Digitalisation key driver for small business growth in UK

Manchester, 6 April 2022

New research from IONOS, one of Europe’s largest cloud and hosting services providers, has found that just under two thirds (63%) of SMEs find digitalisation useful for revenue growth, and nearly three-quarters (70%) of those asked find it useful for winning new customers.

IONOS conducted the research to understand where digitalisation is tracking in terms of businesses priorities and what aspects SMEs find important for driving their business forward, as well as key challenges. The research, conducted by YouGov on behalf of IONOS, polled a total of 1,002 UK SMEs.

The research also explores how UK SMEs compare to their European counterparts, with over 3,000 individuals in France, Spain and Germany polled.

Interestingly, the results show that UK SMEs feel less impacted by barriers to digitalisation, compared to their European counterparts. Respondents in all countries rate costs and lack of time as the major barriers to digitalisation for their companies, however the UK came out lowest for both of these with four in 10 stating both time (42%) and costs (40%) as key issues.

UK businesses also feel more knowledgable overall about digitalisation, with only 29% saying this is a barrier, compared to over half (51%) of those asked in Spain.

The UK is the frontrunner in digitalisation implementation when compared to the other countries polled, with almost 80% of UK SMEs surveyed having a website, 76% using an email with their own domain and 64% using social media to further their business needs. France came out much lower, with just over half of those asked having a website (52%), and under half (47%) using social media.

Following the pandemic, digitalisation continues to be central for SME business models, with three quarters (76%) stating it as important to the future viability of the business.
Given the increase in cyber attacks experienced since the pandemic, and the tightening of data compliance, it’s unsurprising to see that – besides being visible on the internet (46%) – IT security and data protection are two of the top areas of focus for SMEs implementing digital measures (42%), followed by collaboration with employees, partners and customers (39%) and digitalisation of the complete business model (28%), showing a shift to a more digital focused approach.

The second year IONOS has conducted research into SME digitalisation, one area of growth in the UK highlighted is the increase in SMEs offering products via an online shop, with this jumping from 22% in 2021 to 33% in 2022.

“Many small and medium-sized businesses have finally realised that digitalisation secures their future viability,” says Achim Weiß, CEO of IONOS. “However, the results of the YouGov survey unfortunately also show that there are still drawbacks in the implementation. When budget and lack of time prevent companies from this essential task, simple, unbureaucratic help and solutions are needed!”

Looking at wider business investment areas for SMEs, nearly seven in ten (68%) rate sustainability and environmental protection for their company as important and over half (53%) stated sustainable suppliers as key – something that will be considered when choosing technology suppliers too.

Exploring the views on sustainability in more detail, 38% found certification and seal of approval for sustainable products or companies as important for sustainability in the company. When exploring obstacles to becoming more sustainable though, financial resources (32%) and knowledge and skills (22%) came out as the top issues.

UK: The data used is based on an online survey by YouGov on behalf of IONOS, in which 1,002 people from companies up to 250 employees participated between 14 and 20 January 2022.

Spain: The data used is based on an online survey by YouGov on behalf of IONOS, in which 1,001 people from companies up to 250 employees participated between 14 and 24 January 2022.

France: The data used is based on an online survey by YouGov on behalf of IONOS, in which 1,003 people from companies up to 250 employees participated between 14 and 24 January 2022.

Germany: The data used is based on an online survey by YouGov on behalf of IONOS, in which 1,004 people from companies up to 250 employees participated between 14 and 24 January 2022.