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DIGITAL NEWSROOM

What the Chancellor must do to support SMBs tomorrow...

Sage CEO Steve Hare discusses ways the Chancellor can support SMBs.

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"By investing more in digital tools, our research shows that SMBs can unlock £232bn for the UK economy."

16 NOV 2022

SMBs are the lifeblood of the UK economy. Supporting their success and resilience is critical if we are to quickly regain economic stability and return to growth. So, this needs to be a budget built with an ambitious end goal– ensuring the UK is the best place to start and build a business in the world, so we can accelerate growth, resilience and innovation.

A progressive set of policies and incentives on technology adoption for small businesses will be essential and this is an opportunity for the Chancellor to set the agenda for a nation of entrepreneurs. These businesses are already turning to technology to unlock productivity and streamline their operations. Our insight shows that eight out of ten SMBs now depend on technology to launch, survive, and expand – and I hear this for myself as I meet with customers every week. Our results today are proof that over the past year, as we’ve grown Sage’s recurring revenue by 9%, an increasing number of SMBs are choosing our technology amongst others.

This trend is only going to grow as more accountants and business owners experience first-hand the benefits of cloud-based technologies to run their companies, and as every SMB looks for ways to do more with less.

Accountants (and I am proud to be one myself) are often the most insightful economic commentators. They tell us that digital tools are helping SMBs to get better visibility of their cashflow and manage it with more confidence. They’re automating processes like billing and payment, so they’re getting paid faster and freeing up time to focus on running their businesses and remaining resilient during these challenging times.

But SMB tech adoption isn’t just about the clear benefits it brings to each business; it’s also critically important to the future of our economy as a whole. As we know from experience, SMBs are loyal employers. Following the last downturn, they were the fastest to rebound and were responsible for creating two thirds of new jobs. By investing more in digital tools, our research shows that SMBs can unlock £232bn for the UK economy.

Yet despite these clear benefits, small companies continue to face barriers to further tech adoption, including a lack of capital, time and expertise. So, tomorrow, we will be listening out for anything which creates complexity, cost or bureaucracy for SMBs, but we will also be hoping for creative incentives that cut through the barriers to starting or building a digitally-enabled business. 

For example:

  • Improved tech adoption incentives, such as Help to Grow, so SMBs can be more efficient, productive and resilient
  • Action to make it easier for businesses to do business, to get finance, and get value from their data by fast forwarding the government’s digital policy agenda – with digital ID, open finance, reform to GDPR, and regained momentum on vital programmes such as #MakingTaxDigital.
  • Tax restructuring that would help SMBs to invest in technology for their businesses.
  • Steps to make it easier for SMBs to navigate new policies and initiatives brought in by Government, communicating better so they can easily understand and assess the benefits to them.

With measures such as these - and if policy makers and industry work together - we will maintain momentum on SMB tech investment so that our economy can benefit.

We need a strong and ambitious vision for a modern, digital economy so businesses can continue to weather the current economic challenges, grow and scale. Through our conversations with millions of SMBs around the world, we know they are quick to adapt to adversity and spot opportunity. The big question is whether the UK’s small businesses will see this spirit matched by an Autumn statement with ambition at its heart. 

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