White Paper Digital Skills

Why Digital Skills?
A white paper by the Digital Media Forum

March 1st 2010
In collaboration with
In the Workplace. In the Community. For every Citizen.
Digital Depot, The Digital Hub, Thomas Street, Dublin 8, Ireland. t: 353 1 4893602 e:info@digitalmediaforum.net
w: www.digitalmediaforum.net
ABOUT
Digital Media Forum
The Digital Media Forum is an innovation company specializing in

developing and facilitating enterprise networks in the digital media
industry. It has pioneered the creation of sectoral groupings such as the
Animation CEO Forum and the Mobile TV Pilot Network to promote co-
operation between companies with shared interests and the potential for
specific synergies in joint venture opportunities. It has actively worked to
bring industry and academia together in joint research projects to develop
leading edge commercial products and services. The digital media forum
comprises over 600 digital media companies. Its current aim is to improve
the digital literacy standards in Ireland with a view to creating a viable
market for indigenous digital media companies.
www.digitalmediaforum.net
I-CANDO Learning
I-CANDO Learning Ltd. is an innovative learning company dedicated to

“helping you learn new things”. Based in The Digital Hub, I-CANDO‘s core
product is the I-CANDO Digital Skills Programme which introduces
candidates to the basics of the new digital technologies and helps them
learn in a fun, practical and safe way. The learning modules are
computer, music, photo, video, social surf and webshare. The training
enables candidates to confidently progress and develop their skills in using
the existing digital devices that will develop their ability to live online in
today’s digital world. The entire suite offers 60 hours of online, interactive
guided learning to the user.
www.i-cando.ie
CONTENTS
1. Executive Summary
2. Productivity benefits of providing Digital Literacy Training in the

workforce
3. Examples of productivity in the workforce using Social Media and

learning technologies
4. Economic benefits of Digital Literacy in the Community
5. Economic Benefits of Digital Literacy Training for the Unemployed
1. Executive Summary
The purpose of this report is to outline the benefits of teaching digital skills
and increasing digital literacy within the Irish workforce and society in general.
If we are to achieve the aims of creating a Smart Economy1, it is critical that
we not only avoid a further digital divide, but that we encourage those within
employment and those looking for employment to equip themselves with the
necessary digital skills for them to flourish within a services-driven Smart
Economy.
The outputs outlining the benefits of such an approach are extrapolated from
international reports and put into a verifiable Irish context. The main outputs
from this report attest to the following:
• Providing digital literacy training within the workforce will give

Ireland a €2.1 billion productivity gain annually.
• Digital Literacy will offer a 3-10% wage premium for those who
choose to upgrade their ICT skills in Ireland.
• Digital Literacy training could provide benefits of €1.6 billion per

year in communities at risk of poverty.
• By 2020, almost 75% of jobs in Ireland will be in the services area

and will require basic digital literacy skills.
• Adults who are able to use ICT are 25% more confident about
finding a job than non-users.
1
http://www.taoiseach.gov.ie/attached_files/BuildingIrelandsSmartEconomy.pdf
“Digital Literacy is increasingly becoming an essential life skill and the
inability to access or use ICT has effectively become a barrier to social
integration and personal development.”
- (DG Information Society and Media Group, 2008, p. 4).
2. Productivity benefits of providing Digital Literacy Training
in the workforce
Studies and research clearly show that the implementation of a digital literacy
programme within a workplace significantly improves the productivity of the
workforce.
As of January 2010, there was 1,768,400 employed within Ireland with an

average hourly rate of €21.90 (CSO, 2009)2. Of these employees, a
percentage, conservatively 70%, would increase productivity given basic
digital literacy training as per the case study in New Zealand.3 Given that skills
range within the group would vary, an estimated improvement of 20 minutes a
day or 1.7 hours a week is suggested, taking a conservative view from the
studies of other digital literacy programmes. The table below shows the
potential productivity gain for Ireland, if all employees who used ICT within
their work were able to achieve a productivity gain of 20 minutes per day.
These productivity gains could include:
• Better internal communication

