A survey of 5,000 UK small to medium enterprises (SMEs) conducted by ICM on behalf of the Business Banking Insight (BBI), an initiative supported by the British Chambers of Commerce (BCC) and the Federation of Small Businesses (FSB), shows mid-sized businesses – those with between 50-249 employees – have seen greater savings in their business from investing in digital innovation than smaller firms.
Two fifths of mid-sized firms (39%) believe digital innovation has led to real cost savings, compared with just a quarter (25%) of sole traders.
Companies working internationally tend to be more positive about digital innovation. Well over a third (36%) of international companies said it has resulted in cost savings, compared to just a quarter (25%) of firms who do not trade across borders.
On average, only one in 10 SMEs invest over 10% of their turnover in their digital capabilities. However, Information and Communication companies, perhaps by the very nature of their specialism, invest the most – with 30% of firms investing in excess of this.
At the other end of the spectrum sit Mining, Energy, Water and Waste firms. In this sector fewer than 5% of firms invest over 10% of their turnover in their digital capabilities.
Professional, Scientific and Technical firms have seen the greatest benefit from digital innovation. 38% of SMEs in this sector think that digital innovation has saved them money, compared with just 24% of those working in Mining, Energy, Water and Waste. Moreover, one in 10 (10%) of SMEs in Wholesale, Retail and Vehicle Repair believe digital innovation has actually raised costs overall.
Mike Cherry, FSB National Policy Director and spokesperson for the BBI, said: “While most businesses appear to be investing comparable levels of turnover into digital innovations, larger firms seem to be getting a better return on their investment.
“It’s clear that many smaller businesses understand the potential benefits of investing in new technology, but they may need greater advice and support to choose the solutions that best match their individual business needs. This presents banks with an opportunity to improve the support on offer to their smaller business customers, using their unique position to share good practice and support effective investment.”
John Longworth, BCC Director General and spokesperson for the BBI, added: “In order to encourage digital advances and capabilities, we would like to see more firms trusting in the benefits of this investment and perhaps looking to their banks for advice and support in this area. The BBI’s findings demonstrate the areas in which different SMEs have received the most support from their banks, which may be of assistance to those considering how best to harness digital developments for their business.”
For more information please visit the BBI Website https://www.businessbankinginsight.co.uk/