SME leaders plan to invest £85,000 on average in new digital technologies and systems over the next 12 months, indicating that the Covid-19 pandemic has sparked a longer-term shift to digital among UK businesses, according to new research by Nucleus Commercial Finance.
Expected digital spend climbs to £125,000 among younger, more tech-savvy SME leaders (those aged 18-34), compared to just £17,000 for older business leaders (those aged 55+), suggesting a generational divide among SMEs over their readiness for the new digital economy.
These findings come on the back of SMEs already investing significantly in new technology in response to the pandemic. Nearly half (46%) of respondents have built or expanded their online offerings, while 38% have moved operations to the cloud and 36% have invested in AI or data analytics.
Looking ahead, top tech priorities for business leaders over the next year, post-pandemic include improving their company website (29%) and spending on digital advertising (19%). This reflects a desire to reach more customers, above improving remote working systems (18%) and investing in data analytics (17%).
The plans for increased investment in technology arrive at a critical time for many SME leaders as one in five (19%) feel their business is not well prepared to operate in a digital world. This increases for older business owners (those aged 55+) with a quarter (25%) stating they are not prepared for the transition to digital. On the other hand, over four-fifths (85%) of young business leaders (aged 18-34 years old) feel well prepared.
Chirag Shah, CEO, Nucleus Commercial Finance comments: “Many SMEs were still bricks and mortar businesses when Covid-19 struck, and so quickly adapting and setting up digital solutions presented a far greater challenge than faced by most large organisations. Businesses quickly adapted, setting up online offerings to continue to cater to their audiences, but they now see a major opportunity in a digital world and plan to invest significantly in the next 12 months.
“To ensure SMEs can build and implement their ambitious digital strategies, the Government and the lending industry needs to continue to provide support for SMEs and help them bounce back stronger in an accelerated digital age. Access to fast and flexible finance is key to enabling UK SMEs to invest in their futures and stay ahead of the tech curve.”
Nucleus Commercial Finance is a true bank alternative, offering a range of business finance products. Nucleus combines award-winning technology with the flexibility of an alternative lender alongside the stability and product range of bank finance, providing market-leading secured and unsecured loans, business cash advances and a range of asset-based lending products. Nucleus has supported businesses with £2bn+ of lending since its inception.