Atlanta, September 26, 2019 – Sage, the market leader in cloud business management solutions, today released the findings from its We Power the Nation survey, which revealed that poor productivity cost the U.S. economy $346 billion over the past 12 months. The survey, which polled 3,000 small and medium businesses around the world, investigates productivity loss and how future investment in technology and digitization impact trade, people and productivity – three success factors at the core of business today.
Despite advancements in technology, the administrative burden on businesses of all sizes persists; key findings from the report reveal:
While businesses are recognizing the financial impact of administrative tasks, and are taking action to reduce the burden, the U.S. was among the least likely to invest in digital skills in 2019, attributing the reason for withholding investment as a “lack of applicability to business strategies.” According to the research, only 36% of businesses consider digital skills a priority investment, despite businesses citing net connectivity and artificial intelligence as the most significant technology to affect the future of trade in their sectors.
“The global productivity deficit continues to grow, yet investment in digital skills can help remedy the issue,” said Nancy Harris, Managing Director, Sage North America. “Our research reveals that not only does it help from a revenue perspective, but it can also improve employee morale; 48% of medium-sized businesses and 53% of large-sized businesses boasted a more productive working environment as a result.”
That being said, many companies also believe that digital skills training should be supported not only by a corporation’s internal team, but by the government as well. Twenty three percent of businesses think the government should provide free digital skills training and 31% believe tax breaks would better support the improvement of their digital skills – a possible indicator that a broader push for this kind of government intervention could be on the horizon.
“As businesses around the world continue to face an increasingly competitive marketplace, the need for digital tools and skills has never been greater. As we speak to our customers, they resoundingly agree that a combination of investment and governmental programs can help solve this productivity puzzle,” Harris added.
To read more about Sage’s We Power the Nation survey, click here.
This research has been produced by Sage Group plc (“The Group”). All primary research survey figures, unless otherwise stated, are from YouGov or are calculated by The Group using figures from YouGov.
To establish time lost, Sage commissioned YouGov to run a survey sample size of 1,466 small and medium business decision makers ensuring a minimum sample size of 100+ in each of the 12 countries analyzed. Fieldwork was undertaken between 19th March and 5th April 2019 and carried out online. We summarized findings as a single statistic for SME productivity, based on an average of business time spent on administrative tasks. This is calculated by assigning a mid-point to each of the answer bands for both business size and days spent by the business on administrative tasks e.g. 7.5 for the band 5-10.
For tracking the cost of lost productivity in 2018, the implied value has been calculated based on 2019 IMF data with changes vs 2018 extrapolated over 12-month changes when compared to the 2018 ‘Sweating the Small Stuff’ valuations. The research has assumed a linear time-bound impact using GDP growth figures taken from the IMF’s World Economic Outlook (April 2019).
While a compound effect of underinvestment in technology may cause the costs to accelerate through the year, adoption of productivity-enhancing tools for business may counteract this effect.
Sage is the global market leader for technology that helps businesses of all sizes manage everything from money to people – whether they’re a start-up, scale-up or enterprise. We do this through Sage Business Cloud - the one and only business management solution that customers will ever need, comprising Accounting, Sage Intacct, Enterprise Management, People & Payroll and Payments & Banking.