• Poor connectivity, lack of funding and low numbers of apprenticeship opportunities is causing the North East to fall behind rest of the UK in the ‘digital postcode lottery’
  • Digital operations consultancy firm, GAIN LINE, is calling for more to be done for disproportionately affects areas 
  • Businesses outside of London 20% less likely to receive funding towards digital projects 

 

North East businesses are falling into the ‘digital postcode lottery’ trap, according to new research by GAIN LINE.

An analysis of some of the UKs leading digital data found that over that past year the North East has been disproportionately affected by gaps in funding for innovation projects, digital job roles and connectivity, compared to those in London and other parts of the UK.

These setbacks are creating a digital divide where SMEs in affected areas will find it much more difficult to succeed with going digital, causing higher operational costs and negatively impacted efficiency.

The research calls upon data from multiple sources, including: Innovate UK’s Smart Grants; Apprenticeships.org’s digital apprenticeship vacancies and a survey of 1,000 UK SMEs commissioned by GAIN LINE. 

It found that just 2% of Innovate UK’s Smart Grant funding was awarded to businesses in the North East. This funding is crucial for SMEs and offers successful applicants a share of up to £25 million for digital innovation projects that can benefit the UK economy. 

Comparatively, more than 30% was awarded to organisations in London and 12% to the South East – collectively twenty times more than the North East.

A survey conducted by GAIN LINE also showed that as well as having less opportunities for digital grants, these areas outside of London and the south also saw a lack of uptake in digital tools which helped with business operations during the Covid-19 disruptions.

The North East has some of the lowest rates of digital uptake, with 30% still relying on paper to manage business operations. This means SMEs in the region will have struggled much more than other areas when trying to operate from home, as well as being impacted by higher operating costs and the additional time working with paper systems requires.

Many SME owners and those in senior positions, are unaware of just how much time and money can be saved by digitising operations,” says Jonathan Ward from GAIN LINE, “for some, it can seem daunting to make the change, but ditching the paper offers better visibility of an organisation’s employees and inefficiencies which in turn provides valuable insight in how to run it better.”

This digital divide could also be hindering young people’s career opportunities. Analysis of Apprenticeships.org’s Digital Apprenticeship vacancies over the last 12 months by geographical location revealed that 22% of the vacancies were located in London and 17.29% in the South East, compared to just 4% in the North East.

“Developing digital skills in young people is crucial for their future careers,” says Jonathan, “but as well as being necessary for personal progression, bringing in younger generations helps to keep businesses fresh with new outlooks, and new technical skills.”

“The distribution of the sources in our research paints an accurate picture of the digital divide we currently have in Britain,” says Jonathan from GAIN LINE, “while London and surrounding areas are thriving in terms of technology and innovation, business owners in the North East of England are missing out. We need better messaging about digital opportunities targeting those areas, as well as funding initiatives.

“Rural commercial properties are much more affordable than their city-centre equivalents, which could be attractive to small business owners looking to keep overheads down. However, lack of apprenticeships, lower opportunities for digital grants, and slower internet speeds make it difficult for businesses to thrive.

“It’s a missed opportunity for both the smaller businesses and the local economies, which could greatly benefit from attracting more small businesses to the area.”

For more information on the digital divide visit ​​gainline.co.uk/the-digital-postcode-lottery