The latest Barclays Business Barometer has unveiled fascinating insights into how UK small- and medium-sized enterprises (SMEs) are embracing innovation. According to the study conducted by YouGov on behalf of Barclays, 595 SME leaders were surveyed, representing various regions and industries.
The standout finding is that innovation-focused SMEs are dedicating a substantial 48% of their annual revenue to technology.
This indicates a strategic move by 44% of SMEs to future-proof their businesses and 45% to enhance productivity, acting as a countermeasure against rising interest rates and costs.
Retailers Leading the Charge
Intriguingly, retailers are leading the charge in adopting contemporary technologies to enhance customer outreach and drive growth.
While 66% of retail SMEs are open to embracing new technologies, the past year has already witnessed retailers investing in technology to enhance operations. This includes 18% in data analytics and 12% in artificial intelligence and machine learning.
Further, 41% of retailer SMEs have established dedicated technology teams within their businesses, with an average of 13 people working in these teams.
Positive Growth Trends
In terms of financial growth, positive news emerges as 57% of SMEs reported revenue growth in the last quarter, marking the highest level in 18 months.
An even higher majority (62%) anticipate this trend to continue, expecting revenue increases in the coming year.
Remarkably, retailers are notably confident about growth, with 85% expressing a positive outlook for the next year compared to the past 12 months.
Colin O’Flaherty, head of SME at Barclaycard Payments, highlighted the promising signs in these findings, especially how retail SMEs are adapting to evolving consumer behaviors by adopting emerging technologies. He believes this sets the stage for a brighter year ahead.
Unlocking Economic Potential
In a related context, a 2022 report from Sage revealed that SME growth propelled by technology is directly contributing £216 billion annually to the UK economy.
However, economic modeling suggests an additional £232 billion per year could be unlocked.
Notably, earlier this year, the Hartree Centre, a digital innovation promoter in the UK, allocated £4.5 million to three universities, designating them as regional digital transformation hubs for SMEs.
These hubs aim to offer accessible support to SMEs, enhancing their competitiveness and growth through digital technologies and methods.
The funding aligns with the Hartree National Centre for Digital Innovation program, equipping UK businesses with the necessary skills and knowledge to embrace digital technologies like AI, data analytics, supercomputing, and quantum computing.