Scottish small businesses lead the way on digital skills

09 January 2017

  • 30% of small businesses in Scotland have no basic digital skills
  • 37% have no website
  • 51% have created social media communities

Scotland is one of the leading parts of the UK in terms of small business skills, despite a rising challenge amongst some small businesses around cyber security, according to findings from the third annual Bank of Scotland Business Digital Index –a survey of 2,000 small businesses and charities across the UK, including just over 109 in Scotland, which is developed in association with digital skills experts Doteveryone and Accenture.  Fewer than a third of Scottish small businesses lack these basic skills, compared to the UK average of 38%. 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% 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% 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% of Scottish firms state they still need to invest in cyber security, lower than the UK average of 69%.  

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% 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%

Websites and overseas trading

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%) are using digital to support their overseas trading and 37% have no website. This is below the UK average of 49%. 

Social media and shifting advice preferences

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%) 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% 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.”

Case study

Glasgow based deals and events Itison certainly credits digital as a key part of their growth story, enabling the deals and events company to gain more than a million members. The company was founded by managing director Oli Norman in 2010, and today it operates across Scotland and the north of England, with plans to expand further south. Its members receive a curated daily guide featuring discounts and invitations for luxury hotels, restaurants, spas, theatres and major events in their area, either via the website or using the Itison smartphone app. 

Oli said: “There’s no doubt that this business could not have existed without digital technology, just because of the volume of data that we are dealing with. We deal with 3,500 businesses, from multinationals to local independents, and our members make more than 5,000 purchases every day. User experience is king - we are very focused on delivering an amazing experience with a focused call to action.” 

Employing over 60 staff, including a 10-strong development team, Itison also hosts its own unusual events including drive-in movies screened in unusual locations, like Top Gun overlooking an airport runway or Jaws by the seaside.  These regularly sell out with crowds of up to 20,000 people. 

Oli said: “When we first started we were in one of the most competitive consumer environments on the internet. There were global giants with billions of pounds in backing trying to muscle in, but it was the quality of our technology that saw us succeed. We used innovation to work smarter. Our data analytics tools mean we can match good people with good businesses, and we can share our insight into our members’ lifestyles with the companies we work with. It just goes to prove that you don’t need huge amounts of cash when you have a great idea.”

ENDS