Digital skills gap in small firms holding back productivity

Productivity growth in the UK will continue to stall without government and industry action to tackle a digital skills deficit in small businesses, according to new research from the Federation of Small Businesses (FSB).

The research finds that more than a quarter (26%) of business owners in England lack confidence in their basic digital skills and more than a fifth (22%) believe a lack of basic digital skills among their staff is holding them back from increasing their digital and online presence.

FSB warns that small firms will be left behind unless the National Retraining Scheme, announced in the Budget to boost digital capability, is designed with them in mind.

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Despite clear evidence that better digital capability spurs growth, a quarter (25%) of small firms do not consider digital skills to be important to the growth of their business. That is why FSB believes demonstrating the benefits of digital to these firms will be critical.

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”.