More SMEs feel threatened by technology rather than emboldened, says report

By contrast, the findings from the Albion Growth Report 2017 reveal that just one in five SMEs (22 per cent) believe technology will create opportunities for their business.

The report indicates that SMEs are prioritising investment in defence of their existing business, with half of businesses citing cybersecurity (52 per cent) and data protection (50 per cent) as their most important areas of focus. Areas of investment which could improve efficiency and competitive differentiation saw less focus, with only 34 per cent of SMEs regarding digital marketing as a top priority, and even fewer businesses investing in cloud infrastructure (25 per cent), automation (15 per cent) and data analytics (16 per cent).

These insights come at a time when IT budgets are increasing; more than four times as many SMEs with IT budgets for this financial year expect to increase them next year, as opposed to those who believe their budget will shrink (29 per cent vs. 7 per cent).

The research also reveals:

·      For SMEs that expect their productivity to grow in the next two years, technology is the most cited driver (33 per cent), followed by skill levels (30 per cent) and key personnel (26 per cent)
·      Of SMEs operating in industries experiencing technological disruption, 26 per cent believe this will increase in the next year, against 5 per cent that believe it will decrease
·      Finance and accounting (47 per cent), medical and health services (47 per cent) and manufacturing (38 per cent) are the sectors most likely to see technological disruption as a threat to their business
·      SMEs in London (39 per cent), Scotland (36 per cent) and the East of England (34 per cent) see technological disruption as a threat to their business
·      IT and software development/technology are the third largest areas where SMEs lack expertise (17 per cent), behind marketing (26 per cent) and business planning (19 per cent)

Ed Lascelles, partner at Albion Capital said, “We are in the midst of unprecedented technological change and agile, digitally native SMEs are responsible for much of the current innovation transforming business. While early stage technology firms have made big leaps forward with offerings providing advanced, data-driven insights, our research shows SMEs from across a broader range of sectors may be struggling to access these tools.

“It is not surprising, given the challenges posed by disruption and the pervasive nature of cyber threats, that SMEs are prioritising their IT defences. But the prevalence of big data machine learning solutions will dramatically increase and SMEs must ensure they are equipped with the latest technology to remain competitive in the data driven economy. As revenue generating technologies develop and become more affordable, SMEs must embrace the opportunities on offer.”