Over 44% of SMEs plan to invest in IT technology this year despite concerns about rising costs

According to recent Pan-European research commissioned by Sharp, approximately 44% of small and medium-sized enterprises (SMEs) in the UK are planning to increase their investment in technology this year, despite concerns about rising costs

A survey conducted among 5,770 SMEs across Europe, including 502 in the UK, has revealed that both UK and European SMEs anticipate a continuous increase in technology investment. The areas targeted for investment include IT security, hardware upgrades, and server updates.

Among UK SMEs, more than 50% plan to invest over £20,000 in IT this year, with five percent expecting to invest more than £100,000. Additionally, 33% of businesses intend to invest in new hardware, while 28% are looking to upgrade their servers. Security and business continuity are also key investment areas, with 34% of businesses highlighting them as priorities.

Interestingly, cloud migration is a lower priority for UK businesses (21%) compared to SMEs in Europe, where nearly a third (31%) plan to undertake cloud migration projects to address hybrid working challenges. However, UK SMEs may need to focus on IT education and awareness, as implementing Cyber Essentials (25%) and improving Business Intelligence/MI (23%) were identified as top investment priorities.

The research also examined broader challenges faced by SMEs. In the UK, the greatest concerns were rising supply costs (39%) and the cost of living in general (41%), while Sweden reported the lowest levels of concern in these areas (26% and 27% respectively). Finding and retaining talent (23%) and managing a diverse hybrid workforce (22%) were also significant issues, slightly lower than the rest of Europe.

Stuart Sykes, MD at Sharp UK, commented on the findings, emphasising that despite concerns about rising costs, UK businesses are strategically investing in technology and recognising its value even during uncertain times. Sykes highlighted the importance of technology in addressing various challenges in a hybrid working environment, such as IT and security issues.

IT security emerged as the most significant technology challenge for UK businesses in the next 12 months, with 33% of SMEs prioritising security. Interestingly, specific tech challenges varied across sectors in the UK, with hybrid working technology issues being the top concern for 63% of SMEs in the legal sector and 38% in the healthcare industry. The healthcare sector also identified employees’ ability to use software as a primary challenge (50%).