Are firms being held back by a lack of vital digital skills?
More than one million small businesses in the UK lack basic digital skills according to new research from Lloyds Bank.
The UK Business Digital Index suggested as many as 1.2 million firms lack the skills required to reach their true potential.
That is despite 100,000 firms improving their digital abilities in the past year, as 77% of SMEs now have sufficient skills compared to 75% 12 months ago.
A lack of investment into this key skills area could explain why progress is relatively slow, as three quarters of investment organisations have piled no money at all into skills development.
Understanding the benefits of digital
It was also reported that some firms were failing to gauge how websites or social media sites could help to boost their business.
Some 25% of firms said they believed digital was not relevant to them, despite the potential benefits such as saving time, boosting revenue or raising brand awareness.
Digital underpins these benefits and small firms could be placing themselves under unnecessary strain as a result of not implementing relevant technology.
Customers are increasingly online too, so a lack of digital awareness could be shutting off one market of potential buyers or service users.
Sales volumes often impact heavily upon the cashflows of small businesses and a lack of sales could impact on the bottom line without good management.
If these issues are left alone, the financial situation can worsen and business turnaround methods might be required – acting early is recommended to minimise any negative impacts resulting from financial issues.
Links between digital maturity and success
Lloyds linked digital maturity with success in the 2015 study, suggesting that correlation exists between the two factors.
Digitally mature SMEs were found to be more likely to increase their turnover in the past two years than the least digitally aware.
Concentrated activity in some regions to boost digital maturity had also proved successful, with companies reporting success at a local level.
London is the most digitally mature region of the UK, but the divide between north and south reduced significantly in the past 12 months.
By Phil Smith