A report published this week investigating the impact of Covid-19 on the Irish SMEs sector and to benchmark its performance against European markets, indicates that significant barriers in the adoption of technology threatens SME recovery in Ireland post pandemic.
Examining how the sector has adapted to the pandemic, the report follows a study of 500 SMEs operating in rural and urban areas in Ireland and across a wide range of industries.
Importantly, it highlights the role digital transformation will have in driving the sectors’ recovery post-Covid, with policy recommendations to support that growth.
The report from Vodafone Ireland, working in collaboration with economist, Stephen Kinsella, found that nearly three in five (58%) businesses face a number of significant barriers in relation to the adoption of technology, despite a willingness to invest.
Though cost is the highest obstacle (37%), trust in suppliers (36%), integration with older systems (32%), and having the right in-house capabilities (28%), are also common issues for SMEs wanting to invest.
Some other key takeaways from the report indicate that larger, rural based businesses displayed a greater use of new digital channels to access new markets than smaller, urban based businesses.
Ireland has one of the lowest levels of SME digital adoption in the EU, sitting mid-table. According to the report, only 19% of smaller Irish firms are ‘highly digitalised’, while just 24% of larger firms are.
Just 30% of small firms in Ireland sell using the internet, versus 38% for larger firms – lower than European counterparts like Denmark, Malta, Finland and Hungary.
While one quarter of SMEs lack confidence in the digital skills of their employees and almost half plan to invest in digital skills training and development. This rises to 65% for larger SMEs.
COVID ACCELERANT
Economist, Stephen Kinsella, said: “It is clear that technology was and is a key enabler of business adaptation throughout the pandemic, with many SMEs recognising the need to make significant changes to their digital infrastructure.
“The trends around innovation, investment, and new market entry, enabled by digitalisation were apparent before Covid-19, but have been accelerated by the pandemic.
“In addition to challenges to the adoption of new technologies, SMEs see a significant need to upskill employees in the coming years, especially in relation to digital skills.
“One quarter of SMEs lack confidence in the digital skills of their employees and almost half plan to invest in digital skills training and development. This rises to 65% for larger SMEs.”
