More business leaders believe tech is the answer to productivity puzzle

London, 29 June 2023: New research from Be the Business comparing the views of business leaders pre- and post-pandemic found that technology is increasingly viewed as the answer to boosting SME productivity.

Almost half (48%) of business leaders consider up-to-date technology an important enabler for businesses to improve processes, compared to two fifths (39%) in February 2020.

The report titled Pandemic to Productivity, found that awareness, understanding and adoption of key technologies have also increased significantly in the past three years. The largest rise in use of technology was recorded in Customer Relationship Management (CRM) software, used by three in ten (30%) SMEs in 2023, compared to just a fifth (20%) in 2020. A similar increase was also recorded in use of digital accounting software – 54 per cent in 2023, compared to 44 per cent in 2020.

Use of such technology has a proven link to increased firm-level productivity. Previous research from the Enterprise Research Centre found that using a CRM can increase sales per employee by 18.4 per cent over three years, and using web-based accounting software leads to an increase in sales per employee of 11.8 per cent.

Eight in 10 SME leaders still see productivity as a challenge

Pandemic to Productivity found that 83 per cent of SME leaders see productivity as a challenge to UK businesses (32% major challenge/51% minor challenge), representing little change on the 81 per cent recorded pre-pandemic.

Productivity is more likely to be seen as a major challenge in London (47%) than in the North (30%) in 2023. Similarly, younger business leaders (aged 18-34), are more likely to see productivity as a major challenge compared to other age groups, but half of all business leaders (51%) see it as a minor challenge. Legal services (62%), the food and drink sector (55%) and manufacturing (46%) are the sectors most likely to see productivity as a major challenge.

Productivity – more of a watercooler conversation in 2023

Two thirds (65%) of business leaders are now personally using the term “productivity” when talking about their businesses, up from 55 per cent in 2020. Respondents also revealed that they had heard the term “productivity” being used more commonly among their colleagues, employees, clients, advisors/consultants and suppliers. However, the share of business leaders who regularly measure and make improvements to their processes remains at one third (32%), unchanged from 2023.

Anthony Impey, CEO of Be the Business, commented: 

“The pandemic prompted fundamental changes to how we lived and worked. These changes were largely driven by necessity rather than opportunity, but the digitisation many businesses carried out will deliver some long-term improvements.

“As we navigate the current economic challenges, it’s crucial business leaders turn their conversations about productivity into action and take the time to actively measure their performance and make improvements on a regular basis. Prioritising productivity is a means to remain competitive and can enable businesses to thrive in this uncertain landscape.”

ENDS

Notes to editors:

1. Opinium conducted an online survey of 1,504 Directors in micro, small and medium sized businesses between 30 January 2020 and 4 February 2020. The organisation also conducted an online survey of 1,000 senior decision makers in SMEs between 14 and 23 February 2023. The findings of these two surveys are presented and compared within this report.

2. The Enterprise Research Centre’s State of Small Business Britain Report 2018 found that adoption of digital technologies is strongly linked to sales per employee, a measure of productivity. Use of cloud-based computing leads to an increase of 13.5 per cent in sales per employee after three or more years while using a CRM adds 18.4 per cent to sales per employee over three years. E-commerce adds 7.5 per cent to sales per employee over three years while web-based accounting software leads to an increase in sales per employee of 11.8 per cent over three years. Computer aided design has a slightly smaller impact, increasing sales per employee by 7.1 per cent.

About Be the Business

Be the Business is an independent charity that inspires greater productivity, by connecting leadership teams to the curated expertise needed to answer today’s challenges. By combining peer-to-peer networks, the employee expertise found within pioneering corporate partners, independent business experts and our research and insights, we inspire leadership teams to create and deliver sustainable business change. Collectively we’re transforming the UK’s productivity, raising the value of businesses in our communities, safeguarding jobs and improving standards of living.

For further information contact James Gribben, Head of Communications, on 07900885721.