SMEs could contribute an additional £79 million to the UK economy in the next 12 months, if they prioritise investment in new technology.
That’s according to new research commissioned by Three Business, which found that that contribution could, in turn, generate additional Exchequer receipts (through taxes on income and expenditure) worth more than £25 billion per year.
The study, which is based on economic analysis and You Gov polling of more than 2,000 SMEs, has revealed that two in five of SME business leaders say productivity would increase with investments in AI and other digital technologies, while a further 43 per cent believe it would enable them to become faster and more efficient.
Despite the clear benefits of tech investment, however, the survey found that 42 per cent of SMEs are concerned that difficulties onboarding new technologies will impact their business’s ability to grow in future, while more than half (55 per cent) say the costs associated with this are concerning. More than two in five (42 per cent) said they are unable to prioritise investment in tech and a similar amount (43 per cent) are concerned that they’re failing to capitalise on emerging technologies.
In addition, almost all SMEs said that a reliable (97 per cent) and high speed (94 per cent) Internet connection was important for their business. These were both deemed more important than having good local transport links (64 per cent), sufficient office space (69 per cent) and access to skilled labour (83 per cent). But more than half (53 per cent) of these businesses said that poor mobile in their area could affect their ability to grow.
Yet, current connectivity capabilities are working against businesses in the UK, with 5G availability and download speeds lagging significantly compared to Europe. According to recent research, the UK came 22nd out of 25 European countries, with London coming last in a list of 10 European cities. Additionally, the UK’s general network speed is also poor in comparison to Europe, ranking 26th out of 31. Without critical investments and improvements, the UK will continue to lag behind other nations, both in terms of productivity and growth.
Mike Tomlinson from Three Business said, Technology is a key driver and enabler of growth for businesses, who are at the heart of the UK economy. This was recognised in the Government’s long term Industrial Strategy, published last week, which outlined a focus on supporting businesses who can deliver growth in the tech sector, as well as aiding the adoption of technologies that can aid boost the productivity of our businesses. At the same time, through the combination of Vodafone UK and Three UK, we would be able to invest £11 billion in growing the UK’s mobile infrastructure, and create a best-in-class 5G network which would further enable economic growth and innovation in all nations and regions.”
Anthony Impey, chief executive at Be the Business, said, “Without doubt, small and midsize businesses are the powerhouse of the UK economy and have a key role in the new government’s mission to boost growth and opportunity in every part of the country. It’s important to also recognise that the leaders of these businesses are some of the hardest working people, often putting in 12 hours a day, six or seven days a week. So, using new technologies including generative AI is essential if these businesses to become more productive and have the capacity to innovate and grow. As this report shows, this is going to require these technologies to be easy to access and that there’s high quality connectivity readily available to support them.”