Unlocking rural digital potential could add up to £26bn annually to the UK economy, says a new report.

Research by Rural England and Scotland’s Rural College shows that greater use of digital tools and services could deliver as much as 8.8% of additional Gross Value Added for the rural economy.

Annual business turnover in rural areas could grow by at least £15 billion, with rural microbusiness and small-sized business seeing the greatest returns, it suggests.

    See also: Rural broadband is 'vital service' – Gove

The report – sponsored by e-commerce giant Amazon – outlines five themes for the private and public sectors to help support this opportunity.

They include Rural Digital Enterprise Hubs, training and skills development and future support programmes targeting digital growth for rural businesses

The report found that the South West, Eastern and South East regions, which have the largest share of rural businesses in the country, are set to benefit the most from greater digital adoption.

Transformation

Amazon UK country manager Doug Gurr said opportunities for rural entrepreneurs had been transformed through e-commerce, faster broadband and better delivery services over the past 20 years.

But he added: “There’s much further to go before anyone can say the rural-urban divide has closed.”

“Embracing digital technology not only benefits the economy, it also allows rural communities to combine great quality of life with access to global opportunities.”

If digital constraints were removed and rural digital potential realised, an estimated £15bn or more could also be generated in additional business turnover.

Biggest winners

Microbusinesses (0-9 employees) in rural areas would see the greatest benefit, generating an additional £9.4bn in annual business turnover.

They would be followed by £4.6bn for small businesses (10-49 employees), £700m for medium-sized businesses (50-249 employees) and £200m for large businesses (over 250 employees).

Brian Wilson, chair of directors at independent think tank Rural England, said rural businesses were already largely strong digital adopters, and most recognised the importance of going further.

But he added: “Their ability to go digital has been held back by constraints which have included connectivity but also extend to a lack of skills, training and resources.”

To help address these constraints and boost rural economic productivity, some straight forward ‘quick wins’ could have a significant and positive impact on the quality of rural life.

Better services

They include

* Streamlining digital support services – Setting up a single portal for information and local directories giving guidance and support that fulfils the digital needs of rural businesses

* Digital Enterprise Hubs – Establishing hubs in rural towns which businesses can use or visit for better connectivity, start-up workspace, hot-desk space and training

* Training and skills development - Local collaboration between employers and education providers, improving retraining opportunities and ensuring short training courses and online tools are more readily available to small business owners for life-long learning

* Accelerated business adoption of digital connectivity - Encourage businesses using superfast broadband to champion its benefits to their peers locally, offering practical real-life examples of success, and prioritise investment in connectivity and digital tools.

* Stronger rural targeting by existing policies and strategies - Making support for digital growth a key objective in future rural business support programmes and encourage larger technology-driven firms to implement policies focused on greater digital adoption in rural areas that shares best practice and provides practical hands-on support for smaller companies

Defra secretary Michael Gove welcomed the report.

He said: “The internet has the potential to ensure the countryside can flourish in a way that combines preserving the environment with economic dynamism.

“Digital technology can open opportunities, build skills and connect rural businesses to global markets."

Growth potential

Almost four-in-five rural business owners believe digital tools and services are important to their future growth potential.

But over half (52 per cent) of rural business owners say they face some form of skills-related obstacle to adopting digital to unlock more growth.

Countryside Alliance head of policy Sarah Lee said the report showed that a rural digital strategy should be central to the Government’s plans to create a stronger economy and fairer society.

“Achieving full connectivity, investing in skills development and encouraging more rural businesses to maximise the digital opportunities already in existence will enable rural communities to achieve their full economic potential.”

Further details and the full report can be accessed here