1 Introduction

Today, globalisation and the constant expansion of international infrastructure and communications have become a salient part not just of our daily life but of business activities, too. Advances especially in information and communications technologies (ICTs) are therefore of increased importance (OECD 2004, 13 ff.). SMEs are often called “the backbone of a country’s economy” (EC 2014, 10). Yet, all SMEs struggle to husband their scarce resources and to allocate them efficiently (EC 2016). A clear gap has been identified between actual ICT skills and competencies, on the one hand, and the perceived importance of ICT as an important tool in perfecting organisational business strategy and boosting business success, on the other (e.g. Ambola et al. 2010; Arendt 2008; Paraskakis and Hatziapostolou 2014).

Small to medium-sized enterprises (SME) may not be large, but they are nevertheless a very powerful and important driver for the economy. The number of SMEs totals to 21.2 million in Europe: they account for almost 67% of overall jobs and as many as 99.8% of all enterprises in the non-financial business sector. Their knowledge , skills and abilities in handling IT systems have become an indispensable asset and success factor. Yet, despite the importance of IT to SMEs, skills gaps and competence shortages amongst the workforce result in it not being sufficiently exploited. This applies to companies of all sizes, although SMEs are known to be slower than large organisations in adopting new information technologies . On the other hand, SMEs could benefit much more from using IT were it not for the barriers and challenges in the areas of management skills, technological capabilities and productivity that hold them back and prevent them from achieving innovation, growth and profitability. The lack of qualified IT workers is, then, a major problem for smaller companies. In order to get an overview of the state-of-the-art knowledge , an analysis of relevant scientific studies will be conducted in this chapter, and possible solutions will be identified. The goal is to derive concepts for SMEs that could enable them to manage their specific challenges in a highly competitive environment .

As is illustrated perfectly in the survey “Der Zeit voraus” conducted by the Boston Consulting Group (2013), early ICT adopters attain higher turnovers and create more employment than later adopters. Moreover, the ICT leaders’ turnover growth advances far more compared with the average rate of GDP growth achieved by the country as a whole. SMEs are therefore under pressure to adopt and integrate both new technology and technological processes swiftly, before the gap between skills and the technology increases still further. This can only be realised if they consistently work on improving their skills and human capital , on applying innovations and on aligning ICT with their corporate strategies (OECD 2004).

The knowledge , skills and abilities needed to profit from ICT and align the company’s systems to business demands have become an indispensable asset (Dorner and Lehner 2008). This applies to companies of all sizes, although SMEs are known to be slower than large ones in adopting new ICTs (OECD 2004). Despite the importance of ICT in SMEs, their exploitation at present is suboptimal, as a result of skills and competence shortages amongst the workforce (e.g. Yanqing et al. 2002; Lee et al. 2002; OECD 2004; Dorner and Lehner 2008; CompTIA 2012). On the other hand, SMEs can benefit even more than their larger competitors from using ICT to maximise their potential (e.g. Vieru et al. 2015), were it not for the barriers and challenges in the areas of management skills, technological capabilities and productivity that hold them back (OECD 2005, 4). The lack of qualified workers is a gap that SMEs need to close if they are to keep up with fast-developing technology (e.g. OECD 2004/2005; BCG 2013; CompTIA 2012; Scholarios et al. 2008, 1037; Arendt 2008; Cullen 2001; Petrova & Medlin 2009). To ensure that SMEs grow continuously, it is important to identify the barriers and search for solutions to optimise ICT usage and maximise profitability (CompTIA 2012). The OECD (2005, 10) notes how the advantages gained from doing this can be even greater for SMEs than for larger firms.

Research on ICT skills and competencies in SMEs is to be found in several sources, from 1980s up to the present day (e.g. Nelson 1982; Vieru et al. 2015), but the literature in this area so far has not been reflected upon or analysed systematically with respect to the situation at SMEs. There is a glaring and explicit need for ICT professionals (Sainsbury 2005), and this shortage is considered to pose an even higher risk to SMEs, as changes in the business environment have a bigger impact on the latter (Bernaert et al. 2014). This chapter aims to close the gap by providing specific insights and a research summary on the relevance of IT skills and IT competencies for SMEs. It can form a basis for further exploration of the topic (Fig. 5.1).

