Digital Skills for SMEs: Challenges and Opportunities

Digital skills are essential for work and life, and especially to cope with COVID-19 challenges. As SMEs are the backbone of our society, we need to enable their increased adoption of digital skills via supporting measures. This can be done via ecosystem strengthening, strategic outlook development, structured skills development and trainings tailored to their needs.

Digitalisation is a critical component of the European Union’s response to the economic crisis brought about by COVID-19. The pandemic has illustrated how digital skills sustain both economies and societies. The need for Information and Communication Technologies (ICT) skills in coping with COVID-19 challenges within companies is also highlighted in a report by the Learning and Knowledge Development Facility (LKDF) of the United Nations Industrial Development Organization (UNIDO) and the European Training Foundation (ETF). As shown in Figure 1 of the report, 76.2% of 105 companies surveyed felt that their need for improvement is mainly in ICT skills, followed by design thinking and creative approaches. Thus, digital or ICT skills are increasingly important for both work and life. In this article, we will focus on the acquisition of digital skills for SMEs.

Figure 1. Changing needs for skills development because of COVID-19

Teaching and Learning Digital Skills for SMEs

Digital skills range from basic usage skills that enable people to participate in the digital society and consume digital goods and services, to advanced skills that empower the workforce to develop new digital goods and services. These skills can be acquired in different settings such as at work or privately, and at different life stages, for example, in schools for younger learners, or as an adult or senior citizen.

In recent years, enterprises are providing more and more training to their personnel to develop or upgrade their ICT skills. Findings from a global survey of enterprises, published by the International Labour Organization in 2021 revealed the following: In 2018, 24% of enterprises provided ICT training for their personnel. When looking at company size, 70% of large enterprises actively provided the training, while only 23% of SMEs did so. Thus, among SMEs, there are fewer ICT trainings provided. As SMEs are the backbone of the economy and digital skills are increasingly connected to how business is conducted, it is important to facilitate both the teaching and learning of digital skills among SMEs.

In developing countries, digital skills can be seen as even more crucial. As outlined in an article by Ms. Cristina Duarte, Under-Secretary-General and Special Adviser on Africa to the United Nations Secretary-General, there is a chance to leapfrog Africa’s development through digitalisation. Harnessing innovation and raising the level of ICT competencies among citizens in countries like Nigeria has enabled emerging economies to develop quickly capacities for the digital economy of the future and achieve international recognition as a tech hub.

Challenges to digital skills development in SMEs

Digital skills can be taught in different ways: online, offline or blended. According to UNESCO, approximately half of the world’s population (some 3.6 billion people) still lacks an internet connection. However, the digital divide is not the only obstacle that SMEs face in the acquisition of digital skills.

Based on the 2019 European Commission report Digital Skills New Professions, New Educational Methods, New Jobs, from an operational standpoint, the greatest barrier to providing digital skills training to SME employees is a lack of time. Further obstacles relate to the availability of training programmes, with cost, inflexible timetables and distance indicated as the main obstacles to participation, as well as an inability to fully understand the content of the training from the limited information provided.  More barriers are outlined in Figure 2 below, which is found in the 2019 Skills for SMEs report co-produced by DIGITAL SME, Capgemini Invent, and Technopolis.

Figure 2: Synthesis of Barriers for Skills Development in SMEs

The Report on European Educational and Training Landscape and Training Needs for Citizens and SMEs for the Digital SkillUp project suggest that efforts should be made to explain emerging technologies in a simple and accessible way, providing practical and real-life use case examples. The experts contributing to the report also stressed the importance of obtaining certification and having detailed information on course quality. These two aspects would enable individuals to access learning that is better suited to their needs and select their own learning paths.

Moving forward with a holistic approach to teaching and training in digital skills

In the Skills for SMEs report, DIGITAL SME, Technopolis and Capgemini Invent presented four streams of actions for stakeholders to enable successful digital transformation built on skills:

I. Strengthening ecosystems: Being connected and embedded in regional or sectoral support structures—‘ecosystems’—is essential for SMEs’ skills development. In every corner of Europe, SMEs need to be embedded in networks and have access to nearby support (knowledge, guidance and learning).

II. Strategic outlook development: Aimed at increasing the understanding of the strategic business opportunity of the adoption of new technologies. Starting with raising awareness and creating a strategic outlook. Also requiring strengthening of direct business environment and facilitation of collective action.

III. Structured skills development: From vision to plan: support SMEs with the implementation of structured skills development, enhance capabilities for assessment, monitoring and decision-making, and increase transparency as well as access to funding.

IV. Tailoring training to SMEs’ needs: Increase education and training offers: build sustainable training offers that match SMEs’ needs (content, form, set-up). Develop training capacity. Collect intelligence to increase understanding of needs. Reduce direct costs.

SMEs often do not have the necessary time, financial and human resources to foster their employees’ digital skills, especially compared to big companies. Therefore, they need support from the overall business ecosystem. The support can be in the form of having free-access training for SMEs being developed, providing funding for digitalisation the development of digital skills. At the EU level, projects such as the Digital Skills and Jobs Platform help to provide a single place for people interested to access information and resources.

While the above-mentioned four streams of action were written for the EU audience, they can also be useful for countries outside of the EU. Stronger ecosystems will help SMEs to receive more support and trainings can be improved so that they can better match their needs.

A need for coordinated efforts

Digital technologies are a major driver for growth, productivity and innovative capacity. Economic performance increasingly depends on the digital skills and competencies of citizens. Increased cooperation between different stakeholders like associations, innovation hubs, local and regional governments, and EU institutions strengthens the ecosystem and improves access to support.

There is more than one path towards the acquisition of digital skills. From company to country, to continent, each stakeholder needs to take into account their unique situation when determining the actions to be taken. One thing we can be sure of is that in a globalised and fast-changing world, digital technologies are here to stay.

DIGITAL SME’s Working Group Skills connects businesses, educational players, and other stakeholders to promote skills-related policy on the European level and inspire the exchange of success stories and best practices. Apply to join the working group here!

This article was developed in the context of #skills4prosperity, a joint campaign by UNIDO‘s Learning and Knowledge Development Facility and the European DIGITAL SME Alliance.