Unlocking SME digital investment will be critical in helping businesses remain resilient in the face of future COVID-19 uncertainty, the latest research from Sage has found.
According to the study, realising the current appetite for tech investment could also deliver major benefits to the UK economy, driving up to £145 billion in economic output as a result of improved productivity.
It could also deliver up to £325 billion additional SME revenue globally, as well as support up to 2.7 million jobs across the UK, Sage revealed.
"We are on the brink of a once-in-a-generation digital revolution among SMEs – one that will power job creation and growth at a time when its most needed, as well as helping to finally crack the UK’s long-standing productivity puzzle," commented Sage CEO Steve Hare.
"But the UK stands to lose out on these massive gains if we do not encourage this investment now."
During the current pandemic, 73% of businesses have turned to technology to remain functional, marking a huge rise from the 17% that were planning investment before the crisis.
There's now a greater need for digitisation, the study found, with 43% of SMEs saying that the pandemic has made technology investment more urgent to remain competitive and boost productivity.
Around two-thirds of SMEs (67%) also expressed a desire to invest more in tech in the future, while 72% believe that further investment into key tech areas would deliver performance improvements to aid recovery.
However, the pandemic has dramatically hampered businesses' capacity to invest, with more than three quarters saying that financial constraints are preventing the necessary investment.
Removing this hurdle could bring about a much-needed boost to the UK economy, Sage says, and almost nine in 10 believe incentives such as digital vouchers, digital adoption grants and tax benefits would directly benefit the performance of their business.
According to additional research from Capital Economics, policies such as these could deliver an incremental £50 billion in revenue annually and £20 billion in economic output from improved productivity – ultimately supporting around 400,000 jobs.
Sage found that SMEs believe they need to invest £10,000 into technology to best position themselves for recovery and growth, which they estimate will help them achieve an average +15% increase in monthly revenue and a +14% increase in monthly profits.
"Currently, businesses do not believe they can deliver even half of the technology investment they need in order to position themselves for recovery and growth,” Hare added. "So, in addition to targeted and local support, SMEs in all sectors across the UK need a strong message from the government that they can invest in technology with confidence.
"Our research shows that policy incentives like vouchers and tax breaks would pay for themselves within a year, driving a tech-led recovery that will underpin greater resilience, productivity, and job creation for decades to come."
