1 million SMEs still lack basic digital skills » SMEInsider

1 million SMEs still lack basic digital skills

Despite overall improvement for digital adoption among small businesses, over a million (23 per cent) still lack basic digital skills, a report has shown.

The 2015 Lloyds Bank UK Business Digital Index, which tracks digital adoption among small to medium sized businesses (SMEs) and charities, found that more small to medium-sized UK businesses (SMEs) are seeing the benefits of being digitally enabled, but there are still around 1.2 million that lack basic digital skills.

Such businesses are missing out on potential revenue and customer interaction by lacking a website, not using e-commerce, not maintaining a social media presence, or not using online banking.

In the first year of comparison the Index shows that there has been slow but positive progress in digital adoption among all organisations in the past year with an overall rise in the UK Index score by two points to 102.

The number of SMEs with basic digital skills has improved since 2014, increasing from 75 per cent to 77 per cent – an increase of over 100,000 in a UK population of 5.2m SMEs.

However, the report also highlights that some SMEs still do not understand the benefits of digital technology and that a ‘digital blind-spot’ remains, potentially jeopardising their success. One-quarter (25 per cent) of all organisations surveyed believe digital is ‘irrelevant’ to them.

While SMEs are showing some momentum, charities are struggling to keep up. The number of charities with basic digital skills has dropped from 45 to 42 per cent from a year ago – a decrease of around 6,000 charities, showing a continued lack of digital adoption.

The overall limited progress in developing digital skills, reflects the fact that there is no increase in the amount of investment organisations are making to develop these skills, with three quarters (75 per cent) investing no money at all, the report said.

Those charities at the lowest end of the digital skills spectrum also reported an increase in doubts as to how websites (78 per cent) or social media (83 per cent) could help increase their funding.

“We cannot emphasis enough the benefits that digital adoption can offer – such as saving time, increasing revenue or funding or reaching wider audiences,” said Miguel-Ángel Rodríguez-Sola, group director for digital at Lloyds Banking Group. “Digital is the key to unlock these benefits.”

“Even if an organisation does not believe they need to be online, many of their customers already are,” she added. “There needs to be further awareness to give charities and businesses the confidence to do more online.”