The UK economy could get a £100bn boost to productivity if businesses were more willing to embrace everyday technology such as cloud computing and online procurement.
And the uptake of digital could also reduce income inequality by five per cent, according to fresh research from the Confederation Of British Industry (CBI), which urged "ostrich" firms hiding from change to become "magpies", picking the best technologies already available.
The group is urging the government to do more to help businesses focus on innovation via its industrial strategy, including funding local business support.
“While the eyes of the business world can often be on ‘the next big thing’ in cutting-edge technology, too many firms are missing out on what’s right under their nose," said CBI director-general Carolyn Fairbairn, who described it as "one of the missing links in the UK productivity puzzle".
“The Prime Minister rightly laid down the gauntlet at the CBI’s conference last Monday to get firms investing more, but the environment must be right," she said.
“The diffusion of technology and best practices has been a serial blind spot for the government in its attempts to solve the UK’s deep-seated productivity pains. And while there is no shortage of business support programmes from the government, the problem for companies can be seeing the wood for the trees."
The benefits of technology were found to be spread unequally, with high-flying firms employing just five per cent of the workforce, while more than two-thirds are employed by firms at the lower end of the productivity scale, a greater proportion than in France and Germany.
Uptake of cloud computing was found to be lower than Europe's leaders while the largest gap in the quality of management at firms at the top and bottom was found in the UK.
“The new industrial strategy is the perfect opportunity to address this blind spot in public policy. It must allocate funds to support businesses to adopt these readily available practices and technologies," said Fairbairn.
Juergen Maier, the UK chief executive of Siemens said: "This report correctly points out that by prioritising tech diffusion we can boost productivity and support better wage growth."
A similar independent report he authored for the government found encouraging industry to adapt to digital could create nearly 200,000 jobs over the next decade.Let's