Just one percent of UK firms are ready for the digital economy ⁰

A new study by Oxford Economics and SAP claims that just one in every 100 organisations in the UK is capitalising on the digital economy, significantly fewer than in comparable European countries such as Germany where the figure is more than 2 in 5 and Spain (22 percent). According to the study, the benefits of digital readiness include greater workforce diversity. The ‘digital winners’ defined by the report have higher female representation at mid-management level level and slightly more women overall. Four in ten of the study’s digital winners globally reported effective diversity programmes, compared to 36 percent of all companies in France, 33 percent in Russia, 30 percent in the UK and 23 percent in Spain.

By examining several common capabilities and practices of high-performing companies, Oxford Economics and SAP identified a group of organisations capitalising on the digital economy, called Digital Winners, comprising 16 percent of all companies surveyed globally. However, in examining Digital Winners across Europe, digital leadership varied widely by country. Germany (41 percent) and Spain (22 percent) outpaced the global average, trailed by France (15 percent), Russia (3 percent) and the United Kingdom (1 percent).

According to the study, Digital Winners:

Embrace diversity and inclusion: Globally, Digital Winners are more likely to see increased diversity in the workforce at the midlevel management level and have a slightly higher proportion of female employees than other companies.

In Europe, diversity levels are not where they should be for most companies, but are higher at those with superior executive leadership and stronger financial performance. On average, 39 percent of Digital Winners globally reported effective diversity programs, compared to 36 percent of all companies in France, 33 percent in Russia, 32 percent in Germany, 30 percent in the United Kingdom and 23 percent in Spain.

Develop millennial executives: Nearly all European companies reported a smaller proportion of millennial executives compared to the global average. While Russia reported a higher percentage of millennials in leadership positions (33 percent vs. 17 percent globally), Germany (16 percent), Spain (6 percent), the United Kingdom (5 percent) and France (1 percent) must prioritize attracting and developing millennial leaders — and also including them in decision making — to accelerate digital transformation.

Around the world, millennial leaders are more pessimistic than other executives about their organisation’s digital readiness. Millennial executives ranked their organisation’s leadership skills between 15 and 23 percentage points lower than non-millennial executives across a variety of attributes, including facilitating collaboration, managing diversity, providing feedback and discouraging bureaucracy.

Engage and develop employees: Employees who work at companies with progressive executive leadership are more satisfied and engaged — and less likely to leave for a new position, according to the study. While the United Kingdom (91 percent) and Germany (87 percent) compare favourably to the Digital Winners worldwide, where 87 percent of employees are satisfied or very satisfied at work, France (76 percent), Spain (64 percent) and Russia (32 percent) trail. Further, while the United Kingdom (80 percent) and Germany (77 percent) again beat the Digital Winners worldwide, where 75 percent of employees would choose not leave if offered another job, France (72 percent), Spain (56 percent) and Russia (32 percent) stand to gain from better digital leadership.

Leverage digital technologies for improved decision making: Globally, 78 percent of Digital Winners make decisions that are data-driven, compared to only 55 percent of all companies. While some European countries outpaced their peers in this category, including Germany (72 percent) and France (55 percent), most European companies agree on the need for management to improve decision-making skills.