Sage highlights that untapped tech adoption could boost the EU economy by €628 billion annually

Sage, the leader in accounting, finance, HR and payroll technology for small and medium sized enterprises (SMEs), is calling on policymakers to grasp the EU’s opportunity to be digital leader by 2030, with SMEs at the helm.

Sage’s report, Empowering SMEs in The Digital Decade: the 600 billion EUR opportunity, published today, contains policy proposals for ensuring that the EU’s ambitious Digital Decade programme - which sets out digitalisation targets to be achieved by 2030 – stays on course. This follows speculation1 that the EU will not reach its goals, despite a range of new initiatives intended to bolster the use of tech in the region.

Sage’s report sets out recommendations for keeping this critical mission on track, all of which ladder back to the need for Europe’s 25 million SMEs – which represent 99% of all businesses and two thirds of all private sector jobs - to be placed at the centre of the EU’s digital transition.

The recommendations include the mandating of e-invoicing – which would create an enabling environment for SMEs to get paid on time and enjoy greater productivity – as well as the uptake of responsible AI and the introduction of a Digital ID.

According to research launched alongside the report, €628 billion in economic growth could be unlocked per annum in the EU, if SMEs which are currently struggling to adopt digital technologies increase their adoption rates to the European average.

Highlights of research findings (15,000 SMEs across 15 European markets were surveyed):

• Over three quarters (85%) of SMEs said that digital tech is crucial to their growth plans, and a resounding 84% pinpoint technology as instrumental to enhanced efficiency and cost management. There’s also a sense of optimism towards emerging technologies - a third (34%) have adopted Artificial Intelligence (AI), for instance, marking a substantial rise from just 8% in 2021. Separately, 80% are confident that the introduction of a digital ID will benefit their business.
• However, despite seeing high returns on investments from tech and digital confidence, barriers remain. On average, EU SMEs have only amplified their tech investments by +16% over the past year. Financial constraints further reduce this figure to +9% for some businesses, highlighting the pressing need for financial support. Furthermore, late payments are a significant obstacle to SMEs, with cashflow and liquidity problems second only to rising costs as a barrier to growth.
• With the right policy framework, the research reveals the huge potential for SMEs to create a high-growth digital economy. Raising the pace of digital transformation for slower-to-adopt SMEs could contribute €628 billion to the European economy.

Download 'Empowering SMEs in the Digital Decade The €628 Billion Opportunity' today.

¹ 2023 Report on the state of the Digital Decade | Shaping Europe’s digital future (europa.eu)