Scotland’s small and micro businesses – the 98% of the private sector that generate £98 billion in turnover and support over 940,000 jobs – are the backbone of our economy.
The Federation of Small Businesses (FSB) Scotland’s recent “Back the Base” manifesto for the 2026 election rightly calls on political parties to shift focus from chasing unicorns to supporting the stable, local firms that sustain communities and drive consistent growth.
It highlights critical issues like skills shortages, bureaucratic burdens, underfunded business support services, procurement barriers, and the need for practical help with net zero transitions.
Building directly on this foundation, a key pillar for empowering these SMEs must be accelerated adoption of digital technologies – from basic digital tools and e-commerce to AI, data analytics, and cyber security. Without this, many risk being left behind in a rapidly digitising economy.
FSB research, including the 2015 Digital Disruption and Small Business in Scotland report and the 2025 Big Small Business Survey, consistently shows that digital skills gaps (particularly in marketing, AI, and digital tools) are a major barrier, with many Scottish SMEs lagging in uptake compared to potential.
The Opportunity and the Gap
Digital adoption offers SMEs transformative benefits: improved productivity, access to new markets, cost savings, and resilience. Yet, as the manifesto notes, three-quarters of small businesses have never hired an apprentice, and skills shortages persist.
Broader FSB insights and government references indicate that only a minority of Scottish SMEs fully embraced new digital technologies even during the pandemic acceleration. Recent programmes like the National AI Adoption Programme and AI Scotland show promise but reach is limited, with many firms facing awareness, cost, and skills hurdles.
The manifesto’s emphasis on an “Apprenticeship Accelerator Grant,” increased funding for Business Gateway, mandatory regulatory impact assessments, and better support services provides the perfect platform to integrate digital enablement. Here are targeted recommendations to turn “Back the Base” into a digital empowerment strategy for Scottish SMEs.
Specific Recommendations for Digital Uptake
1. Launch a Digital Skills Accelerator Grant Tied to Apprenticeships and Training
Extend the proposed Apprenticeship Accelerator Grant to include dedicated digital and AI upskilling pathways. Micro and small firms often cite the £80,000+ cost barrier for apprenticeships; a top-up grant (e.g., £2,000–£5,000 per business) could fund short, practical digital training modules or “digital apprenticeships” in e-commerce, basic AI tools, cyber security, or data use.
Partner with Business Gateway and colleges to deliver bite-sized, sector-specific programmes. This directly addresses the manifesto’s skills priority while closing the digital/AI skills gap flagged in FSB surveys.
2. Boost and Digitally Focus Business Gateway Funding
The manifesto highlights Business Gateway’s vital role yet modest £16.3 million budget compared to larger enterprise agencies. Increase core funding with a ring-fenced digital adoption stream, offering free or subsidised “digital health checks,” one-to-one advisory sessions, and matched grants for cloud software, CRM systems, or AI pilots. Prioritise outreach to the 64% of small firms already engaging with the service, making digital diagnostics a standard entry point.
3. Mandate Digital Impact Assessments in Regulation and Procurement
Building on the call for mandatory Business and Regulatory Impact Assessments (BRIAs), require explicit evaluation of how new policies affect SMEs’ digital capabilities and costs.
In public procurement – where only 23% of small firms currently tender – simplify digital requirements, offer “digital readiness” support for bidders, and weight contracts to reward local SMEs using modern tools (e.g., e-invoicing or sustainable digital supply chain tracking). This reduces the “paperwork day” burden while incentivising uptake.
4. Expand Accessible, Hands-On AI and Digital Support Programmes
Scale successful initiatives like the National AI Adoption Programme and Business Energy Scotland’s model into a broader “Digital Nation Support Hub.” Provide hands-on project grants, peer networking (including rural roadshows), and plain-language guidance.
Address the manifesto’s net zero knowledge gap by integrating digital tools for energy monitoring and compliance. Aim for higher reach: target 40–50% engagement among SMEs within two years through targeted marketing to FSB members.
5. Reduce Bureaucratic and Financial Barriers to Tech Investment
Maintain and enhance the Small Business Bonus Scheme as a “lifeline,” while exploring tax incentives or simplified capital allowances for digital investments (e.g., software, hardware, or cyber insurance). Reform the fragmented non-domestic rates system (with its 14 assessors) to ease cashflow for tech upgrades. FSB UK-wide reports like Redefining Intelligence and The Tech Tonic underscore the need for practical diagnostics and funding access – Scotland should adapt these for local delivery.
6. Foster Collaboration and Evidence-Based Policy
Establish a standing FSB–Scottish Government–industry Digital SME Forum to monitor adoption progress, share best practices, and co-design interventions. Use quarterly Small Business Index data to track digital metrics specifically, ensuring policies evolve with real business feedback.
A Digital “New Deal” for the Base
The “Back the Base” manifesto warns against overlooking the 98% in favour of high-profile scale-ups. Embedding digital enablement into its recommendations – through targeted grants, enhanced support services, smarter regulation, and procurement reform – would unlock productivity, innovation, and resilience across Scotland’s economy. Small firms do not need complex overhauls; they need practical, affordable, and accessible pathways to compete and thrive in a digital world.
As parties prepare manifestos for 2026, adopting these measures would demonstrate a genuine commitment to the businesses that form our economic foundation. It is time to back the base – digitally empowered, stable, and ready for the future.
This article draws on FSB Scotland’s published research, surveys, and the “Back the Base” manifesto to propose actionable next steps.
