An investment in digital skills has the capacity to contribute an extra €9.5 billion to Ireland's GDP over the next three years, according to research from Google and Amárach.
The report - Bridging the Gap - concludes that Ireland’s GDP could grow by an an additional 0.5% every year between 2022 and 2025 through an ambitious investment in digital skills.
That would see Irish GDP exceeding €544 billion by 2025, the report estimates.
Referencing data from Europe, the study concludes that small and medium sized companies across the continent that invested in digital skills during the pandemic hired three times more employees and generated up to 60% more revenue.
That contrasts with the situation in Ireland where almost half of Irish SMEs do not have a website.
77% of SMEs across the EU have a website.
The research based its findings on interviews with over 1,000 leaders of small and medium sized companies across Ireland.
The majority - 62% - considered their business to be 'less than halfway’ on their digital journey.
Recruiting people with the necessary digital skillset is also a challenge for Irish SMEs with 41% of respondents agreeing that they do not have a person within the organisation who is tasked with developing digital skills.
Business leaders believe that the digital skills gap can be closed, but the challenge is prioritising it over other short and medium-term tasks.
The SME sector - while still emerging from pandemic shutdowns - is grappling with record price inflation, supply chain issues and labour shortages.
About half of companies say they lack basic knowledge about which skills to prioritise in the digital area.
"The timing of this report could not be more important, the decisions that business leaders and policy stakeholders make about digital capabilities in the coming months and years will have profound implications for the long-term productivity and profitability of the SME sector, and for sustainable economic growth over the rest of the decade," Alice Mansergh, Director for Small Business at Google said.
About two thirds of SMEs surveyed said their experience of Covid-19 had incentivised them to invest more in digital skills.
Research showed that 80% of European SMEs increased their use of digital tools during the pandemic and those SMEs that did reported a significant step up in revenue generation.
