Recent research from e-skills UK has shown that making the most of technology could boost the UK economy by £35bn over the next five to seven years, writes Karen Price, CEO of e-skills UK. In England alone this equates to between £1bn and £5bn per region, depending on the size and structure of the regional economy. But it will only be achieved if we take urgent action to improve our skills base and drive up the adoption of technology by smaller firms.
Technology can transform a small business. It has the power to improve efficiency, enable new products and services, streamline supply chains and enhance relationships with customers. It can help smaller firms to reach out into global markets as easily as local ones.
At e-skills UK, we quantified the potential impact on smaller firms of introducing new technology. Our research found that for a typical consultancy firm of 20 engineers, the introduction of unified remote access to communications, documents and data could boost productivity by 17% and turnove by 30%. In another example, the introduction of online sales, ordering and payment processes to a specialist manufacturing company could lift turnover by 40% and global sales by 33%.
Yet many smaller firms find it difficult to know where to start with IT. Our research found a number of significant barriers and obstacles.
Barriers to adoption include a lack of awareness and understanding of the potential benefits of technology among small business managers and leaders. Often, they are unsure or unconvinced about what is available and what it could do for them. This problem can be exacerbated by limited access to suitably qualified, local business advice.
A further obstacle is the lack of skills at all levels. IT professionals, business leaders and the people who use the technology in their everyday work all need the right skills to make the most of IT. It can be challenging for smaller firms to identify the skills that people need and to source appropriate training.
Lastly, with the escalating importance of the internet in business, national and regional variations in digital connectivity affect smaller firms. This could become a major disadvantage for the UK as our international competitors move to introduce ubiquitous high-speed broadband.
Overcoming these barriers is critical. We must ensure that business decision makers have the skills and knowledge to introduce new technology and support the company through IT-enabled change. Tools such as e-skills UK's Business IT Guide can help. Created by employers for employers, the guide helps companies to understand what technology is relevant to their organisation and supports them in taking any necessary action. Already available in five English regions, with more to follow, the online guide focuses on practical, user-friendly advice that companies can easily implement.
Making the most of technology is the single most important step the UK can take to improve productivity. For the UK's smaller firms it can also make the difference between success and mere survival. It is vital that we give them the support they need.
Karen Price is CEO of e-skills UK, the sector skills council for IT and telecoms
This was first published in March 2008