What digital revolution? Poor broadband keeps 20pc of Irish SMEs offline

8 Dec 2017324 Views

Share on FacebookTweet about this on TwitterShare on LinkedInShare on Google+Pin on PinterestShare on RedditEmail this to someone

If the smartphone is the shop window, does your firm check out? Image: Montri Thipsorn/Shutterstock

Share on FacebookTweet about this on TwitterShare on LinkedInShare on Google+Pin on PinterestShare on RedditEmail this to someone

A good number of Irish businesses are trading like it’s 1999.

“I can’t believe we are still talking about broadband in this day and age,” an acquaintance of mine said over coffee this week.

Well, believe it.

It turns out that 20pc of Ireland’s non-digital SMEs are being kept offline by the want of adequate broadband. That means that terms de jour such as ‘digital transformation’ are just fiction, and up there with other wishful fallacies of our times – unicorns and the like.

‘We live in an age of convenience. Consumers are tech-savvy but can be time-poor. They expect to be able to research and buy from businesses online 24/7. Offline SMEs will lose out to their competitors’
– DAVID CURTIN

The latest Digital Health Index from the IE Domain Registry (IEDR) – a biannual concern – shows that while digitalisation is improving, the want of decent broadband and lack of engagement with e-commerce means that a worrying amount of traditional SMEs may as well be stuck back in 1999.

Back in the RoI, you don’t know how unlucky you are …

The study found that in terms of e-commerce, only 40pc of Irish SMEs have websites capable of processing e-commerce orders.

‘For a quarter of all SMEs in Ulster and Connacht in 2017, to describe their connection as ‘poor’ illustrates the extent of the digital divide’
– DAVID CURTIN

Overall, only two-thirds of Irish SMEs actually have a website at a time when consumers toting smartphones expect to be able to engage with firms on a 24-hour basis.

This does not mean firms aren’t aware of the promises of our digital age. In fact, far from it. Almost a third (32pc) of Irish SMEs want more digital skills and e-commerce training.

Unfortunately, they are being held back by the ongoing broadband bottlenecks that result in firms outside big towns lacking basic broadband.

Nearly 20pc of Ireland’s non-digital SMEs are kept offline by poor broadband. About 14pc of Irish SMEs rate their internet connection as ‘poor’ or ‘very poor’, a figure that rises to 25pc in Connacht and Ulster.

The Irish e-commerce system failure

With Christmas approaching and high-street shops still closing, the failure to move to digital swiftly means increasing numbers of Irish shoppers, dazzled by this age of convenience, will buy online from outside the country rather than in towns and cities.

About 70pc of consumers claim to be frustrated if a business does not have a website, and two-thirds view that business as outdated for not having one. Almost 30pc of consumers say they would not trust a business that does not have a website.

Ireland’s share of the European e-commerce market is €9bn and is expected to grow to €14bn by 2021. However, most of this spend is going abroad to foreign retailers that offer more comprehensive online services.

Bizarrely, while many offline SMEs struggle with the technical aspects of setting up and maintaining a website or social media page, or are kept offline by a poor internet connection, the majority (53pc) of ‘offliners’ say there is simply “no need” to have an online presence in their industry.

However, the Digital Health Index reveals that SMEs with a website earn, on average, an additional €26,825 per annum.

Micro-businesses make up more than 92pc of all businesses in the Irish economy, but only 14pc of SMEs have any web sales ability at all.

Not only that, but Brexit has done little to persuade offline SMEs to go digital. Only 8pc said the UK’s vote to leave the EU had encouraged them to reassess their plans to develop an e-commerce-enabled website.

IEDR CEO David Curtin said it was a mixed blessing that Ireland has achieved its highest digital score in the history of the Digital Health Index, adding that nearly one in five SMEs remain completely offline despite acknowledging that digital is key to the future.

“We live in an age of convenience,” Curtin said. Consumers are tech-savvy but can be time-poor. They expect to be able to research and buy from businesses online 24/7. Offline SMEs will lose out to their competitors.

“Going online, building a website and engaging in e-commerce, even using third-party platforms or products, is not as complicated as it was 10 years ago. There are many inexpensive, often free, easy-to-use tools that can have you marketing and selling your product to customers online in as little as a few hours.”

Curtin said that industry and the Government need to do more.

“Beyond educating SMEs in the benefits of e-commerce and digital business, there are ongoing infrastructural issues that must be addressed as a matter of urgency. Access to Ireland’s broadband network, while vastly improved on a decade ago, is still limited in many rural parts of the country. For a quarter of all SMEs in Ulster and Connacht in 2017 to describe their connection as ‘poor’ illustrates the extent of the digital divide.”

Curtin said that e-commerce awareness is not the problem, it is the lack of infrastructure and ambition that could hurt small firms in the long run.

“Ireland will not become a major e-commerce player overnight. Industry and Government must continue to work shoulder to shoulder, to ensure that SMEs in all regions of the country have access to a modern, high-speed internet connection that allows reliable access to the global digital marketplace. The research indicates that e-commerce awareness is no longer a major issue.

“Going forward, resources must be targeted at improving the digital sales skills of online businesses, who already understand the benefits of an online presence, through digital skills and mentorship programmes,” Curtin urged.

IEDR Digital Health Index infographic

What digital revolution? Poor broadband keeps 20pc of Irish SMEs offline

Infographic: IEDR

Editor John Kennedy is an award-winning technology journalist.

editorial@siliconrepublic.com