Elixirr: Education to boost digital capabilities UK SMEs

11 February 2015 Consultancy.uk

The training of future digital experts could boost the digital capabilities of UK’s SMEs, which subsequently could boost the country’s GDP, research by Elixirr shows. According to the firm, SMEs are experiencing four barriers to adopting digital, of which education is one. In addition to focussing on digital training in the educational lifecycle, businesses should invest in training on the work floor.

Management consulting firm Elixirr recently released two research reports focussed on small and medium-sized enterprises (SMEs) and digital skills in the UK. In its research the firm investigates the barriers SMEs face to operate in the digital economy and how businesses can help equip the UK workforce with digital skills.

SMEs and digital in the UK economy
Digital is often associated with business growth, innovation and consumerism. According to the consulting firm this is for a very good reason; in 2011 it was estimated that if the UK had fully embraced the potential of digital and had exploited all of the digital capabilities, the country would have experienced a £63 billion uplift in total GDP in that year. As SMEs account for 99.9% of all private sector business in the UK and make up almost half of private sector GDP in the country, SME engagement with digital technologies is especially significant if the UK is to embrace the potential of digital. Elixirr’s research shows, however, that many SMEs fail to embrace digital. So, how come many SMEs are experiencing difficulties in becoming digital organisations?

Elixirr - Digital SMEs

Education as barrier to digital
One of the barriers* for SMEs to embrace digital is education and skills. Equipping the workforce with the skills needed to succeed in a digital economy starts at schools, needs to be reinforced throughout university and constantly refreshed in the workplace. According to Elixirr, the limitations in the current education lifecycle restrict this process from happening. Research shows that 36% of small businesses in the UK are experiencing a shortage of skills and around 745,000 additional workers will needed between 2013 and 2017 to close the gap in skills demand.

The ‘education’ barrier can be broken down into three areas: a skills shortage (there is a lack of the necessary skills), a skills gap (misalignment in current skills and the necessary skills) and underutilisation of skills (incorrect use of existing skills) and is caused by limits in Science Technology Engineering and Mathematics (STEM) education and training, the gender gap in STEM related careers, and the fairly unresponsive educational system to changes in industry patterns.

Education to boost digital skills

Education as enabler of digital
To overcome the educational barriers and to use education as an enabler of digitalisation, education should become more STEM focused, the researchers say. STEM subjects should become core subjects, STEM curriculum and content should be offered online to support content refreshing, STEM teachers should be encouraged by increased rewards and training, and industry-led initiatives should be encouraged to reduce the gender divide in STEM careers and to facilitate the most current learning in the classroom. “STEM subjects need to take a more prominent role in the educational curriculum to ensure that training in digital is started early so that future generations can offer the labour market the much needed digital skills to succeed,” the researchers explain.

Digital network

In addition to this, the report lists four methods education and training by business as key to up-skilling the UK workforce. The first is ‘on-the job-training’, which involves traditional self-service training, social media training, and reverse mentoring. ‘Training outside the day job’ is the second method, which involves cross skilling between businesses and the education of digital skills outside the day-to-day role as well as the reducing of inequality in skills. The third method is ‘investment in industry, the community and the current workforce’ and the last the ‘business influence on training the next generation’, as businesses know which skills they need to succeed in the digital era.

According to Elixirr, the education barrier, as well as the other three barriers, needs to be addressed to prevent the UK from falling behind other countries and compromising future business sustainability.

* The four barriers are education and skills, culture, change, and investment.

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