Sage’s annual survey of almost 12,000 business leaders globally - Small Business, Big Opportunity - finds that despite a challenging 2022, where rising costs and pressures on revenue and cash flow impacted profitability, UK small- and mid-sized businesses (SMBs) are significantly more optimistic about their prospects than this time last year.
Adoption of technology is critical to business confidence, but UK SMBs may suffer from low investment commitments
The findings reveal that UK SMBs feel the most confident of any surveyed country about their business success, with 40% predicting that they will feel ‘very confident’ about the success of their business at the end of 2023 compared to 34% globally. Over a fifth (22%) expect a decrease in their costs, while 46% of UK SMBs expect an increase in revenue, with close to half (49%) expecting to increase their workforce.
Technology is seen as a key factor in future success, with 92% planning to maintain or increase their tech investment, and UK SMBs also more likely to adopt emerging technologies than any other country, such as 5G (28%), AI (16%) and the Metaverse (16%) over the next three years.
However, UK SMBs anticipate increasing their technology investment by only 13%, below the European average of 18%, citing a lack of budget and difficulty in understanding the best tech options as the top barriers. Access to talent also remains a critical concern, with over a third of UK SMBs (39%) being not satisfied with their ability to recruit talent.
Driving resilience through increased productivity
In 2022, high costs have presented a significant barrier for many UK SMBs, with 40% reporting a cost increase of over 10%. However, UK SMBs report working more efficiently to overcome challenges; over three-quarters report being satisfied with current productivity levels and 28% report that this helped them overcome barriers in 2022.
Sage Group CEO, Steve Hare, said: “SMBs are the backbone of the UK economy and too commonly overlooked. They have emerged resilient from a difficult 2022 and have ambitious goals of scaling their businesses. The government and the private sector must now work together to make this possible.
“The government has rightly set out an ambitious vision for the digitalisation of the UK economy. We see strong appetite among SMBs for an acceleration of investment and adoption of new tech solutions, but the UK lags behind in the level of tech investment they anticipate committing.
“To support SMBs and drive economic growth in the UK, the government needs to take a bolder approach towards tax, to incentivise digital investment. This is essential for millions of SMBs to have the resources they need to compete on a global scale and to make the UK an advanced digital economy.”
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