• Travel savings through use of ICT
• Access to information critical to the business
• Innovation around products and services through collaboration
• Interfacing with customers through social media
2
http://www.cso.ie/releasespublications/documents/earnings/current/earnlabcosts.pdf
3
“Summary of International Reports, Research and Case
Studies of Digital Literacy Including implications for New Zealand of adopting a globally-recognised digital
literacy standard” (2010, NZCS)
http://www.nzcs.org.nz/files/201001%20Digital%20Literacy%20Research%20Report.pdf
Employed Population 1,768,400
Population benefiting from 1,237,880
ICT competency
Average hours gained per 78
employee per year (47 weeks)
Average € saved per employee €1,708
Annual potential productivity 2,114,299,040
gain for Ireland
Table 1 Potential Productivity gains based on Irish working population
An annual productivity gain of €2.1 billion (€21.1 billion over 10 years) is

significant and it is based on the assumption that 70% of the workforce could
achieve productivity improvement.
Providing digital literacy training within the workforce will give Ireland a
€2.1 billion productivity gain annually.
3. Examples of productivity in the workforce using Social
Media and learning technologies
Oil & Gas Industry
With fewer resources overall and colleagues scattered across continents, it is

no surprise that the Microsoft and Accenture Oil & Gas Collaboration Survey
2010 4, which surveyed 275 professionals within international, national and
independent oil and gas and related companies, found that social media and
collaboration technology adoption is primarily a grassroots phenomenon
within firms. At the same time, half of those surveyed said their companies
prohibit or restrict the use of many of these publicly available tools, such as
photo-sharing and social networking sites.
Oil and gas employees stated that productivity gains (37 percent), work
flexibility (95 percent) and the ability to complete projects on time and on
budget (36 percent and 38 percent) are the primary reasons for use of social
media and collaboration tools. However, companywide endorsement has not
mirrored employee demand.
“The survey shows that companies are not realizing the strategic benefits
from their collaboration tools investments such as increased work-force
performance, improved sharing of knowledge or skills across the work force,”
said Craig Heiser, Accenture senior executive in the Energy industry group’s
management practice. “To realize the full potential of collaboration
investments, companies need to change work processes and individual roles
while training their employees on how to achieve improved business
performance through collaboration.”
*********
A recent University of Melbourne study5 showed that people who use the
Internet for personal reasons at work are about 9 percent more productive
that those who do not.
*********
4
http://www.accenture.com/Global/Services/By_Industry/Energy/R_and_I/MicrosoftAccentureOilSurv
ey2010.htm
5
http://voice.unimelb.edu.au/news/5750/
A recent report by UK-based research think tank, Towards Maturity 6
investigated the bottom line business benefits from investing in elearning
technologies. Of the companies evaluated, 69% reported that time for staff to
reach and prove competency in their jobs was faster. 82% believed that they
could deliver learning interventions faster with 26% able to deliver learning in
less than half the time than before. 59% reported improvements in ability to
implement changes in products and process.
*********
The benefits of the use of social media in an enterprise context are outlined
by Berend Jan Hilberts in an insightful blogpost on his blog
“Iconoclast@work”:7
• Better connections with customer

• Better cross-company distributed knowledge
• More cross-silo collaboration
• More attractive workplace for talent of the future
• Increased open/co-creative innovation
*********
The January 30 2010 issue of The Economist included a special report on
social networking. Overall, the special report8 concludes: “that social
networks are more robust than their critics think, though not every site will
prosper, and that social-networking technologies are creating considerable
benefits for the businesses that embrace them, whatever their size.”
The recent State of Workforce Technology Adoption9 conducted by Forrester

Research found that while most US enterprises agree that collaboration tools
are important for members of a team, - especially if that team is distributed
across many locations, - such tools are not widely adopted. e-mail, with 87%
6
http://www.towardsmaturity.org/article/2009/09/28/towards-maturity-efficiency-indicator/
7
http://iconoclast.typepad.com/blog/2010/01/the-economist-goes-social-and-gets-it-almost-right.html
8
http://www.economist.com/specialreports/displaystory.cfm?story_id=15351002
9
http://blogs.forrester.com/information_management/2009/10/the-state-of-us-workforce-technology-
adoption.html
adoption, is the default collaboration tool for most people in business.
This is a particular problem for younger workers, who are widely using social
media technologies outside of work. The Forrester study found that sixty
percent of workers under thirty use social networking at home, but less than
one quarter of them - 13% - also use such technologies at work. The report
goes on to suggest the following:
• Most applications are not widely adopted: Email, word processing, Web
browsers, and spreadsheets are still the top four applications.
• There is pent up demand for smartphones with only one in 10

