More than a third (38 per cent) of UK small-to-medium enterprises (SMEs) believe they will be out of business in five years if they don’t adapt digitally, new figures have revealed.
The 2016 ‘SME Barometer Research’ commissioned by Exact, a business software developer, found that despite 38 per cent saying they need to adapt to new technologies only two per cent have done something about it.
One of the key highlights from the 2,500 businesses across Europe and the US asked was that 64 per cent of all SMEs face competition from digital rivals. However, only six per cent said they are investing in new technology to keep up and retain market share.
The results come at a time when almost three-quarters (73 per cent) said they are planning to grow.
Gavin Fell, general manager of Exact Cloud Solutions UK, said: “It’s great to see that there’s such a positive outlook among SMEs, but it’s clear that in order to deliver on those ambitions businesses need to adapt to the times. Digitalisation is going to be key to ensuring you are not only efficient, but remain competitive in today’s highly challenging environment.”
More than half (56 per cent) of British SME leaders said they are now exploring new business models.
The main focus areas of investment businesses are looking at are online sales (30 per cent), partnerships and channel sales (26 per cent) and hiring talent (27 per cent).
The report also found that companies are starting to embrace cloud technologies with 58 per cent of UK businesses now using one or more cloud tools, compared with 47 per cent last year.
Exact chief executive Erik van der Meijden said: “The use of technology to deepen business insight means that the wider SME economy is entering a new period of rapid growth and efficiency. As customer demands become ever more stringent, we are seeing entrepreneurial businesses taking advantage of digitalisation to broaden their service offerings. As a result, companies are becoming increasingly agile, adapting to customer demands and market fluctuations in real time.”