Productivity growth in the UK will continue to stall without government and industry action to tackle a digital skills deficit in small businesses, according to new research from the Federation of Small Businesses (FSB).

The research finds that over a quarter (26 per cent) of business owners in England lack confidence in their basic digital skills and more than a fifth (22 per cent) believe a lack of basic digital skills among their staff is holding them back from increasing their digital and online presence.

Related: Bridging the Brexit skills gap

FSB warns that small firms will be left behind unless the National Retraining Scheme, announced in the Budget to boost digital capability, is designed with them in mind.

Despite clear evidence that better digital capability spurs growth, a quarter (25 per cent) of small firms do not consider digital skills to be important to the growth of their business. That is why FSB believes demonstrating the benefits of digital to these firms will be critical.

Digital technology and productivity

FSB national chairman Mike Cherry says, ‘We know that embracing digital technology can help businesses in every sector to be more productive. Firms risk being left behind unless they have the skills to take advantage of technology to remain competitive and responsive to their customers.’

Cherry stresses the need to highlight the benefits of going digital and then make sure that small businesses and their staff can access basic digital skills training that meets their needs through initiatives like the National Retraining Scheme.

‘If we can harness the digital potential of small firms, we stand a real chance of creating more world-beating businesses and boosting growth,’ he adds.

A wider challenge

The digital skills gap is part of a wider skills challenge hitting small firms. The research finds a third (30 per cent) of small businesses in England, which have tried to recruit in the year since the Brexit vote, have struggled to find workers to fill roles because of acute skills shortages. Skilled trade jobs, including electricians, IT engineers and construction workers are most affected as the labour market remains tightly squeezed.

Even within the workplace, there is a persistent skills gap problem, with half (46 per cent) of small firms lacking full know-how among their staff.

Cherry says, ‘Productivity is being hampered by nagging skills shortages which are making recruitment a nightmare for small firms. As the UK moves towards Brexit, a technical skills black hole threatens the economy. Small firms tell us that technical skills are crucial to the future growth of their businesses. The clock is ticking to tackle the ever-widening skills gap.’