The Future of Business: A Conversation with SMEs – published by Vodafone Ireland today, reveals that despite overwhelming positivity about the future of the SME sector in Ireland, clear challenges exist in terms of digital skills and adopting new ways of working to stay competitive and attract and retain talent.
This report is the first part of a series of research and engagement exercises by Vodafone Ireland, called Open Conversations. The study uniquely engaged nearly 600 SME business owners, industry representatives and employees about their current experiences and aspirations across business growth & investment, smart working, the impact of technology and skills & training in Ireland’s most important business sector.
There is significant optimism in the sector with nearly 90% of SMEs predicting growth between now and 2021. This optimism was shared by employees, with 60% confident about the future prospects of their company.
Munster is the most optimistic region, with 67% of SME employees feeling confident about the future prospects of their company (versus 62% in Connaught/Ulster, 60% in Dublin, with Leinster (outside of Dublin) overall coming in lowest at 52%). Additionally, Munster employees are the happiest at 60% (versus Dublin 59%, Connaught /Ulster 58% and Leinster 52%).
When asked about investment, 60% of SME business owners surveyed confirmed that they plan to invest in their business within the next 12 months; with the majority (71%) being spent on staff attraction and retention, followed by sales (64%) and technology & digital tools (57%). In fact, 69% of small firms plan to increase technology investment within the next 1-5 years, higher again for medium sized firms, who are also most likely to invest upwards of €50,000.
However, nearly seven in 10 (68%) see barriers to growth, with 46% seeing it come from Brexit, followed by 40% from taxes and rates.
Nearly three quarters (74%) of SMEs said technology enables better decision making and that reliance on IT and automation results in employees adapting and gaining new skills.
The study also shows the untapped potential of smart working – the combined use of technology with flexibility and agility for employees to work from home or co-working hub or hybrid model – in attracting and retaining talent. One in three (33%) employees see it as top priority in their current role, 50% in a future job and 34% likely or very likely to move job for it.
Employees in Leinster and Connaught/Ulster have the highest demand for smart working, with 79% of employees in both regions in favour of a smart working policy (versus 78% Dublin and 73% Munster).
Speaking this week, Director of Enterprise at Vodafone Ireland, Regina Moran said, "With more than 95% of Ireland’s business economy made up of SMEs, it’s never been more important for Irish businesses to talk to each other and it is vital for us to understand the sector to serve it better, help businesses realise their connected ambition and contribute to their future sustainability."
Sven Spollen-Behrens from the Small Firms Association added, "The economy is growing and so is Ireland’s vital SME sector. However, we need to take measures to protect this growth. Whilst we are seeing confidence among our members we also see concerns around our competitiveness especially in light of Brexit. Challenges like attracting and retaining talent, the increasing cost of doing business in Ireland and a tax system that puts smaller businesses at a disadvantage need to be addressed."