Pandemic spurs drive to tech among SME's

The Covid-19 pandemic has had a "transformational" effect on attitudes towards technology among the UK's small and medium-sized businesses, according to a new research.

Published by multinational enterprise software company Sage and Capital Economics, the report said that unlocking future digital investment would be critical to SMEs and could also deliver major benefits to the UK economy.According to the research, 73 per cent of businesses had turned to technology during the pandemic to keep their business functioning, even though only 17 per cent had been planning such investment before the arrival of the virus.Some 43 per cent of SMEs said the pandemic had made them appreciate the need for urgent investment in technology investment order for them to remain competitive and to boost productivity.However, the report said that while Covid-19 had made companies realise the importance of digital investment, the effects of the pandemic had also dramatically reduced their capacity to invest, with more than three-quarters saying that financial constraints were blocking the necessary investment in technology."If these barriers can be overcome and this untapped appetite for investment unlocked in full, UK SMEs could deliver major benefits to the economy, including £145 billion in annual economic output as a result of improved productivity," said the report.The survey found widespread support among businesses for government-backed financial incentives to accelerate technology investment, including digital vouchers, digital adoption grants and tax benefits.Steve Hare, Sage CEO, said: “As businesses across the country face the threat of tighter lockdowns, the need to place firms on a more sustainable footing – by giving them confidence and support to invest – is more important than ever."The only certainty for SMEs right now is uncertainty, and we must do everything we can to ensure firms can stand effectively on their own two feet through a challenging period.“We are on the brink of a once-in-a-generation digital revolution among SMEs – one that will power job creation and growth at a time when it’s most needed, as well as helping to finally crack the UK’s long-standing productivity puzzle."But the UK stands to lose out on these massive gains if we do not encourage this investment now. Currently, businesses do not believe they can deliver even half of the technology investment they need in order to position themselves for recovery and growth."Felicity Burch, director of innovation and digital at the Confederation of British Industry (CBI), said that against the background of the pandemic, UK business had demonstrated extraordinary levels of adaptability by forging new working methods and routes to market."Much of this innovation has been underpinned by an accelerated move towards new technology," she added."But cash is now tight and this will hold firms back as they now seek solutions to help them grow out of the current crisis, and on to a successful future beyond Covid.“It is clear the government needs to step up the support available for innovation adoption. This will be vital to ensure the UK builds back better, with a more productive, sustainable and green economy in all parts of the country.”

Read more news and views from David Sapsted.

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