Fig. 5.1
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SME characteristics (EC 2003)

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2 Definitions and Related Work

In order to understand the challenges of ICT skills and competencies in SMEs better, it is necessary to keep the terminological demarcations apart and carefully consider the terminology. The different definitions pose an obstacle to this chapter, and indeed to this field of research in general, as the different fundamental principles are applied to samples based on disparate baselines. The existence of a number of different definitions of what constitutes a small- to medium-sized enterprise (SME) (e.g. Wielicki 2007; Ambola et al. 2010) means that some clarification is required. In this chapter, the general definition used by the European Commission will be applied (EC 2003).

It has already been stated that ICT is the backbone of modern enterprises’ organisation. The framework elaborated by Caldeira and Ward (2003, 1166) shows that research results can be assigned to three levels: the individual level (skills and personal knowledge ), the organisational level (organisational competencies and processes) and the business level (business capabilities and the allocation of resources to gain value). This differentiation is highly practical and is well suited to being applied as new relevant models are evaluated for further research. We follow this argumentation and distinguish between the employee level, also known as the individual level, and the organisational level. The organisational level relates to the core competencies of an enterprise, often named capabilities . The individual level addresses the employees of the firm and their individual abilities, which are often treated as skills and competencies (see Fig. 5.2).

Fig. 5.2
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ICT skill assessment levels (Based on Caldeira and Ward 2003)

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There are several different frameworks that can be used to assess and enhance the ICT skills and competencies in enterprises. The CEN Workshop Agreement (CWA) attempts a synthesis of several of the frameworks by first presenting an in-depth analysis of the current state of ICT practitioner skills frameworks, with the long-term target of producing a European ICT skills meta-framework and clarifying its relationship to the proposed European Qualifications Framework (EQF). To find the barriers and solve the ICT skills shortage problems directly, managers prefer assessment frameworks (ICT skills assessment tools or frameworks), such as the Skills Analysis Tool (SAT), the Business Operations Skills Analysis (BOSA) or Skills Framework for the Information Age (SFIA Foundation) (Hay 2003).

3 Literature Search and Analysis Framework

The frameworks mentioned above mostly provide short-term solutions designed to enhance the skills level of the employees (Hay 2003). The frameworks there are thus focussed on the daily business and help firms to understand where the skills barriers are located. Interestingly, though the skills demanded have changed over the years (Gallivan et al. 2004), the situation in SMEs has remained largely unchanged (Bullen et al. 2007). In addition to that, the frameworks do not meet the requirements for structuring the research field overall. A specific analysis framework therefore had to be derived, together with a systematic literature analysis.

In order to identify the relevant studies, literature research was conducted along the guidelines laid down in Webster and Watson (2002). The literature databases Google Scholar, IEEE Xplore, ACM Digital Library, Springer Link and Emerald Insight were searched using the keywords “skills”, “competencies”, “capabilities” and “SME” and combinations of these terms with both “IT” and “ICT” and their German equivalents. The extensive search involved nearly 300 publications that dealt with ICT skills and competencies being evaluated. In a second step, they were narrowed down to a number of highly relevant sources listed in Table 5.1.

Table 5.1 Publications included in the analysis
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The resulting research papers were then checked with respect to their academic quality, and the final list of relevant publications was rigorously classified on the basis of the number “hits” for the different subjects. At the end of this process, it proved possible to identify 13 categories (partially comprised of subcategories) as being relevant in the context of SMEs’ IT skills and competencies and to form the analysis framework:

  • Training (to boost employability)

  • ICT skills gaps

  • Education (lack of knowledge )

  • ICT skills

  • Adoption

  • Investment and value gained from ICT

  • E-skills and their assessment

  • ICT competence

  • Supply of skills and demand for them

  • ICT workforce

  • ICT in organisations

  • Globalisation of ICT

  • Capabilities

The categories are partially overlapping and represent the different research streams related to IT skills and competencies in the context of SMEs. They form a framework model which can be applied both at the organisational and the individual level. In the next section, it will be used to analyse the selected publications at the employee level with a view to highlight the current state of knowledge with respect to IT skills and competencies for SMEs.

4 Analysis of the Findings at the Individual Level

4.1 Training (on Employability)

Training is one of the most widely debated topics at the individual level of SMEs (and at the organisational level, too), which underlines the importance of educational measures in relation to employability. As this issue is discussed in nearly every paper in the subject area, the correlation to the other topics on the subject is strong.

