UK SMEs Set To Ramp Up Digital Spending

Small and medium-sized enterprises (SMEs) in the United Kingdom will dramatically increase investment in their digital capabilities over the next two years.

So says new research from Santander Corporate & Commercial, which predicted that SMEs will invest a whopping £53 billion by 2017.

And it seems that the bulk of this investment will be focused on their websites rather than mobile technologies.

Growing Investment

The research is based on a survey of SMEs. It found that the average firm has committed £33,212 to digital investment in the past year. But over the next two years, this digital investment will increase by an additional £28,224.

The research also revealed how important a digital presence is to many firm. It found that 8 percent of surveyed companies spent  more than £100,000 on digital in the last year. And 6 percent said they plan to increase their investment by more than £100,000 in the future.

The biggest SME spenders on digital are found within the financial services and IT sectors. On average, IT companies have invested £46,429 in the last year, while financial services companies have each invested £49,500. Over the next two years, IT firms typically plan to increase this by £43,962, while financial services companies expect to spend £42,083 more.

And if the research is broken down into regions, London is the clear winner, with firms in the capital set to invest the most at £42,925, which is significantly ahead of businesses in the Midlands in second place at £31,531.

The region that will invest the least are SMEs in the South West, where they will invest just £19,500.

“Investment in digital capabilities can significantly enhance business growth opportunities for small and medium-sized businesses,” said Stephen Dury, MD at SME markets & business development, Santander Corporate & Commercial.

“Just having a functional website can have a dramatic impact on a firm’s visibility and connectivity with customers and other stakeholders,” Dury added. “However, while it is great to see that many firms are focused on this, the concern is that a significant number are still failing to invest effectively and are therefore missing out on these opportunities.”

And it seems that despite the popularity of smartphones and tablets, SME digital spending on mobile is not the main priority. SME owners have said that their top digital priority are traditional websites.

Indeed, nearly three-fifths (56 percent) of firms said their websites are making their businesses more successful. However, one-sixth (16 percent) of SMEs say they do not have a website at all, while just 34 percent can currently accept payments online, and only 13 percent host a foreign-language version of their website.

Skills Gap?

In February a new European Commission report found that the UK has one of the leading digital economies in Europe, but it still has some way to go in order to top the pile.

Denmark came out on top, followed by Sweden, The Netherlands, Finland and Belgium, with Romania in last place.

Meanwhile a study by Johnston Press and Buzzboard late last year found many British SMEs are still not ‘digital ready’. Apparently 71 percent said they are incapable of handling online consumers, which could result in them missing out on millions of pounds in revenues every year.

And there are concerns about digital skills, which whilst improving across the EU, still have some way to go.

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