information workers in the US possessing a smartphone for work.
• Collaboration tools are stalled out, leaving email to reign supreme.
• Gen Y employees are getting squashed at work.
*********
According to the UK report, the Independent Review of ICT User Skills,10
employers are continuing to report gaps in ICT user skills amongst their
employees. The 2007 National Employer Survey in the UK11 collected data
from 79,000 employers with responses coming from businesses of all sizes
and in all sectors of the economy. Twenty-four per cent of firms surveyed said
their ICT user skills needed improving, with the need increasing with the size
of business and 72.3% of businesses said they had increased training spend,
or expanded training programmes, to address their skill gaps as they believed
this had the potential to impact on productivity.
The Office of National Statistics (ONS) in the UK has produced a number of

studies linking internet access for employees with business productivity. A
study into the manufacturing sector, found that on average companies
10
Independent Review of ICT User Skills, Baroness Estelle Morris, June 2009
11
National Employer Skills Survey UK, 2007
experience a 2.9% increase in productivity for every 10% of employees who
are given internet access12. In line with these findings, eSkills have suggested
that through exploiting digital technology, small companies could “generate an
additional £25bn of Gross Value Added (GVA)c over the coming five to seven
years”13.
12
IT and Telecoms Insights 2008: Competitiveness of the UK IT and Telecoms Sector,
e-skills UK, 2008
13
IT and Telecoms Insights 2008: The Impact of ICT on UK Productivity, e-skillsUK/
Adroit Economics and Regeneris Consulting, 2008
4. Economic benefits of Digital Literacy in the Community
The Digital Inclusion Initiative (DII) was a whole-of-community effort,

spearheaded by the non-profit organization, Infoxchange in Australia, and its
eleven corporate partners. The initiative was designed to eradicate the digital
divide by providing access to computer hardware, software, affordable
internet and user support for residents of public housing. Atherton Gardens
Estate in Fitzroy, a disadvantaged community in Victoria, with a population of
3,000 residents, offered the following case study for the successful outcome
of employing digital literacy programmes in the community. Using a robust
economic model, management consulting firm A.T. Kearney has been able to
identify and measure these benefits. The results are compelling.
Benefits
In the five years since its launch in 2002, DII has generated $5.9M (€3.75M)
of benefits to residents and the broader community in Atherton Gardens, in
the following areas:
1. Education and employment ($4.1 million)

» Improved education
» Addition of valuable language and IT skills
» Access to online resources to search for jobs
2. Communication and connectivity ($1.3 million)

» Discounted internet access
» Cheaper alternatives to traditional telephone communications
» Connectivity with the community
3. Transactional efficiencies ($0.2 million)

» Utilisation of online delivery of government and financial services
» Resident empowerment from increased access
4. Health and wellbeing ($0.3 million)
» Access to online resources and support networks
» Greater engagement with the wider community
Analysis revealed a weighted average increase in wages by $111 per month.

International evidence confirms a 3-10% wage premium for those who
upgrade ICT skills.
In Ireland, according to the CSO – Survey on Income and Living Conditions

(2008), 14.4% of the Irish population were at risk of poverty. This equates to
642, 174 people. If they acquired digital literacy skills, going by the Austrailian
model, that would mean the following savings:
3000 = € 751,000 per year

1= €250.33 per year
642, 174 x €250.33 = €160,757,343 per year
Digital Literacy training could provide benefits of €1.6 billion per year in
communities at risk of poverty in Ireland.
6. Economic Benefits of Digital Literacy Training for the
Unemployed
“Making the EU “the most competitive and dynamic knowledge-based

economy in the world, capable of sustainable economic growth with more and
better jobs and greater social cohesion".
- Lisbon Agenda (March 2000)
“Over four million job losses are forecast for skilled manual workers (in
Europe). Many of these are likely to be routine jobs replaced by new
technologies.…(the) move (is) away from primary and basic manufacturing
jobs towards services.” - European Centre for the Development
of Vocational Training
According to the European Centre for the Development of Vocational Training

(CEDOP), the nature of industrial and technological change is increasing the
demand for the highly- and medium-qualified groups in Europe, but at the
expense of the low-qualified.
Demand for qualifications, net change (EU-27+)
The group forecasts a further substantial decline in employment in primary
industries, especially in agriculture, manufacturing and production. The main
areas of employment growth are services, especially marketed services,
distribution and transport. By 2020, almost three quarters of jobs in EU-25+ in
2020 will be in the services sector.14
At present, there are 434,700 unemployed in Ireland15. The average cost to

the state is €20,000 per person annually when the job seeker allowance or
benefit and tax take loss to the exchequer is taken into account. This amounts
to €8.7 billion annually as a cost to the state…. or €23,819,178 per day.
To quote from Building Ireland’s Smart Economy - A Framework for

