Digital skills gap: UK SMEs fall behind

The Federation of Small Businesses has warned that UK productivity growth will continue to stall unless action is taken to tackle the digital skills deficit in small businesses.

FSB research has found that over a quarter (26%) of business owners in England lack confidence in their basic digital skills and more than a fifth (22%) believe a lack of basic digital skills among their staff is holding them back from increasing their digital and online presence.

The business group says small firms will be left behind unless the National Retraining Scheme, announced in the Budget to boost digital capability, is designed with them in mind. However, 25% of small firms do not consider digital skills to be important to the growth of their business. The FSB says that demonstrating the benefits of digital to these firms will be critical.

Mike Cherry, FSB national chairman, said: "Firms risk being left behind unless they have the skills to take advantage of technology to remain competitive and responsive to their customers. We need to highlight the benefits of going digital and then make sure that small businesses and their staff can access basic digital skills training that meet their needs. If we can harness the digital potential of small firms, we stand a real chance of creating more world-beating businesses and boosting growth."

The digital skills gap is part of a wider skills challenge hitting small firms. The research finds that 30% of small businesses in England have struggled to find workers to fill roles because of acute skills shortages in the past year.

"Productivity is being hampered by nagging skills shortages which are making recruitment a nightmare for small firms," said Mike Cherry. "As the UK moves towards Brexit, a technical skills black hole threatens the economy. Small firms tell us that technical skills are crucial to the future growth of their businesses. The clock is ticking to tackle the ever-widening skills gap."

The findings of the research also show that 49% of SMEs don't have a formal training plan or budget. Small firms say the main barriers to training are the fact that their employees are too busy (25%), training is too expensive (21%) or the type of training needed is not available locally (16%).

Cherry added: "Small firms clearly recognise the value of providing training for themselves and their staff, but it can be a struggle to find the time and money, and in some cases even to find the right training locally. All Local Enterprise Partnerships (LEPs) should ensure that there is relevant, accessible training available to meet the needs of small businesses and the self-employed."

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