want to work in finance, even if their product might generate value and meet a similar need.

UKCloud & the UK Public Sector

Across the UK, large organisations supply to large organisations. SMEs can’t do so and are left to supply other SMEs. Cloud services and its scalability are changing this to allow start ups to work with big big organisations.

One of the leading examples in this, is the UK government. 5 years there were 8 suppliers that had 80% of the government spend. Through the use of their G-cloud platform, the government have drastically changed this in favour of startups and SMEs. It’s still only at 30% of procurement spend though.

Challenges to adopting the cloud:

  • Some suppliers are drastically opaque about their pricing — the ‘Ryanair model’.
  • Security and location of servers are important and not always obvious.
  • You can get locked in very quickly and without knowing it, making it hard to move applications between providers.

When the cloud works well, it’s able to bring small suppliers and organisations together on a common platform, to deliver big projects at speed and scale. The Ministry of Justice currently have 14 SMEs delivering a single project in 6 weeks, that previously took them 18 months thanks to the UKCloud platform.

Informed Solutions & International exports

Only 11% of start ups and SMEs work beyond the UK borders. When they do, they generate on average an extra £300k of new value that wouldn’t have been possible otherwise.

The opportunity looks to be about £140Bn for the economy.

Only 5% of businesses have plans to start exporting in the next 3 years.

The UK’s IT and communications expertise are highly regarded and the Department of International trade provide significant support for helping these industries to take their knowledge beyond the UK. Chief among these is the new GREAT programme.

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