Almost all of the sources (except Scholarios et al. 2006) mention training, though from different points of view (Vieru et al. 2015; Marks and Huzzard 2010; Lange et al. 2000; Hay 2003; Dorner 2009; Scholarios et al. 2004). Marks and Huzzard (2010) additionally mention the changing nature of employment and employability as a factor influencing on-the-job employability. As employability itself changes , the training also has to be adapted to these changes . In order to manage the impact on employability of any on-the-job training assessment , a proper planning will be needed (Antlova et al. 2011; Lange et al. 2000; Paraskakis and Hatziapostolou 2014; Hay 2003; Dorner 2009; Murphy et al. 2007; Mutula and Van Brakel 2007; Scholarios et al. 2006).

The publications on this topic are strongly interlinked with topic 2, the ICT skills gaps. Lack of training to cope with skills shortages is mentioned in several studies (e.g. Vieru et al. 2015; Ambola et al. 2010; Antlova et al. 2011; Paraskakis and Hatziapostolou 2014). In order to support its long-term goals and contribute to growth, the SMEs need employees with proper ICT competencies, which can be gained from educational activities (Antlova et al. 2011, 136). Arendt (2008) argues that the digital divide (formerly identified as being the main problem created by the lack of ICT knowledge revealed in SMEs) today is more affected by the “…needed education, training and management skills” (Arendt 2008, 105) than by lack of access to, and funds for, the technology.

4.2 ICT Skills Gaps

The digital divide (Arendt 2008), the competence gap (Ambola et al. 2010), the skills development barrier (Marks and Huzzard 2010; Lange et al. 2000) and the ICT skills gap (Hay 2003) are different terms used to describe the same shortage of ICT skills. The message is that the level of ICT knowledge in SMEs is too low, or that is has not even yet been perceived (Arendt 2008).

This subject truly addresses the main problem with respect to the ICT knowledge situation in SMEs today, with severe perception gaps existing between the actual and the perceived situation with regard to the supply of skills in SMEs. Several authors have embraced this subject as the most important, while others search for solutions in order to enhance the ICT skills level within the enterprise and ultimately gain value from ICT usage.

Several authors also describe an ICT skill development barrier (Ambola et al. 2010; Arendt 2008; Marks and Huzzard 2010; Lange et al. 2000; Hay 2003; Mutula and Van Brakel 2007; OECD 2013; Scholarios et al. 2004). In order to solve the skills shortages in the enterprise, this development barrier first has to be eliminated. As an immediate consequence of fast-changing technology, the demand for new skills is on the move, too . Arendt (2008), Lange et al. (2000) and Hay (2003) additionally point out the explicit need to close the digital divide as an overall issue, whereas Lange et al. (2000) and Mutula and Van Brakel (2007) identify the lack of governmental strategies as one of the main reasons for the current ICT skills gap.

4.3 Education (Lack of Knowledge)

Education is discussed in 50% of the sources based on employee numbers in the SMEs, and it is far more often discussed at the individual level than at the organisational level of SMEs. Within this subject, two directions can be distinguished:

  • From an academic point of view (Ambola et al. 2010; Vieru et al. 2015; OECD 2013), there is a debate over how educational curricula can be developed so that in the future they meet the business requirements.

  • From an enterprise’s point of view (Arendt 2008; Antlova et al. 2011; Paraskakis and Hatziapostolou 2014; Antlova et al. 2009; OECD 2013; Scholarios et al. 2004, 2006), vocational training and improved employability in the SMEs are proposed as measures that could be taken to reduce the ICT skills gap.

4.4 ICT Skills

The issue of ICT skills was discussed in all publications either directly or indirectly and is closely related to the subject of training and employability.

Several models have been suggested to assess or validate ICT skills (Paraskakis and Hatziapostolou 2014; Vieru et al. 2015; Hay 2003; Dorner 2009). The assessments are supposed to identify skills shortages and consequently improve the ICT skills level. In addition to that, several sources point out the importance of the ICT skills boasted by managers (e.g. Antlova et al. 2011; Dorner 2009; Murphy et al. 2007; OECD 2013). The ICT skills sets are in constant development and are not stable (Marks and Huzzard 2010; Lange et al. 2000; Paraskakis and Hatziapostolou 2014; OECD 2013; Scholarios et al. 2006), which makes it even more difficult to evaluate the ICT skills shortages in SMEs today.

4.5 Adoption

Publications in this category reflect the use of ICT in SMEs, or to be more precise the low degree of ICT usage . Arendt (2008, 96) discusses the barriers to ICT adoption with the emphasis resting on the “…lack of awareness and skills…”; although the barrier is perceived to be a lack of funds, it is further argued that this gap has to be closed in order to reduce the ICT skills gap and enhance the value gained from ICT.

