By Jane Dickinson, Digital Skills Lead at The Open University
Covid-19 forced a handbreak turn on most businesses operating in the UK. While some business leaders have worked through the dotcom bubble, recessions and sector-specific dramas such as the volcano eruption in Iceland that halted international air travel in 2010, not since WWII have we seen a single situation impact the global working world so powerfully.
In March 2020, businesses of all sizes were faced with the “work from home if you can” edict that made remote working and isolated living the norm. This completely changed the way businesses delivered products and services and required them to turn to digital technology to underpin operations and support employees and customers.
For some, the technology was already in place but for many it meant rapid adoption and upskilling. Research from Be the Business last summer found that three years’ worth of innovation took place in three months because of the pandemic.
Companies of all sizes, across all markets, had to radically overhaul business practices and one of the most significant consequences was the turbo-charged embrace of technology by SMEs.
As firms turned to ecommerce, adopted software to allow remote co-working on projects, and invested in email marketing and communication, new digital technology became essential.
But what is particularly interesting about this digital transformation is that now the investment has been made and the rewards are clear, the changes are likely to be permanent. Even as the country opens up, offices are once more staffed, and physical interactions overtake remote ones, it seems likely the benefits of the technology introduced will remain. The catalyst of the Covid crisis could result in a permanent change.
30 per cent think digital tools are too expensive, while 16 per cent object to the time needed to train staff on how to use them
In a report published by The Open University in collaboration with Be the Business – Skills for success: Supporting business leaders with digital adoption – a survey found that among SME business leaders who adopted new technology or accelerated its use due to Covid-19, c85 per dent plan to continue using it at the same level once restrictions are fully lifted.
The pandemic has made business leaders more likely to invest in digital skills development, both for themselves and their employees. And there is significant evidence that technology can increase firm-level productivity.
The CBI has estimated that by adopting key technologies, firms could add £100bn to UK gross value added (GVA). Similarly, introducing tools such as Enterprise Resource Planning (ERP) or Customer Relationship Management (CRM) have been shown to create a productivity premium of around 25%.
So, it’s not surprising that the majority of those SMEs that have realised the advantage of these technologies, and relied more heavily on them in the pandemic, don’t intend to reverse that progress.
But there are still issues – especially in closing the digital skills gap. For those companies yet to invest in the technology it’s about increasing awareness of the potential value and removing barriers to adoption, but even for those that have already bought into the advantages, they may need support in getting the full benefit of this digital surge.
Other findings from our report show just how much work is still to be done. One fifth of all business leaders don’t think adopting technology could have a positive impact on their business at all, rising to one quarter of businesses with 1-49 employees.
In terms of the barriers to adoption, 30 per cent think digital tools are too expensive, while 16 per cent object to the time needed to train staff on how to use them – suggesting that there are ongoing challenges in bringing all SMEs along the path to technology adoption and increased productivity.
Perhaps one of the biggest challenges is that there is a skills gap among SME leaders themselves. Only 23 per cent think they have all the necessary technical skills to adopt and implement technology and only 33 per cent believe they have all the leadership and management skills needed. There are similarly low levels of belief that their teams have the required skills.
And the final barrier in this process is that only half who felt their employees lacked skills in these areas have either a formal or loose plan to address the skills gap in the next 12 months.
It’s positive that the majority expressed interest in some form of learning and development, either via short courses and, to a lesser extent, apprenticeships like the ones we offer at the Open University, and other work-based learning or shadowing.
So, we have a job to help SMEs understand the breadth and depth of digital skills training available and that much of it meets their parameters, given that both time and money is in short supply.
For instance, Help to Grow: Digital, a new government programme announced in the March 2021 Budget, addresses the cost of adopting three key technologies (digital accounting, e-commerce and CRM systems) with proven links to productivity improvements by offering a voucher for up to £5,000 that can be used by businesses (5-249 employees) to offset the purchase costs by up to half.
In our ever-changing world, lifelong learning is vital to keep our businesses thriving. Technology supports and helps grow firms and ensuring teams and leaders can get the most out of that technology requires training and development.
There is no turning back on this journey and irrespective of business size, budget or sector, there is training available to help SMEs embrace this digital culture.
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