New report says it’s “critical” small business owners think digital

Both the government and small business owners alike need to take adequate action to address the chronic state of the UK’s digital skills deficit.

According to a new report by Federation of Small Businesses (FSB), a worrying 26% of English entrepreneurs lack confidence in their “basic digital skills” – with 22% believing such a weakness is holding them back from growing their online presence.

A problem acknowledged by the government, it’s suggested that a failure to improve the widening skills gap among British firms will hinder any chance of UK productivity growth in the coming years.

With a number of preventative measures announced during last month’s budget, including the national retraining scheme, the FSB has warned that small businesses will continue to be left behind – unless such initiatives are designed and implemented with them in mind.

While there certainly is a massive onus on the government to ‘stop the rot’ and increase UK productivity so it can compete in a post-Brexit environment, this new research suggests business owners themselves are not without blame.

Indeed, despite clear evidence that better digital capability spurs growth, 25% of small firms do not consider digital skills to be important to the growth of their business – with the FSB believing it is “critical” the benefits of digital be demonstrated to these firms.

Not solely isolated to tech issues, the digital skills gap is part of a wider skills challenge hitting small businesses up and down the UK.

The FSB’s survey finds that 30% of respondents in England, which have tried to recruit in the year since the Brexit vote, have struggled to find workers to fill roles because of acute skills shortages – with skilled trade jobs, including electricians, IT engineers and construction workers the most affected.

Even within the workplace, there is a persistent skills gap problem, with 46% of small enterprises lacking full know-how among their staff.

Despite most small business owners providing some kind of skills training for themselves and their staff over the 12 month period, 49% do not have a formal training plan or budget.

In addition, three quarters of self-employed have no plan or budget to support training.

The FSB suggests that a strategic approach to training is “essential” to support small business growth aspirations, so small businesses must know where to turn for help on this.

Small firms say the main barriers to training are the fact that their staff are too busy (25%), training is too expensive (21%) or the type of training desired is not available locally (16%).

Mike Cherry, FSB national chairman, said:

“We know that embracing digital technology can help businesses in every sector to be more productive.

“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 meets their needs through initiatives like the National Retraining Scheme.

“If we can harness the digital potential of small firms, we stand a real chance of creating more world-beating businesses and boosting growth.

“Productivity is being hampered by nagging skills shortages which are making recruitment a nightmare for small firms. As the UK moves towards Brexit, a technical skills black hole threatens the economy.

“Small firms also 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 twin pressures of rapid technological change and Brexit make upskilling the current workforce more important than ever.

“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.

“What’s more, there’s a bigger problem with training among the self-employed who often find themselves so stretched that extra time away from the business can seem more like a burden than a benefit.

The government should encourage more people to train by offering tax breaks to self-employed who attend training to develop new skills, not just to refresh existing skills.”