Scotland remains "way behind other parts of the UK" in its capacity to exploit the benefits of the e-commerce boom, a landmark Scottish Enterprise report has concluded.
The Scottish e-commerce study, conducted by economic consultants SQW and published last week, is the first comprehensive survey of Scotland's participation in the so-called e-commerce "revolution".
The UK is a world leader in the field – defined as goods and services sold online – which according to the ONS, grew by an astonishing 19% between 2008 and 2010 in defiance of the worst economic downturn since the 1930s.
The report attempts the first official quantification and analysis of the extent of e-commerce activity in Scotland which, it estimates, encompasses 200,000 IT and supply chain jobs, £31 billion in sales and £10bn in direct gross value added (GVA) to the Scottish economy.
Despite a decade of explosive growth, and the presence of exemplary Scottish-based firms such as Schuh, Toolstop, Black Circles and Skyscanner, so far no Scottish minister or development agency leader has publicly addressed the specialised demands of e-commerce or the lack of training in the technical, design, marketing, supply-chain management and order-fulfilment skills needed to succeed in a global marketplace.
Peter Mowforth of e-commerce supplier Indez, a long-standing campaigner for improved leadership of e-commerce within the Scottish public sector, hailed the survey as a "landmark, no-nonsense report from Scottish Enterprise that has got right to the heart of the issue".
He said: "The report's conclusions recognise that e-commerce is the biggest thing in business today, worth up to £31 billion to the Scottish economy this year, and employing at all stages around double the number employed in Scotland's oil and gas industry. Not only is it huge, it's growing in Scotland at around 11% – that's a lot faster than the growth rate of China and it's happening during a recession.
"[The report] confirms that while the UK is globally number one for e-commerce, Scotland is well behind, for example, England's South East."
The UK has a higher proportion of online retail transactions than any other major economy, with 13.5% of all purchases conducted by computer or mobile device. This compares to 7% in Germany, the country with the next highest level of online retail sales.
A new study by Boston Consulting Group, quoted in the report, predicted that, despite the slowdown, the UK's internet economy will continue to expand at a rate of 11% a year for the next four years, reaching a total value of £221bn in 2016, or 12.4% of GDP, an increase of 4 percentage points on 2010. The 11% growth rate identified in the report compares with e-commerce growth rates of 5.4% in the US and 6.9% in China.
As well as assessing growth statistics, the report also looks at "softer" indicators such as employment patterns and job opportunities, determining that Scotland, despite some conspicuously successful online operations, lacked a critical mass of "e-commerce people". Scotland, it said, had the lowest proportion of any nation or region in terms of advertised IT jobs citing e-commerce, with 2% compared to 11% in London and 10% in the East Midlands. Data sourced from Google suggested that the search intensity for relevant e-commerce terms was about 40% lower in Scotland than England over the past year. "The intensity of business interest in web-based e-commerce appears to be far higher in England than in Scotland," it said.
The report was also critical of the Scottish public sector's lack of knowledge and engagement with e-commerce to date and urged a "refreshed" approach by the public sector including "awareness raising activity", publication of statistics, encouragement of further networking and improved training of economic support staff and businesses.
Unusually, the report does not call for more government spending on the sector, saying that grants "would not be an appropriate form of public sector support" as they would contradict the message that e-commerce provides a strong return on investment by SMEs.
In a response to the report, Scottish Enterprise pledged "to increase focus on the e-commerce opportunity for Scotland and in particular, to focus on international e-commerce awareness, advice and support. Within SE our international, ICT and innovation teams are developing a new international e-commerce programme of events, workshops, online support and case studies to raise awareness of these opportunities and to help Scottish businesses capitalise on emerging e-commerce techniques and technologies."
It added: "Critically [the report] also highlights the significant opportunity e-commerce presents for Scotland, and in particular for our exporting and international capability."
A spokeswoman for Skills Development Scotland said: "We welcome this report and have noted the suggestion that an MSc in e-commerce is offered to students with a variety of first degrees."
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