The report, from the Digital Marketing Institute, also said that a geographical divide is growing with Dublin-based firms faring better than their country cousins.
And while online spending by Irish consumers is up 54pc year-on-year, over 60pc of this or €3.9bn, is being lost to overseas companies.
According to Ian Dodson, director and co-founder at the Digital Marketing Institute, there is an enormous opportunity for digital skills to drive the economic recovery but its 2014 study showed that eight out of ten Irish professionals failed to have an entry level competency in digital skills.
These skills were measured across a range of sectors and included mobile and internet marketing as well as online strategy.
“As a nation, we need to invest more heavily in professional training, not just for new entrants, but at a senior level to ensure digital knowledge capital reaches across our organisations,” he said.
He added that Ireland’s position as a digital hub with Europe is under threat.
“To compete we need to create a talent pool able to take advantage of the opportunities which sit right in front of us.”
He said that unless we address the talent gap, jobs growth and economic progress will be significantly impacted.
Ireland’s digital economy is expected to be worth €21.1bn by 2020, making up 10pc of gross domestic product and creating 150,000 jobs.
But we risk failing to reach these targets unless the correct skills are taught.
These skills include digital strategy and planning while we rate highly in some others which include social mobile and analytics.
On a sector basis, the strongest include the hotel and leisure industries with skills levels at 47pc while the lowest include retail and the food and beverage businesses (36pc and 30pc respectively).
By comparison internationally, the retail sector is one of most successful in capitalising on digital spend.
“Bricks and mortar businesses need to understand the digital channels in which consumers are interacting with their business just as much as those selling directly online.”
In addition, entry level marketers are 26pc more proficient than their counterparts with over 20 years’ marketing experience.
And the country’s small businesses are amongst the worst performers.
While small businesses account for 23pc of Ireland’s workforce, they have the weakest digital skills.
Firms with between 11 and 50 employees scored 25pc lower than medium sized companies and 22pc less than start-up businesses.
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