Digital Adoption

They are also blurring the lines between our physical and digital worlds, so much so that the adoption of digital technologies requires both companies to rethink their activities and workers to reconsider their skills to perform new tasks and jobs.

However, although firms are at the heart of these transformations very little is known about how they actually respond or contribute to the skills transformation process and the extent to which new digital technologies accelerate demand for up-skilled or re-skilled and specialised workers.

This was precisely the driver for a study into the use of digital technologies and the adoption of digital skills across Greater Manchester, which was led by Silvia Massini, Mabel Sanchez Barrioluengo and Xiaoxiao Yu. The authors deliberately chose Manchester as it has been a city at the forefront of efforts to increase digital adoption.

Findings

The subsequent report on the adoption of digital technologies and skills in Greater Manchester yielded a number of insights:

• 78% of respondents had adopted at least one digital technology. This adoption occurs mostly in firms in the knowledge-intensive service sector (85%) reflecting the specific industrial context of the Greater Manchester city region.
• Different digital technologies are at different stages of diffusion. Cloud computing is the most widespread technology (70% have adopted this technology) while other technologies have been adopted only in one out of four firms. Among them, big data and AI are the second most adopted technologies.
• Digital technologies are complementary. For instance, 43% of respondents had adopted two or more digital technologies, with cloud computing and AI, and cloud computing and big data the most frequent combinations. A potential explanation is that firms wanting to use AI require large datasets to train their algorithms, which can be generated and collected using big data practices and processed and stored on cloud computing services.
• 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%).
• Digital technologies increase both a firm’s productivity and employment levels. Some 22% of the adopters had recently increased the number of employees and 41% had increased the number of skilled workers.
• Lack of access to skills is one of the main barriers to adopting digital technologies (as well as its cost). Some 31% of firms reported these two barriers as significant adverse reasons for technology diffusion, in particular in the case of AI and big data.
• Adopters of digital technologies tend to rate higher both digital and non-digital skills. But key differences appear for capabilities related to problem-solving (technical problems, identifying needs and technological responses, creativity, identifying competence gaps) in a digital environment, as well as practical traditional skills like numeracy, literacy, IT, reading and writing.

Very little is known about how firms actually respond or contribute to the skills transformation process…

Recommendations

The authors propose three key policy recommendations to maximise the city region’s growth in the sector for advanced digital technologies.

1. To recognise SMEs in knowledge-intensive industries as a 'vanguard sector' in the adoption of digital technologies.
2. To build Greater Manchester’s digital strategy around current local technology strengths.
3. The adoption of digital technologies should follow a human-centric approach where skills play a key role in the levelling-up agenda.

Added Dr Sanchez Barrioluengo: "We would also like to highlight the important role that higher education providers need to play in the development of the right skillsets to match employers' needs. Understanding lifelong learning opportunities to guarantee base level of skills of the next generations to enter the workforce, and upskilling the ‘hidden middle’, represent important elements for levelling up the digital economy of the city region."