Sustainable Economic Renewal (December 2008):
“A key feature of [the Smart Economy] is building the innovation or ‘ideas’

component of the economy through the utilisation of human capital - the
knowledge, skills and creativity of people - and its ability and effectiveness in
translating ideas into valuable processes, products and services.”
“Ireland cannot afford to leave anyone behind in the drive to improve the skills
and competencies of our work force and to ensure that workers possess the
skills required to service a Smart economy.”
Employability
According to a recent UK report, the Independent Review of ICT User Skills16,
over the last 20 years, the proportion of people using IT in their job in the UK
has nearly doubled to 77%, with an estimated 22m17 people using technology
14
http://www.igfse.pt/upload/docs/gabdoc/2008/10-Out/BN_2008_09_en.pdf
15
http://www.inou.ie/policy/statistics.html
16
Independent Review of ICT User Skills, Baroness Estelle Morris, June 2009
17
Digital Britain: Creating Skills for the Digital Economy, submission to Lord Carter by
eSkills UK and Skillset, 2009
at work. For the remaining 6m people in the workforce, these skills may not be
critical for their employer but they remain important life skills. The same can
easily be said for Ireland.
Increasingly, employers advertise jobs solely online, and recruitment

processes are increasingly electronic. More employers are making use of the
latest web 2.0 technology (such as sites like LinkedIn) to recruit employees,
and increasingly employers are using or considering using e-learning, as a
means to train employees. Evidence from research18 by the National
Research and Development Centre for Adult literacy and numeracy shows a
link between the development of Digital Life Skills and employability. Those
people who are already digitally excluded are more likely to suffer
unemployment in a time of recession. A lack of basic ICT skills will be a
disadvantage in both finding and securing a new job.
A recent study by UK Online clearly showed that adults who were able to use
ICT were 25% more confident about finding a job than non-users.19
Providing digital literacy training will prepare this unemployed segment

for the rapidly growing services sector of the Smart Economy.
Adults who are able to use ICT are 25% more confident about finding a
job than non-users.
18
The Digital Divide: Computer Use, Basic Skills and Employment. A Comparative Study in Portland, USA and
London, England, NRDC, Oct 2008
19
Does the internet improve lives?, UK online and Freshminds, March 2009

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Why Digital Skills?

A white paper by the Digital Media Forum

In the Workplace. In the Community. For every Citizen.

Digital Media Forum

The Digital Media Forum is an innovation company specializing in

I-CANDO Learning Ltd. is an innovative learning company dedicated to

2. Productivity benefits of providing Digital Literacy Training in the

3. Examples of productivity in the workforce using Social Media and

4. Economic benefits of Digital Literacy in the Community

5. Economic Benefits of Digital Literacy Training for the Unemployed

• Providing digital literacy training within the workforce will give

• Digital Literacy training could provide benefits of €1.6 billion per

• By 2020, almost 75% of jobs in Ireland will be in the services area

- (DG Information Society and Media Group, 2008, p. 4).

As of January 2010, there was 1,768,400 employed within Ireland with an

These productivity gains could include:

• Better internal communication

An annual productivity gain of €2.1 billion (€21.1 billion over 10 years) is

Oil & Gas Industry

With fewer resources overall and colleagues scattered across continents, it is

• Better connections with customer

The recent State of Workforce Technology Adoption9 conducted by Forrester

• There is pent up demand for smartphones with only one in 10

• Collaboration tools are stalled out, leaving email to reign supreme.

• Gen Y employees are getting squashed at work.

The Office of National Statistics (ONS) in the UK has produced a number of

The Digital Inclusion Initiative (DII) was a whole-of-community effort,

1. Education and employment ($4.1 million)

2. Communication and connectivity ($1.3 million)

3. Transactional efficiencies ($0.2 million)

Analysis revealed a weighted average increase in wages by $111 per month.

In Ireland, according to the CSO – Survey on Income and Living Conditions

3000 = € 751,000 per year

“Making the EU “the most competitive and dynamic knowledge-based

- Lisbon Agenda (March 2000)

According to the European Centre for the Development of Vocational Training

Demand for qualifications, net change (EU-27+)

At present, there are 434,700 unemployed in Ireland15. The average cost to

To quote from Building Ireland’s Smart Economy - A Framework for

“A key feature of [the Smart Economy] is building the innovation or ‘ideas’

Increasingly, employers advertise jobs solely online, and recruitment

Providing digital literacy training will prepare this unemployed segment

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