New research shows that the UK economy could benefit from a £79 billion boost in the next 12 months if SMEs could prioritise investment in new technology.

This could in turn generate additional Exchequer receipts (through taxes on income and expenditure) worth over £25 billion per annum over a full year, more than the £22 billion currently outlined as necessary by the Chancellor to fill the “black hole” in public sector finances.

The new research, commissioned by Three Business and based on economic analysis and You Gov polling of over 2,000 SMEs, found two in five of SME business leaders say productivity would increase with investments in AI and other digital technologies, and a further 43% feel it would allow them to become faster and more efficient.

Despite the clear benefits of tech investment, 42% of SMEs are concerned that difficulties onboarding new technologies will impact their business’s ability to grow in future, whilst more than half (55%) say that the costs associated with this are concerning.

Over two in five (42%) said they are unable to prioritise investment in tech, and a similar amount (43%) is concerned that they’re failing to capitalise on emerging technologies.

In addition, almost all SMEs said a reliable (97%) and high speed (94%) internet connection was important for their business.

These were both deemed more important than having good local transport links (64%), sufficient office space (69%) and access to skilled labour (83%).

But more than half (53%) of these businesses said poor mobile in their area could affect their ability to grow.

Yet, current connectivity capabilities are working against businesses in the UK, with 5G availability and download speeds lagging significantly compared to Europe.

According to recent research, the UK came 22nd out of 25 European countries, with London coming last in a list of 10 European cities. Additionally, the UK’s general network speed is also poor in comparison to Europe, ranking 26th out of 31.

Mike Tomlinson from Three Business said: “Technology is a key driver and enabler of growth for businesses, who are at the heart of the UK economy.

“This was recognised in the Government’s long term Industrial Strategy, published last week, which outlined a focus on supporting businesses who can deliver growth in the tech sector, as well as aiding the adoption of technologies that can aid boost the productivity of our businesses. 

“At the same time, through the combination of Vodafone UK and Three UK, we would be able to invest £11bn in growing the UK’s mobile infrastructure and create a best-in-class 5G network which would further enable economic growth and innovation in all nations and regions.”

Anthony Impey, chief executive at Be the Business said: “Without doubt, small and midsize businesses are the powerhouse of the UK economy and have a key role in the new government’s mission to boost growth and opportunity in every part of the country.

"It’s important to also recognise that the leaders of these businesses are some of the hardest working people, often putting in 12 hours a day, six or seven days a week. So, using new technologies including Generative AI is essential if these businesses to become more productive and have the capacity to innovate and grow.”