Small and midsized businesses invested in new technology to survive the height of the pandemic, and as the global economy moves into its next phase, these activities are projected to grow, sometimes significantly, according to a recent study from Sage.
The Sage study, which surveyed more than 13,000 businesses across eleven countries, found that small and medium-sized entities were facing a number of challenges, including being unable to operate normally due to the pandemic, rising costs, reduced demand, and supply chain problems, among others. However, about 59% of respondents still said they were “coping well” with these issues; of those who said they felt confident about their prospects going forward, over a quarter (28%), cited new technology investments as a reason.
The importance of technology is even more apparent when considering a group the study called “Adapters” — those who used more strategies and external resources than most to overcome challenges, to the point where they have greater levels of confidence than average. Within this group, 37% cited “Adopting more new technology to sell more and stay connected with their customers” as a change they made to cope with issues negatively affecting their business.
With this in mind, many SMEs are looking to make further investments in their technology infrastructure over the next year. About 51% of respondents said they plan to increase their spending in this area beyond what they’ve already spent last year, either somewhat or significantly.
“With a significant proportion of SMB decision-makers expecting to further increase their investment in technology, there is overwhelming agreement that this trend is here to stay. Technology played a key role in helping businesses globally overcome the barriers they were facing — therefore, it is perhaps unsurprising that most SMB decision-makers think the pandemic has permanently increased how reliant their business is on technology,” said the paper.
The data showed, however, that many SMEs remain on shaky ground. Over a third of businesses are still not operating as normal as a result of the virus, and nearly 10% (representing about 6.1 million jobs) are at risk of shutting down entirely. The report noted that, when asked about the most important resources that would contribute to their growth and success over the next year, the No. 1 answer at 31% was “government support.” Beyond this, 25% cited financing (e.g. bank loans, grants), 25% said better cash flow management, and 24% said better training for staff.