IMPROVING the digital skills and connectivity of small businesses (SMEs) could add £92 million to the Belfast economy, a new study claims.
'The Digital Opportunity for Small Businesses' report from Oxford Economics, commissioned by Intuit QuickBooks, identifies a £15.3 billion digital opportunity for the UK as a whole.
And it said in Northern Ireland, where the overwhelming majority of all businesses have fewer than 250 employees and therefore fit into the SME bracket, could significantly benefit from having access to greater digital connectivity and leveraging existing technology and tools.
According to the Government’s Industrial Strategy Council, regional differences in UK productivity are at their highest level in more than a century, with digital one of the key contributing factors.
As a result, there is a growing awareness of the need to heal the digital divide. And with 58 per cent of businesses failing in the first five years, embracing digital could be a significant factor for growth and resilience.
The report says SMEs are currently not capitalising on the digital opportunity available.
For example, while businesses with more than 250 employees derive 25.4 per cent of their turnover from e-commerce sales, for SMEs this proportion falls to just 6.9 per cent.
Similarly, less than half (46.7 per cent) of SMEs have a website, compared to 95.6 per cent for larger firms. Only 5.2 per cent of small firms use enterprise planning software, while 8.6 per cent use customer relationship management tools, compared to 67.2 per cent and 62.9 per cent of larger firms.
Key factors behind SMEs not making the most of the digital opportunity include resource constraints – for many, high-cost investments with a long pay-off period are infeasible – and a lack of knowledge, skills and experience with digital technology among owners and employees. Only 6.7 per cent of SMEs offer training to develop ICT/IT skills, compared to 67.6 per cent of firms with 250-plus employees.
As entrepreneurs and top management in SMEs have a large influence across their firm’s operations, their experience and attitude towards digital technology can determine the extent of digital adoption in their organisation.
Chris Evans from Intuit QuickBooks said: “Entrepreneurship is everywhere and is driving prosperity in the UK, but it’s never been harder for small businesses to succeed, and we truly believe that for them to endure, they must have digital at their core.
“Implementing the right tools will allow small businesses in Belfast to seize the digital opportunity, elevating their business so that they continue to be the heartbeat of local communities and the lifeblood of their economy.”
