Sage, the leader in accounting, financial, HR, and payroll technology for small and medium-sized businesses (SMBs), launched its new Digital Britain: How Small Businesses are turning the tide on tech report today revealing how SMBs are at a critical tech tipping point, representing a significant opportunity to boost the UK’s economy.
Sage commissioned the study, which was launched at a House of Commons event today, of 5,000 SMBs across the country to understand the level of digitalisation and how it is boosting UK economic growth. SMBs are an integral part of the UK’s economy, representing 61% of UK jobs and 52% of UK turnover1.
The research shows SMBs are using technology to cut costs (62%) and better compete for hard-pressed customers (68%). Ninety-two percent of SMBs now depend on technology for business survival but concerns around costs, skills and knowledge are holding them back from going further and faster.
With the right policy framework, Sage’s new report reveals the huge potential for SMBs to create a high-growth digital economy, which could unlock an extra £232 billion for the economy annually.
Sage is calling on big tech companies and government to adopt a pro-tech, pro-enterprise approach and deliver improved financial incentives to encourage greater investment in productivity-enhancing technologies, more data sharing so SMBs can innovate and adequate futureproofing of digital infrastructure.
Steve Hare, CEO, Sage, commented: “Over the past two years, businesses have demonstrated incredible resilience against a backdrop of huge uncertainty. We know there’s been a significant shift in the adoption of technology, with 91% of SMB telling us it was vital in the creation of their business.
“Digitalisation amongst SMBs represents a significant opportunity for the UK in terms of economic contribution, job creation and the upskilling of the workforce, which cannot be overlooked. But we need to help businesses take full advantage of the strength of technology; to do this, the government must prioritise the incentives needed to encourage further investment.”
The top barriers for investment are cost and understanding:
SMBs must prioritise investment in digital tools to successfully mitigate against macroeconomic challenges
Data is an important area of untapped potential
The pandemic prompted a fundamental perception shift across SMBs regarding digital technology
Effective action by government and policy makers could unlock an additional £232 billion in gross value add via digitalisation to the economy
Calls to Government
Based on the Digital Britain findings, Sage has three asks of the government and other big technology companies to help deliver a robust and dynamic digital landscape:
1. Financial Incentives: access to tax incentives and reforming Help to Grow: Digital to scale digital adoption and boost productivity. This includes:
2. Data: encourage more public sector data sharing to provide useful insights for SMEs. This includes:
3. Infrastructure: acting upon and endorsing Mobile UK’s call to fund Digital Champions for local authorities to help coordinate and prioritise digital connectivity.
|Economic contribution of SMB digitalisation - breakdown by region:
|Region||Annual gross value add (GVA) to the economy (£ billion)|
|South East||£32 bn|
|North West||£23 bn|
|East of England||£20 bn|
|West Midlands||£17 bn|
|South West||£16 bn|
|East Midlands||£11 bn|
|North East||£10 bn|
|Northern Ireland||£5 bn|
To access the full report, visit our SME growth, digital adoption and skills section:
In partnership with Strand Partners, Sage has conducted a landmark survey involving over 5,000 SMEs in the UK between 22nd and 29th April 2022. Decision makers at businesses employing fewer than 250 people were targeted. The objective of the survey was to understand the level of digitalisation and how it is boosting growth across the country. This included a national study of SMEs and deep dives into 10 different locations across the country selected to be representative of the UK, including coastal, industrial, urban areas.
Sage exists to knock down barriers so everyone can thrive, starting with the millions of Small and Mid Sized Businesses served by us, our partners and accountants. Customers trust our finance, HR and payroll software to make work and money flow. By digitising business processes and relationships with customers, suppliers, employees, banks and governments, our digital network connects SMBs, removing friction and delivering insights. Knocking down barriers also means we use our time, technology and experience to tackle digital inequality, economic inequality and the climate crisis.