A quarter of small business owners lack basic digital skills

98% of UK small firms use the internet for business purposes but many aren't capitalising on the opportunities open to them - only 64% have a website

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A quarter of the UK’s small and medium business owners say they do not possess basic digital skills despite a strong correlation between digital skills and high turnover, research from the Department for Business, Innovation and Skills (DBIS) has found.

The government research paper, entitled Digital Capabilities in SMEs, interviewed 803 small companies and reported that almost all small firms (98%) use the internet for business purposes – predominantly to email customers and for online banking.

Yet the use of e-commerce is much less apparent with only 20% of small business turnover derived from e-commerce sales in 2013.

When it comes to web presence, 64% of small businesses have their own website or are listed on online directories. Of those businesses with no websites, 77% said they believed a website was not necessary, 18% felt that a website was too expensive, 17% said they had no time to set a website up, and 8% said they do not know how to create a website.

Websites were found to be least common in the primary sector (those businesses that make direct use of natural resources) at 54%, followed by small businesses in transport, accommodation and food service sectors at 45%.

The report claimed that there is an “attitudinal barrier amongst a minority of small and medium towards developing an online presence, a lack of awareness about the benefits and opportunities available, and a lack of understanding about online security threats.”

This “barrier” also appears to be evident in attitudes towards social media. Only 36% of small firms have a social media platform – Facebook being the most popular – but those business owners that use social media say it has been beneficial in promoting their goods and services (91%) and has helped with direct sales (29%).

To help improve the digital skills of small and medium businesses in the UK, the report suggested that embedding digital learning throughout the education system is a long-term solution, “but there is also a clear need to enhance digital capabilities in the shorter term.”

It advised that digital courses and awareness-raising initiatives should be provided to businesses through existing local, private and third sector networks.

Read the paper in full here.

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