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Slow technology adoption linked to low productivity among UK business, CBI says

CBI calls on businesses to adopt more “tested technologies” and says government should highlight the need for tech adoption in the industrial strategy

The Confederation of British Industry (CBI) has called on businesses to become “magpies” and adopt useful technologies as the UK’s productivity is linked to slow technology adoption.

The CBI report, entitled From ostrich to magpie, highlights the need for UK businesses to adopt existing technologies to bridge the country’s productivity and pay gap.

“Low take-up of readily available technologies and management best practices is driving the UK’s productivity problem,” it said. “While the UK’s best performing firms are highly innovative, best practice must reach a greater range of businesses, improving productivity through the adoption of technologies and ideas that are proven.”

The report added that the UK needed more “magpies”, who have the skill and will to find and adopt readily available technologies and management best practices”, rather than “ostriches” who stick to what they know.

“Tackling this ‘failure to adopt’ could help reduce inequality between firms’ productivity and people’s pay, adding more than £100bn to UK Gross Value Added (GVA).”  

CBI director general Carolyn Fairbairn said businesses taking up technologies at different rates leads to variation in wages, opportunities and living standards for people across the UK. 

“Failing to adopt the nuts and bolts technologies of today is leaving a yawning gap in productivity and pay between businesses”
Carolyn Fairbairn, CBI

“We are being very deliberate in drawing the link between what we see as low uptake of technology, and productivity and living standards. The eyes of the business world can often be on the next exciting big thing, the cutting-edge technology – and of course, it does offer huge potential – but too many are missing out on what’s right under their nose,” said Fairbairn.

“Failing to adopt the nuts and bolts technologies of today is leaving a yawning gap in productivity and pay between businesses,” she added. “The kind of technologies we’re talking about are the proven ones like cloud, mobile, e-purchasing, cyber security, CRM [customer relationship management] – these are all technologies that the best firms are already using.” 

The CBI report said uptake of technology such as CRM and enterprise resource planning (ERP) systems in the UK today is lower than it was in Denmark in 2009. The UK also has bigger differences in management quality between the top and bottom firms than any other G7 country.   

At the CBI annual conference last week, prime minister Theresa May challenged industry to invest more in research and development (R&D) to ensure the country is at the forefront of new technological developments.  

Fairbairn said May was right in asking industry to do more, but said the environment “must be right”.

“The government’s role is to create the right backdrop for firms to invest, and it’s then up to businesses of all sizes to act boldly and take up the challenge,” she said. 

Read more about UK business and technology

The report highlighted the need for making “innovation diffusion a central theme in the upcoming industrial strategy, adding that the Department for Business, Energy and Industrial Strategy (BEIS) should make sure it has a plan for increasing the adoption of technologies, including identifying accountable bodies and measurable targets. 

It said that over the next 12 months, BEIS and the Treasury should set up a series of “innovation diffusion pilots to test different types of on-the-ground support for businesses”, as well as run a “five technologies all companies could adopt” campaign together with the CBI. 

“Too many businesses shy away from digital adoption rather than seizing the opportunity it presents, and this ‘ostrich’ mentality is restraining productivity and international competitiveness”
Jeremy Silver, Digital Catapult

The organisation is still narrowing down which technologies would form those five, and hopes to have that clear by the end of the year. 

The CBI also called on Innovate UK to launch a competition to create a TripAdvisor-type platform that would serve as a “one-stop shop for firms to assess technologies and technology providers, and navigate business support services for adopting technology and management best practice”.  

Commenting on the report, Digital Catapult CEO Jeremy Silver said there needed to be a “shift in the national business psyche” when it came to technology.

“Too many businesses shy away from digital adoption rather than seizing the opportunity it presents, and this ‘ostrich’ mentality is restraining productivity and international competitiveness. We need to encourage businesses to raise their heads from the sand and take the small steps that lead to wider digital transformation and a more sustainable future,” he said.

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