The Federation of Small Businesses (FSB) is calling on the government to adopt "much more ambitious targets" for rolling out high speed broadband for businesses across the UK.
With an estimated 45,000 firms still on dial up, and many more struggling with speeds lower than 2mbps, said the FSB, "it is clear that while the residential market may be seeing the benefits of high speed broadband, this is not often the case for the business community", the organisation said.
The government's current target of 24mbps for 95 percent of the population and 2mbps for the remaining five percent by 2017 "will not meet the future demands of UK businesses", added the FSB.
It says that even with these access speeds, some businesses will still struggle to send digital invoices, upload large files or communicate with clients. Upload speeds are usually far lower than download speeds when it comes to broadband packages.
The FSB's new report, "The 4th Utility: Delivering universal broadband connectivity for small businesses across the UK", demands that the government, in cooperation with industry, to commit to delivering minimum speeds of 10mbps for all business premises in the UK by 2018/19, regardless of location.
Alongside this, says the report, the government should set a medium to long-term objective of providing minimum speeds of 100mbps to all premises by 2030. Denmark, for instance, is committed to offering universal access of 100mbps to its citizens by 2020, while South Korea has a target of 1,000mbps (1Gbps) for 90 percent of its population by 2017.
The report also demands guaranteed minimum bandwidth levels, reliable connections and greater parity between upload and download speeds "at affordable prices".
The FSB says the government should prioritise the delivery of fibre-optic broadband to business communities such as retail parks, and ensure that firms located in enterprise zones, which are designed to spur local growth, are fully connected - many are still not.
John Allan, national chairman of the Federation of Small Businesses, said: "The fact that we have around 45,000 businesses still on dial up is unacceptable and many more throughout the country, even in London, are receiving poor service.
"While progress has been made in the residential market, businesses have not enjoyed the same benefits, which is holding back their growth. Leaving five percent of the population with a 2mbps connection in 2017 is not good enough."
He said: "We want the government to oversee the creation of world-beating digital infrastructure. This means not only raising download speeds but also upload speeds that are so important and where provision is especially inadequate. Otherwise firms' growth ambitions will be blunted, while government efforts to get every firm to go 'digital by default' when filing taxes online will be impossible to achieve."
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