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How the Digital Skills Gap is Hampering Tech Adoption Among UK SMEs

Michael Behr

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digital skills gap
A new report has warned that many companies across the UK are lagging behind competitors in terms of technology adoption.

The digital skills gap in the UK is hampering small businesses from implementing new technology, a report was warned.

According to the Skills for Success: supporting business leaders with digital adoption report from the Open University and Be the Business, 77% of SME leaders said a lack of necessary skills is stopping them from using new tech.

The research surveyed 1,500 SME business leaders from across the UK, asking them to share their experiences of businesses which have needed to make drastic changes to adapt to the coronavirus pandemic.

The report found that only 50% of responding business leaders in Scotland say they plan to address gaps in skills over the next 12 months. However, it added that while business leaders value training and technology, time and money barriers stand in the way of upskilling.

As many as 33% of Scottish business leaders surveyed said time and cost can make digital adoption too expensive and too time consuming, slightly higher than the UK average of 30%.

In addition, the report added that not all business leaders see the value of technology. Only a minority said it had a positive impact on increasing efficiency (39%), profit margin (24%) and revenue (37%, versus a UK average of 31%).

However, rapid technology adoption among SMEs over the past 15 months demonstrates that there is an opportunity to maintain the uptake of technology and digital skills.

Covid-19 accelerated the adoption of collaboration and e-commerce software, for example, in more than half (54%) of UK SMEs. Of the business leaders who adopted new technology or accelerated its use due to Covid-19, at least 85% plan to continue using it at the same level once restrictions are fully lifted.

On the other hand, the report found that even without dedicated resources, many small and medium-sized businesses have shown themselves to be flexible and resilient around digital skills and training, with 65% of Scottish business leaders expressing an interest in some form of learning and development in the next 12 months.

Scottish business leaders value basic digital skills (38%) or technical understanding of technologies (23%) ahead of the leadership skills required to successfully implement technology (6%, vs 12% UK average).

However, fewer Scottish business leaders say they are confident in adopting technology (59% compared to 67% across UK), while just over half (54%) think they make good purchasing decisions about technology.

One-fifth (20%) of all business leaders do not think adopting technology could have a positive impact on their business at all.


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Director for the Open University in Scotland Susan Stewart said: “Small and medium sized businesses are vitally important to Scotland’s urban and rural economies and this report shines a light on some of the challenges they face in order to remain competitive in the global marketplace.

“With our flexible approach to lifelong learning, Open University Scotland is well placed to help Scotland’s SMEs address many of the digital skills gaps identified in this report.”

Stewart added: “We recognise the validity of the two key barriers – time and cost investment – and have been working in close partnership with businesses, agencies and government since the start of the pandemic to broaden access, often through enhanced funding options for employers and individuals.”

To better combat the digital skills gap and encourage the adoption of new technology, the Skills for Success report makes several recommendations.

These include identifying the right digital tools to tackle a company’s biggest challenge as well as securing time and budget to enable an attitude of continuous learning.

In addition, the report said that SMEs need to embrace a digital culture and recognising the benefits that a varied skillset bring to an organisation.

Michael Behr

Senior Staff Writer

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