Broadband capacity is major obstacle to digital adoption for rural businesses

Businesses in rural areas have cited broadband capacity as a major obstacle to digital adoption in the latest research by the National Innovation Centre for Rural Enterprise (NICRE)

The study Digital adoption in rural SMEs found that 42% of rural firms compared to 31% of urban firms said it was a barrier they faced to embracing digital technologies.

The research compared the attitudes and practices of rural and urban-based SMEs with regard to digital technologies, and asked whether the digital adoption of UK small firms varied depending on their geographical location.

It found three main differences:

• Rural firms approach digital technologies differently from urban firms. Rural firms were ten per cent less likely to have a digital strategy than their urban counterparts. 76% of rural firms compared to 82% of urban firms said that they keep up with the latest technologies, while 57% of rural firms compared to 51% of urban firms said that they felt that their business could be successful without digital technologies. 
• Rural firms have lower levels of digital adoption than urban firms. 31% of rural vs 39% of urban firms had adopted Computer Aided Design, 58% of rural compared to 67% of urban firms had adopted video conferencing, and Customer Relationship Management software had been adopted by 42% of rural firms compared to 49% of urban firms. While both rural and urban firms that had adopted digital technologies tended to say that their business model had evolved or changed as a consequence, rural firms were more likely than urban firms to assert a partial change (51% vs 59%) than a significant change (12% vs 17%).
• Rural firms experience different barriers to digital adoption than their urban counterparts. 42% of rural firms compared to 31% of urban firms cited broadband capacity as a major obstacle to digital adoption. Rural firms were ten per cent more likely to point to internal resistance to change (39% vs 29%) as an obstacle to digital adoption than their urban counterparts.

The research was carried out by Dr Maria Wishart and Prof Stephen Roper from NICRE’s founding university partner Enterprise Research Centre using data collected from 804 small firms in England, Wales, Scotland and Northern Ireland.

Dr Wishart said:

“The divergence we have identified between rural and urban firms has implications for policy initiatives aimed at driving digital adoption in UK firms. Rural firms are already less engaged with digital technologies than their urban counterparts, a gap which has the potential to drive division.

“Broadband capacity remains problematic, and will need to be tackled for rural firms to be able to embrace digital technologies now and in the future. Policy initiatives will need to acknowledge and address these differences to ensure that rural firms have the opportunity, skills and confidence to adopt digital technologies.”

NICRE undertakes research to fill gaps in current knowledge of rural enterprise and innovation and provides evidence to influence better policy and support for rural businesses.