New research from SME expert IONOS, has found that while UK SMEs consider digitalisation to be important for the future viability of their business, there are growing concerns around the cost of living crisis, shortage of skilled workers and increased threat of cyberattacks.
IONOS, in partnership with YouGov, polled 1,004 UK SMEs to understand where digitalisation is tracking in terms of business priorities, the factors considered necessary for driving business forward and any key challenges holding it back.
The research found that digitalisation was crucial for future growth – 79 per cent of SMEs in the UK consider digitalisation to be important for the future viability of their business, with the three top benefits including presence and ease of discovery on the internet (78 per cent), creating a modern image (76per cent) and the ability to win new customers (72 per cent).
Many SME’s were faced economic uncertainty with 42 per cent of respondents stating that the declining economy and threat of recession present a high or very high risk to their company, 34per cent identified increasing prices of energy and raw materials as high or very high risk, and 28 per cent stated that inflation is a major barrier to further digitalisation.
The skills shortage continues to impact business – Over a quarter of UK SMEs (29 per cent) said the ongoing shortage of skilled workers poses a high or very high risk for their business and 31per cent of respondents said the lack of know-how represents a major, or very major, barrier to digitalisation efforts. Other barriers include cost (45per cent), lack of time (45 per cent), lack of interest (21per cent) and uncertainty around security and data protection (24per cent).
SMEs said they were not fully protected from cyberattack. While 16 per cent of SMEs believe they are very well protected when it comes to cybersecurity, 31 per cent consider themselves positioned just ‘averagely’ and seven per cent are not protecting themselves.
IONOS CEO Achim Weiß said that those who don’t firmly anchor their business strategy in digitalisation will have a hard time surviving in the market in the future.
“Of course, know-how must be built up first and resources invested, which isn’t always easy, especially for small companies. However, what they gain from digitalisation far outweighs that initial outlay: more security, new business models and greater resilience to crises.”
The survey also explored how UK SMEs compare to their counterparts in France, Germany, Spain and the US. Interestingly, the results found that while a third of UK SMEs are feeling the impact of energy and raw materials increasing in price, the situation is worse in France and Spain where half of SMEs consider the rising costs as high or very high risk to business.
Respondents in all countries rated shortage of skilled workers as high to very high risk for their business, however the US came out highest with 44 per cent.
