Small and medium companies are lagging behind in adopting digital technologies, and additional government support is needed to overcome the barriers, according to manufacturers’ organisation Make UK. But the Government-backed Made Smarter pilot in north-west England is “clearly working” and should be extended nationwide, it says.
A new report by Make UK and Infor, Bouncing Back Smarter – Innovation Monitor 2020, found that many companies had taken significant steps in adopting digital technologies such as the use of 3D printers, artificial intelligence, the internet of things, and augmented and virtual reality. Around 80% were confident that industrial digital technologies would be a reality in their businesses by 2025.
But 44% were not adopting the technologies. And the research also found that in the two years since the last Innovation Monitor survey there had been little change in the barriers to digital adoption, particularly for smaller companies. A lack of skills and technical knowledge remain top of the list, but scarcity of finance is becoming a more significant block, especially with companies stretched by loss of business caused by the Covid pandemic.
A lack of knowledge of government schemes and an absence of targeted help with the introduction of digital technology are also holding back progress, the report found. “Other countries, such as Germany and Japan, have extensive support systems in place to help their SMEs modernise, giving them a significant boost to their international competitiveness,” Make UK said.
But it added: “The Made Smarter pilot in the North West has been impressive in digital adoption, with 20% of small businesses in the area already at the highest level of technology adoption.” This is second only to the South East at 33%. This compares with the West Midlands where “a very high proportion” (18%) of companies have done nothing about digitalisation, and only 9% are at the highest level of implementation.
“The pilot programme provides a comprehensive package of digital support – financial help for digital technology investment, access to a complete advisory service and training in how to use [the technology] to best advantage.” Make UK said. Support for skill building is also an integral part of the programme. “The research shows clearly that this model is working, making a strong case for national rollout,” it concluded.
The report can be downloaded at www.makeuk.org/insights/reports/innovation-monitor-2020