As this IOD article describes, First Minister Nicola Sturgeon recognizes businesses are the lifeblood of Scotland’s success.
She also identifies international growth as the key to their success, but that less than 10% export internationally. Also Nicola says:
“By focusing on our innovative abilities, we can develop ground-breaking technologies and return an immense boost for our economy.”
However the challenge is many small businesses aren’t capitalizing on technology as much as they could be, and consequently not developing the required world-class innovations.
Boosting Productivity through Technology Innovation
In Scotland we can see the whole picture of the impact of this when you consider Scotland’s primary economic challenge: Stalled productivity.
The David Hume Institute documented the nation has made no productivity gains in 15 years and “Scotland sits mid-table for productivity among OECD countries, and falls below other European economies such as the Netherlands, France, Italy, Germany, and Spain.”
The Royal Society of Edinburgh responded to explain that productivity growth is dominated by the top 1% of companies, with the remaining 99% stagnant, and they identify a lack of investment in R&D as a primary cause. This is evident through a lack of investment in technology, which is particularly acute for SMEs.
For example the Microsoft digital nation blueprint reports that:
“While 75% stated that digital technology was essential to the future growth or competitiveness of their business only 37% of the 4,000 Scottish businesses surveyed stated that their employees were equipped with sufficient technology skills to meet the business’ digital technology needs.
Only 36% invested in an improved company web site and only 17 – 19% have invested in e-commerce sites and Cloud services.
28% still don’t even have a web site!”
All research repeats that technology and international growth are key ways to boost productivity but as we can see Scotland’s SMEs aren’t equipping themselves with the basic tools needed in today’s world to do so.
Harvard – Cloud Computing Is Helping Smaller, Newer Firms Compete
The solution is the Cloud. It brings technology to small businesses that previously only large organizations could afford and use.
This Harvard Business Review article explores how this technology is powering the US economy, particularly SMEs:
“most strikingly, cloud computing — unlike other technologies like PCs and e-commerce — has been adopted first by smaller and younger firms.
..the most nimble, youthful, and entrepreneurial companies are the pioneers of adoption.”
For example Harvard describes KenSci, a small Seattle-based healthcare analytics company, where they did exactly this:
“KenSci has been able to quickly scale up and offer its services worldwide, without building a sizeable IT-infrastructure beforehand. The computational agility of cloud computing has been playing a role in manufacturing as well, fostering the creation of new “smart’” products.”
The Cloud can help bring and accelerate new Scottish startups to market, across a multitude of industries from Smart Cities, Healthcare and Construction, among many others, greatly boosting the economy and international exports.
Our DigitalScot.cloud series will provide an ongoing showcase of best practices, case studies and vendor profiles to encourage and help with adoption, and evolve into a full e-learning course.