London’s SMEs are allocating over half of their annual revenue to technology investments, according to a Barclays report.
In the capital, 64 per cent of SMEs are turning to technology investments to increase productivity and 43 per cent are doing so to future-proof their company, the report claimed. This is compared to 45 per cent of SMEs UK-wide.
The data revealed London companies are directing 54 per cent of their annual revenue on average to technology investments, such as data analytics and artificial intelligence tools, in a bid to increase productivity.
The retail sector saw the biggest take-up in technology investment, with two-thirds of SMEs in the capital doing so.
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“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,” head of SME at Barclaycard Payments, Colin O’Flaherty said.
Much of the increase in tech spending is driven by the fact consumers are predominantly shopping online.
The study found that 70 per cent of consumers use the internet to guide their shopping decisions, driving a surge in online grocery website traffic (54 per cent) and in non-grocery site visits (42 per cent).
“Despite all the hype, far too many businesses still operate using outdated, manual systems for key functions such as sales and marketing, putting them at risk of falling behind when it comes to meeting customer expectations in the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.”
Josh Boer, director at tech consultancy VeUP, added: “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… 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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