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UK businesses to spend £13 billion on web technology by 2009

A joint CBI/Google survey reveals that although the internet has changed the way we work businesses still have a long way to go to ensure future web-based success

By Maggie Holland, 24 Nov 2006 at 16:38

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The web may have changed the way that UK companies do business, but its transformational effect is not complete and companies still have a lot to learn in terms of engaging with customers online.

As a result, UK industry spend on net-based technology will increase from £10 billion today to £13 billion by 2009, according to research published today by search giant Google and the CBI.

Some 70 per cent of businesses say they still haven't got the subject of reaching customers online completely sussed.

And less than a quarter (23 per cent) feel that they are better at harnessing the web than their competitors.

However, change is afoot.

Half of businesses know that evolving their business model in line with changing consumer behaviour is crucial if they are to succeed in the future.

Three quarters plan to make their online efforts a more central part of their business, 61 per cent say they will tweak their web presence so that it is more customer focused and 58 per cent have vowed to ramp up their investment in online marketing.

"Six years after the dot.com bubble burst, the internet is driving really substantial change among businesses," said Richard Lambert, Director-General of the CBI.

"Firms are learning more about harnessing the internet to benefit their staff, their customers and their future prospects. Serious investment is going into new Internet technologies and this is set to increase.

"Businesses have already come a long way on the internet journey. If there were such a thing as a digital base camp they would have reached it. But their real ascent is still ahead of them, and much of the terrain is unknown."

Nikesh Arora, vice president of European operations at Google added: "The internet offers business a huge opportunity. Technology and social change give business the chance to reach customers on a previously unimaginable global scale. Consumers are active online, want to find out more information about products and to buy online.

"This survey suggests that businesses recognise this and are preparing to invest to make the most of it. Even if they don't see immediately how to reach their customers online, they know they have to invest to do so. I think this is a positive sign that business here is increasingly engaged online and is prepared to put the internet at the centre of their business strategy."