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techUK calls on government to prioritise SME digitisation

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techUK has unveiled a new report highlighting the immense potential for growth and productivity through increased digital adoption among UK SMEs.

The report, ‘Small Enterprises, Big Impact’, claims that the UK still suffers from a productivity gap. Despite SMEs making up 99.9% of UK companies and representing some of the country’s most resilient businesses, over a quarter of UK SMEs still do not use basic digital tools.

The report warns that the lack of digitisation resources could keep the UK from reaching its ambitions to become the fastest-growing economy in the G7.

Last week techUK wrote to the Secretary of State for Science, Innovation and Technology, Peter Kyle MP, and the Secretary of State for Business and Trade, Jonathan Reynolds MP, calling on the government to boost growth through better SME digitisation support.

With the UK being ranked fourth on the Global Innovation Index 2023, techUK suggests that by prioritising digital adoption for SMEs, it can harness its existing strengths to drive future growth, innovation and sustainability. 

Enhanced digital adoption could add an impressive £232 billion to the UK economy, while also preparing businesses to thrive in an AI-driven future.

Artificial intelligence is projected to boost UK GDP and bring huge benefits for UK businesses. AI is not only a tool exclusive to or digitally intensive businesses, but an enabler of productivity and competitiveness for all businesses. 

However, it will first be deployed through updates to currently in use business software, meaning that if UK businesses are behind on basic digital adoption, they will soon be behind on AI adoption as well. Enhancing SME digitisation support is crucial for securing our international competitiveness and fully capitalising on the economic opportunities that AI offers.

This comes as it emerges that SMEs face some common challenges to digitisation, including costs and a lack of skills to help businesses through the adoption stage of new technologies, including AI.

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In light of what it sees as the previous government’s shortcomings with initiatives like Help to Grow: Digital, techUK is calling on the new government to seize the opportunity to elevate the UK’s position in the global digital landscape. 

Emphasising the crucial role of digital technology, the report underscores how strategic action can unlock substantial economic benefits and secure the UK’s competitive edge.

In the report, techUK provides a 12-month roadmap for government to incentivise SME digital adoption. Key areas of focus include coordinating a cross-departmental and industry led Forum and appointing a Minister responsible for digitisation across the economy; delivering a comprehensive digital adoption plan with clearly defined targets by 2030, focusing on the right underpinning infrastructure, regulation and skills needed to succeed; and expanding the Made Smarter Adoption programme to all sectors of the economy.

“Digital adoption is not just a growth opportunity – it’s essential for UK businesses to stay competitive,” said Neil Ross, associate director for policy at techUK. “However, the widespread uptake of digital tech by SMEs is an area where the UK particularly struggles. 

“Now, because of advancements in technology, if you are behind on digital adoption, you are also behind on AI adoption. By setting out a clear strategy for digitisation by 2030, with a named accountable Minister and backed by the right policies, the UK can turn this around, ensuring our businesses keep the pace in a hypercompetitive world.

“Our report sets out practical and evidence-based steps for the Government to take and we look forward to working with the new government to embrace this growth opportunity and reap the benefits the uptake of digital technology can bring to UK SMEs.”

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