Small businesses could gain an extra £20bn if final fifth close the ‘digital gap’, eBay finds

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The UK economy could be £8.4bn larger if the final fifth (23%) of small businesses without key digital capabilities closed the ‘digital gap’, according to new research from eBay UK.

Small businesses in Britain without digital infrastructure including a website, social media channels or a presence on an online marketplace are missing out on £20.2bn in revenue each year, according to new research from Development Economics, commissioned by eBay. This equates to £20,000 in increased revenue or efficiency savings per business, across all sectors from retail to manufacturing.

The research was released to coincide with the start of the 2017 Do it Digital campaign, which aims to help an additional one million UK small businesses becoming more digitally engaged during 2017. eBay UK will be the first business to make a public pledge towards reaching the one million target. Its Director of UK trading, Murray Lambell, will today announce the launch of eBay for Business in the UK. This new initiative will provide tools, guidance and resources to small businesses looking to get more digital this year.

More than 200,000 small British retail businesses already trade with customers across the globe via eBay. Many began as purely bricks and mortar enterprises before taking the leap from analogue to digital. Bristol-based Bookbarn International launched as a physical book store in 2000, but in 2008 started selling on a website and digital marketplaces. Today, it has an annual turnover of £1.2m, with up to 85 per cent of this coming from its online business.

Director William Pryor said: “Taking the business online seemed slightly daunting at first, due to the large volume of books we needed to create listings for, but the speed and volume of sales we started seeing straightaway quickly made it all worth it!”

Yet more support is needed to help small businesses embrace the opportunity that ecommerce presents.  According to YouGov, a quarter (23% of SMEs surveyed have no website, four in ten (40%) no social media channels and nearly three quarters (72%) lack a presence an online marketplace.

Of those surveyed, over half (57%) without a website said they had no plans to change this in 2017, citing a lack of time and expertise as well as security concerns as barriers.

Minister of State for Digital and Culture Matt Hancock said: “Digital knowhow can help firms save money, increase profits and improve productivity, yet too many firms still do not use websites, trading platforms or social media channels.

“It is essential we take every opportunity to create the world-leading businesses of tomorrow, so I welcome Do It Digital’s campaign and pledges from other organisations to increase digital skills in small businesses.”

Lambell said: “Our sellers tell us that there are clear benefits to going online, with access to our marketplace enabling a British small business to export to markets as far afield as Australia or Canada with ease. If we can help the final fifth of small businesses without digital infrastructure close that gap, our research shows that the UK will see clear benefits in terms of jobs and growth – and small businesses themselves will see an average growth of £20,000 in revenue.”

‘We are launching eBay for Business today to provide tools, guidance and resources for small businesses who are looking to make the leap.’

Michelle Ovens MBE, director at Do It Digital, said: “All evidence supports the belief that there are clear financial benefits for small businesses embracing digital. But we also know that many don’t have the time or access to the expertise to take advantage of what’s available to them. We want to help change that, one step at a time, by showing that digital needn’t mean a leap into the unknown by giving them access to support and guidance on how to engage in a way that is best for their particular business.”