Digital skills investment could boost GDP by €9.5bn, report says

A "meaningful" national investment in digital skills could boost Ireland's gross domestic product (GDP) by €9.5 billion in the next three years, a new report from Google has found.

Despite a major push towards digital transformation in the past couple of years, the majority of Irish SMEs said they were less than halfway on their digital journey, while only 55 per cent said they have their own website - significantly below the EU average.

But 57 per cent said meeting objectives in enhancing their digital capabilities would provide a boost to the business, helping them to grow faster and become more profitable. Increasing digital skills could have a significant benefit for employees too, with 28 per cent of business leaders saying improvement in this area could allow them to increase wages and salaries.

The survey of 1,000 leaders of small and medium sized businesses throughout Ireland was carried out by Amarach and looked at the digital capability needs, ambitions, and plans of Irish businesses.

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The research also revealed a lack of knowledge on how best to proceed, with half of businesses saying they didn’t have the basic knowledge to identify the digital skills they needed to prioritise and invest in.

Challenges

Companies also reported challenges with getting the appropriately skilled staff, with just over a quarter of SMEs saying their staff had the skills needed in terms of basic digital capabilities, and 41 per cent of SMEs lacking an employee tasked with developing digital skills.

Only 11 per cent said they felt their staff had the skills needed to successfully adopt and use new technology, while only 18 per cent of SMEs use customer insight tools and a little over half have or use social media and video platforms.

"The timing of this report could not be more important, the decisions that business leaders and policy stakeholders make about digital capabilities in the coming months and years will have profound implications for the long-term productivity and profitability of the SME sector, and for sustainable economic growth over the rest of the decade," said Alice Mansergh, director for small business at Google. "For its part, Google will use these findings to help shape the courses we provide via the Grow with Google initiative helping to train people in key digital skills that will empower them to embrace new business and commercial opportunities."

Covid investment

Covid has also helped to drive investment in digital skills, with 64 per cent of SMEs in Ireland citing the pandemic as as an incentive to invest more, and more then three quarters saying digital tools are more helpful to their business than they were before Covid-19 hit.

Digital adoption was higher in Dublin, the report found, where 45 per cent of firms said they were more than halfway along their digital journey, compared with 32 per cent of regional firms based in the midlands.

There were some differences observed in the gender divide too, with female decision makers in SMEs more likely to use social media platforms, at 55 per cent versus 51 per cent of men, and women more likely to view digital content creation as a top priority for digital skills development.

But only 58 per cent of female leaders and decision makers said their organisation is over halfway in its digital journey, compared to 65 per cent of male leaders.

"Small and medium enterprises remain the backbone of the Irish economy; accounting for 99 per cent of active enterprises and 70 per cent of employment. Enterprise Ireland and the Local Enterprise Offices are committed to supporting these businesses with their digitalisation journeys, investing in the capabilities that will help lead them to international success," said Enterprise Ireland CEO Leo Clancy. "For successful businesses, digitalisation isn't an option, it is a crucial advantage that allows them to compete and win."