Vieru et al. (2015, 4681) conclude that “…in order for SMEs to benefit from ICT, SME employees need to better understand the challenges confronting SMEs that hamper the adoption and use of ICT”: the problem is identified as lying in the fact that SME employees do not have the proper digital competence which is important for value creation through ICT innovations in SMEs. The only option is to boost training and education on ICT so that SMEs can “…keep up with the new economy” (Vieru et al. 2015, 4689). Antlova et al. (2011) cite poor organisational readiness , insufficient skills and knowledge as reasons for a slow adoption of ICT – leading to slower improvements in the areas of decreasing costs, cutting the number of errors, slashing inventories, creating new market opportunities and improving communications and cooperation with customers and suppliers.

4.6 Investment and Value Gained from ICT

The value to be gained from ICT is seen as one of the main reasons for implementing ICT in the firm (e.g. Vieru et al. 2015; Arendt 2008; Antlova et al. 2011; Dorner 2009; OECD 2013; Scholarios et al. 2004). Antlova et al. (2011), Antlova and Popelinsky (2009) and OECD (2013) further identify long-term growth as a motivation. Competitiveness is added by Dorner (2009) and Vieru et al. (2015) as well as Hay (2003), who also points to innovations as an important tool in order to gain value from ICT.

Investment and value gained from ICT is discussed from several different perspectives . Dorner (2009) proposes a model for assessing the value of IT personnel and suggests that “…if SMEs had more information about their competitive position and their IS/IT position, they would be more willing to invest in IT personnel” (Dorner 2009, 169). Vieru et al. (2015) discuss the value creation through innovation in SMEs and investments made at the employee level of ICT skills. Sufficient ICT knowledge is also felt to be important by Arendt (2008) and is rooted in the importance of investing in training employees in order to increase the capacity for ICT to be adopted and implemented in SMEs, which in turn has an impact on the business success of SMEs.

4.7 E-Skills and Their Assessment

Web competencies and skills are without doubt most important today. Hay (2003) argues that E-skills “…should be the focus for significant staff development and training in innovative firms”. The connection to the ICT skills gap is also cited by Yanquing et al. (2002, 439), who argue that “…SMEs are eager to embrace e-commerce and e-business and attempt to turn the e-commerce opportunities into real business benefits, lack of skills and expertise [thus] become a major barrier…”.

The ICT skills gap can very much be seen as being located at this “new” level of the skills demanded, “…although SMEs are increasingly better equipped with computers and access to the internet, the extent of their use of ICTs for business purposes, particularly including e-commerce and e-banking and most importantly training of employees with the use of e-learning, is still insufficient” (Arendt 2008, 106).

4.8 ICT Competence

This issue is considered from two different points of view. Vieru et al. (2015) and Scholarios et al. (2006) both consider the individual digital competencies to be an important focus of general ICT competencies deliberations, in order for the firm to be able to focus on the employees in the larger context and enhance their individual knowledge and competencies.

Vieru et al. (2015) create a conceptual framework that addresses digital competencies (DC) in SMEs. This framework will ease the process of business planning, along with the mapping of what skills are present in the enterprise, which is linked by Antlova et al. (2011) to the increased competitiveness of the SME, in the long-term, too. Antlova et al. (2011, 139) further argue that “The ICT competencies refer to a firm’s capacity to deploy its material and intangible resources, usually in combination with skills, to reach desired goals”, as these competencies have been associated with enhanced commercial performance by SMEs.

Marks and Huzzard (2010) examined the nature and requirements for employability in the ICT sector SMEs and found that entry-level qualifications were important. The skills shortages are not eliminated with current competence development , which “…occurs informally on the job, for example, through self-tuition via the Internet and not through formalized classroom learning” (Marks and Huzzard 2010, 178). Paraskakis and Hatziapostolou (2014) also discuss vocational training, proposing a methodology to support SMEs in the design of their training. Furthermore, it is stated that “Vocational education and training must equip young learners with skills directly relevant to evolving labor markets, such as e-skills, and highly developed key competences” (Paraskakis and Hatziapostolou 2014, 59).

4.9 Supply of Skills and Demand for Them

Scholarios et al. (2004) feel that the supply of skills, and the demand for them, is governed by the ICT skills shortage in the market. Ambola et al. (2010) emphasise the importance of communications between academia (universities and other educational institutions) and the job market (source of demand). Marks and Huzzard (2010) and Hay (2003) consider the importance of balancing both hard and soft skills in education. Marks and Huzzard (2010, 176) discuss , moreover, the importance of formally providing ongoing competence development, as private-based solutions often lead to “…skills stagnation within the industry ”.

