More than a third of UK SMEs (34%) believe that technological disruption poses a threat to their business, according to research from Albion Capital.
By contrast, the findings from the Albion Growth Report 2017 reveal that just 22% of SMEs believe technology will create opportunities for their business.
SMEs are prioritising investment in defence of their existing business, with 52% of businesses citing cybersecurity and 50% citing data protection as their most important areas of focus.
Areas of investment which could improve efficiency and competitive differentiation saw less focus, with only 34% of SMEs regarding digital marketing as a top priority, and even fewer businesses investing in cloud infrastructure (25%), automation (15%) and data analytics (16%).
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% vs. 7%).
The research also revealed
- For SMEs that expect their productivity to grow in the next two years, technology is the most cited driver (33%), followed by skill levels (30%) and key personnel (26%)
- Of SMEs operating in industries experiencing technological disruption, 26% believe this will increase in the next year, against 5% that believe it will decrease
- Finance and accounting (47%), medical and health services (47%) and manufacturing (38%) are the sectors most likely to see technological disruption as a threat to their business
- SMEs in London (39%), Scotland (36%) and the East of England (34%) see technological disruption as a threat to their business
- IT and software development/technology are the third largest areas where SMEs lack expertise (17%), behind marketing (26%) and business planning (19%)
Ed Lascelles, Partner at Albion Capital, says: “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.”