One of the most promising ways of fostering growth among UK small businesses is to increase their adoption of digital technologies. Yet, there are numerous barriers - many of which relate to the attitudes and perceptions of small business leaders. Dr Halima Jibril and Prof Stephen Roper explain what works for supporting firms to go digital.
One of the most promising ways of fostering growth among UK small businesses is to increase their adoption of digital technologies. Digital technologies such as E-commerce systems, Customer Relationship Management software and Cloud Computing can simplify important aspects of the business and increase sales and efficiency.[1] Yet, there are numerous barriers to digital adoption in small businesses, and many of these relate to the attitudes and perceptions of small business leaders. Business leaders may doubt the relevance of using digital technologies in their firms, or they may doubt their ability to effectively integrate and implement these technologies. They may also have concerns about the costs of investing in technologies and the uncertainty about returns. So, how can we encourage small businesses to see the potential benefits of adopting digital technologies? How can we foster greater confidence and a more positive attitude towards digital adoption?
One way to do this is to address the informational barriers to digital adoption, for example through training programmes that aim to make businesses aware of the availability, relevance and benefits of digital technologies. To be useful to policymakers and practitioners, we will also need strong evidence that such a programme works to address these barriers. This is what the Evolve Digital trial aimed to do. Evolve Digital was a business training programme designed to boost digital adoption through providing small, family-owned firms with an online, cohort-based, and facilitated opportunity for learning about digital technologies. To enable a rigorous evaluation of its effectiveness, Evolve Digital was designed as an experiment, implemented through a Randomised Controlled Trial. Randomised Controlled Trials are the gold standard in assessing the effectiveness of interventions,[2] and are routinely used in healthcare research to test the effectiveness of new drugs, as we saw, for example, in the COVID-19 vaccine trials. The Evolve Digital trial forms part of the Government’s Business Basics programme, which aims to deliver robust evidence of what works in improving UK productivity.
What did Evolve Digital trial look like?
Evolve Digital targeted small family businesses with relatively low adoption of digital technologies. These are businesses with fewer than fifty employees and fewer than three digital technologies already in use. The programme took place in the second half of 2021, during the Covid-19 pandemic, and was delivered fully online.[3]
To conduct the experiment, businesses were randomly allocated to a ‘Treatment’ or ‘Control’ group, with each group having around 100 businesses. This random allocation is important because it ensures that, on average, firms in the Treatment and Control groups are very similar to each other before the start of the training programme. Businesses in the Treatment group were then offered 42 hours of facilitated cohort-based learning over several weeks, focused on digital technology adoption. This comprised a series of online sessions supported by access to a library of digital materials, and the use of social media groups to encourage further peer interactions. By contrast, businesses in the Control group received only access to online learning materials for self-study; they had neither peer interactions nor expert facilitation. Since the two groups were similar before the programme, differences between them after the programme should accurately reflect the influence of the programme.
Did the trial work?
Six months after the trial, we followed up firms in both the Treatment and Control groups. We asked questions aimed at measuring the psychological and behavioural factors that are important for technology adoption,[4] such as their confidence in using technologies, their perceptions of the relevance and usefulness of technologies for their businesses, and their intentions to use more technologies. The underlying rationale is that, in the short term, the program should improve their attitudes towards digital adoption and increase their confidence to adopt, indicating the breaking down of some of the behavioural and attitudinal barriers to digital adoption.
We found that businesses in the Treatment group had greater confidence in their ability to use new digital technologies. This includes confidence in their ability to identify the digital technologies that are relevant to their business and to create the conditions necessary for using them, for example through convincing or training other members of the business to use technologies. In addition, businesses in the Treatment group had more positive perceptions of the usefulness of technologies, better attitudes towards using technologies, and greater intentions to adopt new technologies within six months. Qualitative feedback indicated that these businesses also valued the reflective and participatory aspects of the programme, underlining the importance of peer interactions and expert facilitation.
What does this mean for policy and practice?
The positive impacts of the Evolve Digital programme suggest the potential value of short online training courses to support digital adoption in small firms, including family firms that may be more reluctant to innovate or adopt technologies given their higher risk aversion.[5] It is a cost-effective intervention that complements other national programmes seeking to encourage digital adoption, such as the Made Smarter and Help to Grow: Digital programmes. Indeed, Evolve Digital might act as a feeder programme for both of these initiatives. It can help businesses, particularly the more reluctant, to develop the necessary confidence and intention to adopt digital technologies, potentially facilitating successful participation in the Made Smarter or Help to Grow: Digital programmes. It may also act as a cost-effective route to the digital transformation of small businesses that are not covered by these larger programmes.
The fully online delivery format of the Evolve Digital programme provides a potentially interesting learning point for practitioners involved in delivering business support programmes. Evolve Digital was initially planned as a face-to-face programme with intensive peer interactions, but the pandemic necessitated the move to an online format. On the one hand, this reduced opportunities for deeper interactions that are important for building trust between businesses and fostering learning networks. On the other hand, the online format meant that the programme was more accessible. It also reduced travel overhead for businesses and may have increased take-up and participation in the various elements of the programme. Despite the online setting, it proved possible to establish strong social networks between participants – or at least social relationships between sub-groups of participants – that helped and supported both the confidence and intention to implement digital technologies. The success of the programme therefore lends support to the use of online delivery formats as credible, accessible and cost-effective alternatives to face-to-face delivery, especially where the latter is infeasible or costly.
For more details on the programme and on the implementation and analysis of the Randomised Controlled trial, view the full evaluation report.
Press release: What works for supporting firms to go digital
[1] ERC State of Small Business Britain 2018, Table 6.1. https://www.enterpriseresearch.ac.uk/publications/state-small-business-britain-report-2018/
[2] https://whatworksgrowth.org/resources/the-scientific-maryland-scale/
[3] Evolve Digital was delivered through Start and Grow UK, with programme materials developed by Lancaster University Management School. Funding for the trial was provided by BEIS Business Basics programme.
[4] We build on the theoretical assumptions of the Technology Acceptance Model (TAM) (Davis, Bagozzi, & Warshaw, 1989): Davis, F. D., Bagozzi, R. P., & Warshaw, P. R. (1989). User acceptance of computer technology: A comparison of two theoretical models. Management Science, 35(8), 982-1003.
[5] Family firms are especially risk averse- see for example Hiebl, M.R., (2013). Risk aversion in family firms: what do we really know? The Journal of Risk Finance, 14(1), 49–70.
The views and opinions expressed in this post are those of the author(s) and not necessarily those of the Bennett Institute for Public Policy.
