Scottish small businesses lead the way on digital skills - BoS

The survey of 2,000 small businesses and charities across the UK, including just over 109 in Scotland, is developed in association with digital skills experts Doteveryone and Accenture.

It found fewer than a third of Scottish small businesses lack these basic skills, compared to the UK average of 38 per cent. Only London rivals Scotland in terms of this important measure for business success.

Using the new Doteveryone definition of Basic Digital Skills, which sets out five key skills needed to get the most out of being online (managing information, communicating, transacting, creating and problem solving), this year’s report shows that 70 per cent of small businesses in Scotland have all five skills, one of the highest scores in the UK.

The lack of key digital skills is a primary barrier to doing more business online, with 15 per cent of businesses across the UK stating this is the main barrier, more than doubling since 2015.

However, cyber security is rising in prominence as a reason for small businesses not doing more online and 57 per cent of Scottish firms state they still need to invest in cyber security, lower than the UK average of 69 per cent.

Positive findings show the index score for digital maturity in Scotland jumped 11 points to 57 since 2015 – above the UK average of 54. This is a step forward as the most digital small businesses are twice as likely to report an increase in turnover as the least digital, and 65 per cent of small businesses across the UK are using digital to reduce their costs.

Average percentage of small businesses without Basic Digital Skills by region

Scotland

30%

Northern Ireland

50%

North East

39%

North West

33%

Yorkshire & Humberside

38%

East Midlands

35%

West Midlands

48%

East of England

41%

Wales

45%

South East

41%

South West

37%

London

30%

UK

38%

Another possible area for growth is how businesses employ digital when trading overseas - such as using e-mail to overcome time zone differences, or international online payments. Currently under a quarter of Scottish small businesses (23 per cent) are using digital to support their overseas trading and 37 per cent have no website. This is below the UK average of 49 per cent.

The rise of self-service digital was another clear theme in the 2016 Index, with businesses preferring to turn to friends, relatives or colleagues first, followed by online searches for help or information. Just over half (51 per cent) of small businesses in Scotland have created social media communities, showing there is still a large portion who are yet to embrace these digital channels as a way to interact with current or prospective customers. The increase in social media and free digital support may explain why 44 per cent of local small businesses are still not investing their budget in digital skills. Organisations may instead be looking to more informal low cost (or free) resources to improve their digital skills.

Philip Grant, chair of the bank’s Scottish Executive Committee, said: “It’s pleasing to see that the Business Digital Index shows digital maturity is increasing for small businesses in Scotland, however, there are still too many without basic digital skills. It’s clear that being online can open the doors to opportunities, as well as cost and time saving benefits. We must do more to encourage small businesses based in Scotland to invest in digital skills, allowing them to make the most out of being online and to reap the benefits.”