Small businesses failing to reap full benefits of digital skills ⁰

Small businesses in the UK are failing to invest enough in digital skills even though there is clear link between digital orientation and commercial success, according to Lloyds Bank’s third annual Business Digital Index. The reports key finding is that firms with a string digital focus are twice as likely to see an increase in turnover than those that aren’t. The report also found that 65 percent of small business owners in the UK have already used digital tools to cut costs. On the down side, the study also found that 38 percent of small firms lack “basic digital skills”. The report claims that independent sole traders have the lowest levels of digital skills with around half having just basic levels of expertise. Despite this, over three quarters (78 percent) of these had no plans to invest to increase the levels of expertise in their business. The study gauged five factors that contribute to a firm’s digital skills score including managing information, communicating, transacting, creating and problem solving, with 62 percent of small businesses were found to have all five skills.

Commenting on the report’s findings, consumer digital director at Lloyds Nick Williams spoke of the “even stronger link between the digital maturity and organisational success of businesses. For some, concerns around online security are holding them back from adopting digital technology. We need to do more to reassure and support them to develop their cyber security skills,” he said.

Sole traders are the least likely to possess the five key skills (50 percent), while the number of sole traders investing nothing in the development of these skills has dropped by 10 percent to 78 percent in the last year.