BRITISH business is due to fully embrace the Internet revolution over the next three years, according to a survey by the Confederation of British Industry and KPMG Consulting.

The report, The Quiet Revolution, published with the support of the London Business School, states that 76 per cent of companies generate less than five per cent of their turnover from e-business at the moment.

This trend should soon change dramatically - with 58 per cent expecting to derive at least ten per cent of their revenue directly from e-business within the next two to three years.

The report also shows that 93 per cent of UK companies have already addressed e-business in their corporate strategy in some way.

Forty-one per cent of firms are finding that e-business is already having a real impact on all aspects of the organisation, with only 17 per cent reporting a limited impact. Ninety nine per cent expect e-business to have some impact in the next two to three years.

The Quiet Revolution report dispels the notion that the Internet revolution has ground to a halt.

The rise and fall of so-called dot.com companies may have dominated the first wave, but the second is now being led by traditional organisations across the UK of all sizes, in every sector.

The survey identifies three distinct groups of companies:

l The e-pioneers: 21 per cent of companies are forging ahead in the most complex, business transforming aspects of e-business.

l The e-followers: 43 per cent of companies have fully grasped the e-business basics and are creating websites and exploiting the Internet for marketing and knowledge sharing.

l The e-laggards: 36 per cent of businesses have yet to evolve their e-business activities beyond e-mail and related IT.

Although there are differences in the rate of e-business take-up, the survey does not support a sectoral or geographical digital divide.

More than 50 per cent of companies of all sizes, and 45 per cent of companies in all regions, are involved in at least the basics of e-business.

CBI director general Digby Jones, said: "Today, in the world of business the three Es have been added to the three Rs.

"Continued business success will undoubtedly be the prize for the e-pioneers.

"But the e-laggards and the e-followers must not be left behind. Business and Government must work together to harness the pioneering spirit of all UK businesses."

Alan Buckle, chief executive of KPMG Consulting, said: "The first wave of e-business is emphatically over, but the rags-to-riches-to-rags stories of the dotcom entrepreneurs that have dominated the headlines have disguised what is really going on.

"A quiet revolution has begun inside British businesses. Imaginative companies in all areas of the economy have been embracing Internet technology."