Be the Business white paper shows the barriers to digital adoption.

16 Sep 2020 04:27 PM

New research from Be the Business identifies key actions to support SMEs and tech providers to boost digital adoption.

Recently (15 September 2020), Be the Business, a joint government and industry funded organisation aimed at helping small and medium-sized enterprises (SMEs) boost their productivity, released a new white paper, The UK’s Technology Moment – Why 2020 Can Be the Year That Changed Our Trajectory on Tech, which identifies the challenges for SMEs when it comes to digital adoption, the barriers that technology providers face when serving SMEs, and what actions government, suppliers, and business support organisations can take to boost digital tech uptake.

The effective use of digital technologies can spur productivity improvements of up to 25% and create wider economic growth, helping with the COVID-19 recovery effort. The COVID-19 pandemic has created a once in a generation opportunity and catalyst to greatly accelerate the uptake of digital technologies by firms of all sizes across the whole economy.

As firms and individuals have rapidly adapted to remote working, e-commerce, and other digital solutions to maintain business continuity and stay in touch with friends and family, this is our chance to deepen this relationship with tech and encourage businesses to use these newfound tools to innovate and revolutionise their business models.

The white paper sets out the key barriers to greater tech adoption as well as evidence-based actions to overcome those barriers and seize the opportunities digital adoption can bring.

Barriers SMEs Face to Adopting Digital Technologies:

• Products are often built for large enterprises rather than SMEs, and thus can be difficult to use. 
• Digital adoption appears to be difficult and expensive, especially in a time of COVID-19 and limited finances. 
• Adopting new systems or products is risky, with concerns about extra costs, data loss, and additional business downtime. 
• A lack of digital skills and expertise in SME leaders, making it difficult to identify needs and manage the transition period and implementation. 
• Employee resistance to learning new systems.

Barriers for Technology Providers:

• Lack of incentives to develop products specifically for the SME market. 
• The high cost of customer acquisition. 
• Difficult to create a self-service model at scale for SMEs.

Taken together, these barriers present a significant market failure that needs to be overcome to further accelerate and deepen the digital adoption that the UK has seen throughout the COVID-19 pandemic. Various actors, from government to supplies and business support organisations, can do more to help SMEs boost productivity through the adoption of digital technologies.

Key Actions to Take:

• Better independent resources to help SMEs navigate the marketplace – a “moneysaving expert” for digital adoption. 
• Training and capacity building for business owners and leaders to build the skills and knowledge needed to effectively buy and implement technologies for their businesses. 
• The development of tech products for the specific use cases of SMEs, done on a sector by sector basis to identify and provide the services SMEs are looking for. 
• Greater incentivisation of digital adoption by government, in the form of R&D credits or other instruments to help with cost issues. 
• Government should put digital tech adoption and diffusion throughout every sector of the economy in its reforms of the business support ecosystem.

The findings of Be the Business are fascinating, and further demonstrate the value of digital tech to the economy, especially in these times. They also make a strong case for specific key actions to ease the digital transformation process, on both the supply and demand-side.

techUK welcomes these findings and urges both government and industry to act swiftly and comprehensively to ensure the digital transformation progress made thus far during the COVID-19 pandemic is not lost. 

“Research from techUK has shown that 71% of managers and decisionmakers believe that businesses will become more dependent on digital technologies because of the pandemic.1 Therefore, enabling SMEs and overcoming the barriers both they and suppliers face to adopting new technology will be vital to ensuring that the UK seizes the opportunity that tech can bring to boost productivity, expand markets, and create innovative new products and services.

“The white paper by Be the Business provides a thorough analysis of the challenges as well as evidence-based solutions to ensure the UK seizes its technology moment.

“We must act now to ensure that this moment is not lost. This will mean supporting SMEs and their supplies, but also ensuring that we have the digital infrastructure and digital skills to take full advantage of the benefits tech can bring to help the UK build back better.”