Scaling appropriately an issue for digital startups, says report

Digital startups often scale their customer bases too quickly before they have had time to implement the appropriate infrastructure

Digital startups often scale their customer bases too quickly before they have had time to implement the appropriate infrastructure, according to Innovate UK’s strategy report.

The government's technology strategy board – rebranded as Innovate UK – stated in its research that this often leads to a “go big or go home” attitude which forces small businesses to expand more quickly, as digital businesses are more likely to succeed if they have a larger customer base.

This is one of the main issues facing the UK as it tries to move towards a more digital future, alongside the disruptive nature of technology and a lack of connectivity in rural areas.

To encourage innovation in the UK, Innovate UK will spend £30m on supporting innovative digital business projects over the next four years, according to its strategy report.

“Our digital economy programme will commit £15m a year to support innovative business projects and a further £15m a year as core funding to support the Connected Digital Economy Catapult centre, the Open Data Institute and Tech City UK – each of which has a role in delivering the objectives of our strategy,” the report said.

The report revealed the digital services market will be worth the same as the UK economy by the year 2020. But the UK has an advantage in the digital sector due to its strength in communications and 107,000 software businesses nationwide.

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Innovate UK advises businesses to take advantage of the digital society that sees consumers checking their devices up to 150 times a day.

To do this, the board has outlined its five key objectives for encouraging the digital economy, including encouraging digital innovators, ensuring a focus on users, providing technical toolkits to innovators, developing the appropriate ecosystems and ensuring innovations are sustainable.

“The impact of digital platforms, products and services will go far beyond the information and communications technology (ICT) sector,” the report said.

According to the Innovate UK board, creative industries in particular hold massive potential for digital growth, and the UK’s exports of creative products are among the highest in the world.

In 2014, the UK’s technology trade association, TechUK, launched a digital guide that detailed how the next government must turn the UK into a digital leader over the next five years, pointing to political parties to build digital innovation into their manifestos.

“Over the next five years, the UK has the opportunity not just to be a digital leader, but to use digital technologies to address the fundamental long-term social and economic challenges that will determine our future, and that of our children and grandchildren,” read TechUK’s manifesto.

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