High costs and a lack of access to people with the relevant skills are significant barriers to businesses adopting digital technologies across Greater Manchester, according to a major new AMBS report.
Funded by the AMBS Strategic Investment Fund, the project - entitled Skills, Employment and Innovation in the Digital Economy – has two strands. Firstly, a quantitative analysis based on secondary data to assess the relationship between skills and the development of digital technologies in the UK. And secondly, a bespoke survey implemented by Greater Manchester Chamber of Commerce to address issues related to the Adoption of Digital Technologies and Skills (ADiTS) needs in Greater Manchester.
The ADiTS survey main results have now been published, and include the following key findings:
- 78% of firms in Greater Manchester have adopted at least one digital technology.
- Cloud computing is the most widespread technology with 70% of firms adopting this technology. Other technologies such as Artificial Intelligence (AI), big data, 3D printing, Internet of Things and robotics have only been adopted by a quarter of firms.
- Digital technologies are complementary and 43% of respondents adopted two or more.
- The main reasons for adopting digital technologies are related to the innovation of processes (67%) followed by the expansion of product or service range (51%), and process or method upgrade (49%). Task automation was selected by 45% of firms.
- Digital technologies increase a firm’s productivity, but also net increase employment, with 22% of the adopters increasing the number of employees and 41% increasing the number of skilled workers.
- Skills related to problem-solving in a digital environment, as well as numeracy, literacy, IT, reading and writing are key for technology adopters, but skills requirements are technology and sector specific.
The overall project is headed by Silvia Massini, Professor of Economics and Management of Innovation, and Dr Mabel Sanchez-Barrioluengo, Presidential Fellow. Other academics involved are research associates Huma Javaid and Xiaoxiao Yu.
The project had three key objectives. Firstly, to identify the key features of skills change over recent decades in the UK, both at local and national level, and gauge the impact of technology on the changing nature of occupations. Secondly, to assess new skill requirements needed in the digital economy. And thirdly, to analyse how skills and employment changes affect innovation performance.
Dr Sanchez-Barrioluengo said the ADiTS survey represented a pioneering effort to identify the patterns of technology diffusion and the pervasiveness of advanced digital technologies at the firm level.
“Despite the high expectations we have for advanced digital technologies due to their transformative and disruptive potential, its adoption continues to grow but at a slower pace than expected. Another key point is the need for a human-centric approach to digital transformation. Skills are the key to technology adoption, and in our study we have seen optimistic results in terms of the dilemma between humans vs technologies, with a positive effect on employment and especially skilled workers for technology adopters.
“However, at the same time the lack of talented workers with appropriate skills is a barrier as important as cost. Whilst cost will go down as more and more companies adopt these technologies, the demand for skilled workers will increase, and the gap between demand and supply of skilled workers will widen if there are not specific initiatives to narrow that gap.”
Lack of digital skills
Looking ahead, Dr Sanchez-Barrioluengo said one important aspect that remains unclear is what come first, technologies or skills.
“Do firms require and/or develop certain skills once they have adopted digital technologies, or do they first need to acquire those skills in order to adopt digital technologies in the first place? To put it differently, do companies not adopt digital technologies because they do not have digital skills in-house? And is the lack of digital skills a barrier to adopting digital technologies?”
She said the study suggests that at the early stage of adoption and diffusion of digital technologies companies need - and are waiting for - a higher supply of skilled and talented workers, and they are quite reluctant to train them on the job.
“Policies aimed at supporting on-the-job training for digital skills could provide a much-needed boost to the adoption of advanced digital technologies. We hope the study will now help employers and policymakers understand the trends of skills changes, and also be relevant to policymakers fostering growth at different geographical levels, as well as for public and private enterprises pursuing innovation activities.”