Digital innovation ‘more valuable’ to mid-sized firms
Written by Chris Lemmon
A survey of 5,000 UK SMEs conducted by ICM on behalf of Business Banking Insight (BBI) has found that mid-sized businesses – those with 50-249 employees – have made greater savings in their businesses from investing in digital innovation than smaller firms.
According to the research, 39 per cent of mid-sized businesses believed that digital innovation had led to real cost savings compared with a quarter (25 per cent) of sole traders.
Those companies who traded internationally also tended to be more positive about digital innovation, with 36 per cent reporting cost saving results, compared to the 25 per cent of those companies who did not trade across borders.
Information and communications companies were leading the way in terms of investment in digital capabilities, with 30 per cent of companies investing a greater percentage of their turnover than the average SME (10 per cent). Conversely, mining, energy, water and waste firms were reinvesting the least of their turnover in digital capabilities, with fewer than 5 per cent of firms investing more than the SME average.
The mining, energy, water and waste sector registered the lowest number of companies to have saved money due to digital innovation (24 per cent), in comparison to the other SMEs (38 per cent). Ten per cent of SMEs in wholesale, retail and vehicle repair actually stated the opposite, claiming digital innovation had raised their overall costs.
Mike Cherry, FSB national policy director and BBI spokesperson, 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.”