Both Hay (2003) and Ambola et al. (2010) mention the skills shortage. Hay (2003) suggests using an assessment framework for the workers to analyse academic and vocational skills. Ambola et al. (2010), on the other hand, study the different perceptions that exist between academia (UMS KAL University) and the job market (SMEs in Labuan) and how they, in turn, can organise related programmes in order to supply the job market with the actual skills needed. Marks and Huzzard (2010, 178) argue , “The sector is not open for those straight out of education or those wishing to transfer or update their skills”. This is extremely unfortunate for the economy and from a macroeconomic perspective of ICT skills and competencies, as the ICT skills gap consequently continues to grow.

4.10 ICT Workforce

The employee level is naturally more likely to discuss the skills and competencies with regard to the workforce in the SME than publications concentrating on the organisational level. Marks and Huzzard (2010, 175) link up the issues of employability, skills and training with the ICT worker employability, arguing that “…technology-based qualifications are becoming less important for employability and that non-technical graduates could be trained to possess the relevant skills”.

The link between employability and the ICT workforce is also found in Hay (2003), but with the focus on the lack of ICT skills in SMEs and the importance of “…promoting individual and employer participation in learning” (Hay 2003). Dorner (2009) elaborates a testable model for assessing the value of IT personnel, which the SME managers may use “…as a guide in their strategic IS/IT planning process” and for “…IT personnel investment by SMEs ” (Dorner 2009, 169).

4.11 ICT in Organisations, Globalisation of ICT, and Competence

No significant studies were found discussing the remaining issues in the analysis framework at the individual level. In order to avoid a repetition of already-cited arguments, a further discussion of these issues has been omitted.

5 Conclusion

The analysis of the relevant literature shows that an ICT skills gap does indeed prevail and is considered to be a major problem in most of the articles. The skills gap needs to be closed, both with the aid of greater awareness amongst enterprises of the importance of individual learning measures (suppliers of employability and training) and, at the educational level in academia, by improving the coordination and communication of the skills needed (Petrova & Medlin 2009). The real challenge is “…to facilitate changes in attitude, improve access and provision and alter the current financial incentives for skills development ” (Lange et al. 2010, 11). Closing the gap is the responsibility of all agents participating: on the demand side (job market), there is a need for vocational training to be boosted, and on the supply side (academia), there is a need for the curricula and education to be updated (Petrova & Medlin 2009; Wielicki 2007).

Investment and value gained from ICT is generally an important issue for SMEs, if only because of their scarce resources and the fierce competition they face (Bernaert et al. 2014; EC 2016). Vieru et al. (2015) summarise the reasoning by explaining how ICT innovation creates value: however, today SMEs suffer more than ever from their inability to acquire relevant skills and expertise in new technologies, combined with a lack of training and education (Vieru et al. 2015). E-skills and systems are important if SMEs are to succeed in the modern marketplace (Vieru et al. 2015). The enterprises should orientate their business as swiftly as possible to this technology (BCG 2013). Without the knowledge of how to benefit from the opportunities offered by E-Commerce, E-Banking, E-Learning and other such things, the SMEs risk experiencing a loss in market share and in the amount of value they can create.

Todd et al. (1995) discuss IS job skills based on advertisements from 1970 to 1990. Their findings showed a significant increase in references to technical skills for both programmers and analysts and a slight increase for managers. Unfortunately, in view of the major technical developments seen since then, the findings of their study are no longer up to date. Nevertheless, their methodological approach is interesting and a replication of the study could help to highlight what skills are currently in demand.

Finally, Fig. 5.3 illustrates the top five research streams on ICT skills and competencies in the field of SMEs. The numbers attached to the lines count the research papers dealing with interconnections between the main issues. Only a small number of businesses are exactly where they want to be regarding their ICT skills sets. Consequently, the majority are seeking a significant improvement on the ICT skills front. With the help of the framework, a structured literature review has been carried out, and this has successfully helped us to map out the research in this under-investigated field of knowledge . For the first time, it has proved possible to provide a comprehensive summary of the specialised research literature on ICT skills for SMEs. The result is at the moment more like a patchwork and undoubtedly requires further investigation. The categories used in the analysis framework are not selective enough and need to be specified more precisely. However, the summary of research can help us to better understand the situation in practice and can serve as a starting point for future research.

Fig. 5.3
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Concept mapping of the top five aspects on the individual level

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