The pandemic has sparked a longer-term shift to go digital among UK businesses, with three-quarters of SME leaders planning to invest an average of £85,000 in new technology and systems over the next 12 months.
According to new research by Nucleus Commercial Finance, expected digital spend climbs to £125,000 among younger, more tech-savvy SME leaders (those aged 18-34), compared to just £17,000 for older business leaders (those aged 55+), suggesting a generational divide among SMEs over their readiness for the new digital economy.
These findings come on the back of SMEs already investing significantly in new technology in response to the pandemic. 46% of respondents have built or expanded their online offerings, while 38% have moved operations to the cloud and 36% have invested in AI or data analytics.
Looking ahead, top tech priorities for business leaders over the next year include improving their company website (29%) and spending on digital advertising (19%). This reflects a desire to reach more customers, above improving remote working systems (18%) and investing in data analytics (17%).
The plans for increased investment in technology arrive at a critical time for many SME leaders as 19% feel their business is not well prepared to operate in a digital world. This increases for older business owners (those aged 55+) with 25% stating they are not prepared for the transition to digital. On the other hand, 85% of young business leaders (aged 18-34 years old) feel well prepared.
Chirag Shah, CEO, Nucleus Commercial Finance comments: “Many SMEs were still bricks and mortar businesses when Covid-19 struck, and so quickly adapting and setting up digital solutions presented a far greater challenge than faced by most large organisations. Businesses quickly adapted, setting up online offerings to continue to cater to their audiences, but they now see a major opportunity in a digital world and plan to invest significantly in the next 12 months.
“To ensure SMEs can build and implement their ambitious digital strategies, the Government and the lending industry needs to continue to provide support for SMEs and help them bounce back stronger in an accelerated digital age. Access to fast and flexible finance is key to enabling UK SMEs to invest in their futures and stay ahead of the tech curve.”