Because of their size, SMBs cannot achieve the economies of scale that larger businesses manage. They are often geographically constrained in terms of the resources they can access. And, they may lack the expertise and the in-house staff to stay abreast of best practice and innovative technologies.
This is a huge issue for both individual companies and the economy as a whole. According to the Federation of Small Businesses (FSB), there are 5.6 million small businesses in the UK; SMBs account for 60% of all private-sector employment and their total turnover is £2 trillion—over half of all private sector turnover. Clearly, if SMBs were to become, say, 15% more productive, it would make an enormous difference to the economy and overall life in the UK.
When it comes to productivity and SMBs, technology is one of the easiest wins out there. If SMBs were to start making better use of technology and building technological know-how into more of what they did, it would drive improvements in areas ranging from customer satisfaction to worker engagement. It would make these businesses more knowledgeable and more competitive and allow the companies in question to be more agile and innovative. Moreover, these improvements would feed into each other and create a virtuous circle.
Of course, there is no reason those small businesses can’t be amazing tech companies. You only need to visit Old Street in London to find hundreds of start-ups that do nothing but tech. However, away from London’s pulsing digital hub, there can often seem to be a divide between high tech SMBs and SMBs in other sectors.
Why is this?
One of the answers is that many smaller companies do not know where to start. They have plenty on their plates as it is and reinventing themselves around technology is not a priority or even something they give much thought to. As the productivity expert Alistair Esam explains,
“They don’t know how to solve [the productivity problem], so they often make excuses that they are too busy. Ownership is key. Employees need to own the solutions and tools to do a great job.”
Often whole sectors can feel affected by this tech malaise. “Veterinary practice is a fairly conservative area and has lacked innovation,” says Dr. Mark Boddy, founder and CEO of the online 24/7 vet service PawSquad. “Most innovation has come from outside the industry.” In a similar vein, there are many other sectors and businesses which, even now, are relatively untouched by the tech advances of the past 20 years. The staff may use smartphones, but that’s pretty much it.
This editorial from Samsung highlights the productivity issues that SMBs face and reveals how embracing new technologies will help them to thrive in an increasingly fast-paced and competitive business environment.