Artificial intelligence and net connectivity are the most significant technologies, but US businesses are among the least likely to invest in digital skills.
Only 36% of US companies consider digital skills a priority investment, despite businesses citing net connectivity and artificial intelligence (AI) as the most significant technologies, according to a Sage research report.
Businesses recognize the financial impact of administrative tasks, and are taking action to reduce the burden, but enterprise in the US was among the least likely to invest in digital skills in 2019, attributing the reason for withholding investment as a "lack of applicability to business strategies," according to the "We Power the Nation" research report from Sage.
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The survey of 3,000 worldwide businesses revealed poor productivity will cost the US economy $346 billion over the last 12 months, but only 61% of US businesses plan to invest in digital skills to increase trade and profitability, with only 25% interested in investing specifically in smart tech, AI, super fast broadband or 5G. Conversely, more than 50% of U.S. businesses cited Net Connectivity as the most significant technology to affect the future of trade.
"Overall, the findings were quite surprising," said Kathy Lord, senior vice president at Sage People. "The lack of dedication to addressing (and remedying) it was unexpected. The fact that only 61% plan on investing in digital skills is a sign of a larger issue surrounding where budgets are allocated, and where the attention of the C-suite lies."
A surprising 41% of US businesses report that "digital skills are not important to their business strategy," with only 25% believing that an investment could increase opportunities for market entry.
"The global productivity deficit continues to grow, yet investment in digital skills can help remedy the issue," said Nancy Harris, managing director, Sage North America. "Our research reveals that not only does it help from a revenue perspective, but it can also improve employee morale; 48% of medium-sized businesses and 53% of large-sized businesses boasted a more productive working environment as a result."
The study also showed that 71% of businesses spend more than 35 hours weekly on compliance, with 50% unaware of digital tax resources available for compliance.
The disinterest towards prioritizing tech skills may not be respected out of the country, yet other nations also have issues, "Unfortunately, there is a global digital skills crisis affecting all countries and all industries therein," Lord said.
"Our tracker points to a huge productivity deficit which can be fixed with digital skills investment. Many businesses are making digital skills a priority, but not all US businesses are, and that's something that needs to change. The US is slow to adopt in certain ways and other countries are feeling the same weight on their shoulders. It's a tough hill to climb as budget, resources and universal adoption often stand in the way of success," Lord said.
The US reputation and perception in the global market is critical. Lord said, "It's very important that the US be known as a country of progressive technological advancement, as other countries often look to us for inspiration, and often our models are replicated in other countries. That being said, there is always room for inspiration from multiple sources and ways of thinking."
That being said, many companies also believe that digital skills training should be supported not only by a corporation's internal team, but by the government as well. Nearly a quarter of businesses (23%) think the government should provide free digital skills training, and 31% believe tax breaks would better support the improvement of their digital skills. This is a possible indicator that a broader push for this kind of government intervention could be on the horizon.
"As businesses around the world continue to face an increasingly competitive marketplace, the need for digital tools and skills has never been greater. As we speak to our customers, they resoundingly agree that a combination of investment and governmental programs can help solve this productivity puzzle," Harris added.
In order to keep up the pace of trade and competition, Sage suggests a multi-faceted approach is required of businesses, which includes investing in people and their digital skills, investing in compliance software for market-entry opportunities with international trade and to free-up time, and investing in technology like AI, big data and machine learning to help solve the productivity puzzle.
Lord said, "Generally, tech development in the US will almost always be at the forefront. We are an innovative country always striving to be the best; however, this report goes to show that, even with our tech-first reputation, the thread of innovation and digital skills adoption isn't necessarily woven into every fabric of every company or industry."
Some US business are still operating old-school. "In fact, one of the findings in our research globally revealed that less than half the companies have migrated to using cloud technology," Lord said. "Many times, a focus on tech investment and providing training to employees to advance their digital skills may be isolated to Silicon Valley, and doesn't necessarily expand past its borders into other geographic areas and industries."
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