Just one per cent of businesses in the UK are considered "digital winners", with the majority failing to embrace its transformational effects.
The UK lags behind the rest of the world and is considerably less digital than several of its European counterparts, according to a new study of more than 4,000 executives and employees in more than 21 companies around the world by SAP and Oxford Economics.
Around 16 per cent of businesses globally have the characteristics of so-called digital winners – that is, developing millennial executives, diversity and inclusion, as well as using digital technology to make better decisions among other attributes.
But in the UK, just a tiny minority are considered as such, compared to 41 per cent in Germany, 22 per cent in Spain and 15 per cent in France, while even in Russia, three per cent of firms are classed as digital winners.
These businesses are more likely to report strong revenue and profit, be better at hiring talent and keeping employees happy, as well as having better succession planning.
“The digitalisation of our world has brought about massive changes to the workforce and workplace, and businesses need to rapidly transform to keep up,” said SAP Success Factors president Mike Ettling.
“Our Leaders 2020 study revealed that many executives, both in Europe and other regions of the world, are not yet prepared to successfully lead in the digital age."
The only area where the UK came ahead of the average and other countries in Europe was for engaging and developing employees. However, when it comes to empowering a new generation, just five per cent of UK businesses had millennials at executive level.
“The disconnect with millennial executives is a critical warning signal to senior leaders, and one that puts other concerns raised by the study in focus. The future is knocking at your front door, and you ignore it at your own peril," said Oxford Economics deputy director of thought leadership Edward Cone.
Ettling added: "There’s a substantial opportunity for leaders across Europe and beyond to embrace the notion of becoming more digitally minded and digitally connected. As leaders, we must create an environment where people thrive by enabling them to make data-driven decisions quickly, reducing complexity and bureaucracy, and embracing diversity and inclusion.
"Digital is not just about adopting technology — it’s about creating a culture of innovation, where exponential outcomes are not just possible but demanded.”
It comes as a new ranking of entrepreneurial countries put the UK at number five. However, the research identified that the culture of entrepreneurship was failing to spread to wider society.