As many as two in five UK SMBs are concerned about high inflation, with many worried that rising costs are an expense that’s totally out of their control.
According to a Zoho study of more than 1,500 senior digital transformation decision-makers from five European countries, including 300 from the UK, the pressure from high costs resulting from supply chain disruptions and an ongoing skill shortage is mounting.
The outlook is positive, though, with more than half (55%) believing the UK is now “past the worst”, indicating that they have already come to terms with increased prices and are now hoping to see the pressure ease.
Inflation is hitting Britain’s small businesses hard
While many may be hopeful, that leaves 45% concerned by the economic outlook. Inflation in Britain still stands at 4.6%, or around double what the UK government had set out as its target.
Employers see customer experience, employee experience, artificial intelligence, and data privacy as four key areas of investment, but overall, digital spend has been somewhat limited due to the Bank of England’s rising interest rates.
Sachin Agrawal, Managing Director for Zoho UK, commented: “Business confidence has taken a beating over the past few years, so it is no surprise that many are still concerned about the stability of the UK economy.”
Data privacy looks to be increasingly important as SMBs aim to protect the tools and resources that they already have, before they look to invest in expanding what they already use in an era of AI tools.
Agrawal added: “A data-driven business can use real-time and extensive insights to make the right decisions to take advantage of opportunities and to reduce risk. However, for technology such as AI to be adopted successfully, businesses need to adopt it with customer trust in mind to deliver benefits such as automation, forecasting or improved customer service, to name just a few examples.”
Zoho refers to the news as a “wake-up call,” claiming that only one in five (19%) of UK companies have “good digital health.”
Clearly, 2024 should be a year for businesses to invest in technology solutions, however the ongoing economic pressure will continue to be troublesome for many.
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