Just over a third (35%) of UK businesses surveyed have good digital health in 2026, 39% have average and 26% have poor health, according to a new European digital health study commissioned from Zoho, a leading global technology company. The UK was found to have the second highest proportion of businesses with good digital health in Europe.
The study rated businesses surveyed on their practices within Digital Transformation and how effectively businesses manage their digital foundations across aspects such as innovation, adoption of new technology, platform stability, IT management and data sovereignty.
Large UK businesses tend to perform better when it comes to digital health, with just over two fifths (41%) rated as having good digital health. Thirty-eight percent of medium UK businesses and just 26% of small UK businesses have good digital health.
In contrast, Germany performed better for the second time running, with 37% of businesses surveyed having good digital health. Spain sees 25% of businesses rated as having good digital health, while 24% of businesses in France and 14% of businesses in the Netherlands have good digital health. The Netherlands also had the most businesses surveyed having poor digital health (49%). Compared with the previous findings, the results continue to demonstrate some progress with most digital health indicators in all markets.
AI provides greater returns on investment in the UK
Around three-quarters of UK businesses (76%) are seeing a positive return on investment from Agentic-AI or next-generation AI. This is 6% higher than the European average and the highest recorded in European markets surveyed. Two areas show the strongest returns in UK businesses surveyed:
- Eighty percent report positive ROI from AI-driven data insights, compared with 72% of the Europe average and 77% from AI-powered forecasting, compared with 67% of the Europe average.
- Over half of UK businesses surveyed (58%) cite that AI already plays a critical or strong role, 10% higher than the Europe average.
UK has the most confidence in the market in Europe
Eighty-eight percent of UK digital decision makers surveyed are optimistic about business conditions this year and 44% are very optimistic. Fifty-nine percent of UK leaders say they are very optimistic looking ahead for three years and beyond. These are the highest results among European markets surveyed.
Data sovereignty – the top rising strategic business concern in the UK
Forty-three percent of UK businesses surveyed say that data sovereignty, in terms of data residency, is an essential factor when choosing a digital provider. This is demonstrating a shift from a compliance factor to a boardroom consideration. Ninety-one percent say it is essential or important overall that data is stored within their own country location.
“Robust digital foundations pay for themselves time and time again and this is extremely clear when it comes to AI. Results across Europe, including the UK demonstrate this with good digital health commanding better returns and progress with technology investments that contribute directly to the bottom line,” said Sachin Agrawal, Managing Director, Zoho UK.
“UK business leaders are more confident about the future than almost anyone in Europe and the study shows that this confidence has been earned. However, there is no time for complacency with ongoing global economic turbulence factors that cannot be controlled.
“Those who invest solidly and strategically in the basics and whose culture and actions ensure adoption will keep improving their competitive position. This means looking at centralised data, integrated systems, business efficiency and having a clear understanding of the impact of digital, not just data, sovereignty.”
