London SMEs commit 54% of annual revenue to tech investment – Barclays

Experts respond to new Barclays report showing that businesses see tech such as data analytics and AI as the way to increase productivity and counter rising costs and interest rates. 

As reported in City AM, the report from Barclays shows that 64% of small and medium-sized enterprises (SMEs) are investing in tech to increase productivity and 43% do so to future-proof their company. Yet this compares to 45% across the UK.

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Photo by Nigel Tadyanehondo

Two-thirds of London-based SMEs in the retail sector were keen to embrace new tech, including by establishing specific tech teams. This has largely been driven by the fact that consumers are increasingly shopping online. 

Indeed, Barclays research revealed that 70% of consumers use the internet to guide their shopping decisions, propelling a major surge in online grocery website traffic (54%) and in non-grocery site visits (42%). 

Colin O’Flaherty, Head of SME at Barclaycard Payments, says it is ‘promising’ to see SMEs investing in technology to ‘future-proof’ their operations. ‘Retail SMEs in particular have displayed a remarkable agility in adapting to evolving consumer behaviours by adopting emerging technologies – setting the stage for a brighter year ahead.’ 

Experts have been quick to respond to the Barclays report.  

Sjuul van der Leeuw, CEO of Deployteq, says: ‘Ramping up tech investment should be a top priority for SMEs, particularly with the rise of AI and automation dominating the global business agenda. Despite all the hype, far too many businesses still operate using outdated, manual systems for key functions such as sales and marketing, putting them at risk of falling behind when it comes to meeting customer expectations in the future.’ 

Steven Mooney, CEO of FundMyPitch, adds: ‘While it’s encouraging to hear that SMEs are putting tech investment at the top of the agenda, the reality is that many ambitious companies are still struggling to get access to the investment they need to take their business to the next level. From securing a credible valuation to getting a chance to pitch their proposition to investors, far too many entrepreneurs are missing the big chances that could turbocharge their organisation. This culture has to change if we want to unleash the true potential of our SMEs and create a business culture that backs the next generation, rather than ignoring it.’ 

Josh Boer, Director at tech consultancy VeUP, says: ‘It’s encouraging to see SMEs put tech investment at the very heart of their business strategy, particularly against the backdrop of stubborn inflation and soaring interest rates. The UK is home to some of the most exciting and incredible businesses on the planet, yet many are still way behind when it comes to getting access to funding and scaling up through cloud technologies. By prioritising investment in tech, the next generation of SMEs can grow rapidly, creating jobs and boosting the value of UK PLC.’

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