Overview
The question of how businesses improve their productivity is of paramount importance in the UK. New technologies can help to improve a firm’s productivity, however the slow rate of technology adoption amongst many UK businesses could impact their ability to compete on an international scale.
In this project, we focused on digital technologies and investigated whether knowledge gaps hinder firms’ adoption of technologies and the extent to which information influenced firms’ adoption and impacted their performance.
Methods
The project applied a randomised controlled trial methodology, where randomly selected firms were given information on the extent of poor performance of their website. These firms were also given information about the performance of others in their industry, including industry best practice. They were also given basic information about how to improve performance.
Two main trials were completed. The first trial included 800 firms from the distilling industry in the UK, with 400 businesses selected to receive information and another 400 businesses used as a control. The baseline information for this trial started in November 2020, with the information sent in February 2021. In a second larger trial a random sample of 8,000 retail businesses was used, with again half of the sample given the information on performance and half not. This baseline information collection for this trial started in June 2022 and the information sent in September 2022.
A third trial involving 18,000 firms from the architecture and engineering sector is underway.
Findings and Outputs
Our findings suggest disparities in baseline performance among firms. This suggests that there is a need for improvement and therefore that information might play a role in encouraging firms to act to improve.
The experimental results provided only weak evidence that peer benchmarking leads to enhanced website performance. Broadly, our intervention seemed to reduce information costs for elusive measures but did little to motivate the necessary efforts to bridge performance gaps. Significant treatment effects were only discernible for specific performance metrics with high costs of information acquisition and relatively low costs of improvement efforts, and these effects predominantly surfaced only during the Covid-19 lockdown period when our intervention was perceived as “working with the grain”. All in all, our research highlights the intricate interplay of information acquisition costs, the effort to change costs, behavioural biases, and digital efficiency.
Research Team
This project was undertaken by a team of researchers in Nottingham University Business School and School of Economics. The project involves Prof. Richard Kneller, Prof. Cher Li and Dr Anwar Adem.
Get in touch:
To find out more or to get involved please use our email: [email protected].