Tech Hub policy roundtable: Overcoming the barriers to tech adoption for UK small businesses

Enterprise Nation held a roundtable of executives from leading technology companies, senior government policymakers and small business leaders to tackle the critical issue of adoption of digital tools by UK small businesses. The event was organised as part of the Enterprise Nation Tech Hub.

Hosted by Sage, and with our partners Google, Vodafone Business, Dell, BCS, and Block, we were thrilled to be joined by:

• Allison Gardner MP, Member of Parliament for Stoke-on-Trent South

• Liz Barclay, Small Business Commissioner

• Paul Drabwell, deputy director for business support at the Department for Business and Trade

• Felicity Burch, executive director at the Department for Science, Innovation and Technology's Responsible Technology Adoption Unit

• Adam Woodhouse, chief financial officer, Neom Wellbeing

• Stuart Morland, managing director, Datel

Read on for a summary of what was discussed on the day.

Navigating the technology landscape

The sheer number of technology options available was highlighted as a major barrier to small business tech adoption, with one participant noting "I can't navigate the tech landscape as a whole because there are so many options, and I have to navigate each one of them."

Participants stressed the need for a more streamlined and accessible way for small businesses to identify and evaluate the most suitable technology solutions.

Benefits of e-invoicing for the UK economy

E-invoicing was highlighted as an enabling technology to boost small business tech adoption. Attendees highlighted its benefits as seen in other countries, such as the increased tax collection its introduction facilitated in Italy. This was contrasted with the more modest and slower impact of Making Tax Digital in the UK.

Along with streamlining invoicing, the discussion highlighted how eInvoicing could improve the connectivity between small businesses' financial systems. This increased integration was viewed as an enabler for other productivity-enhancing technologies and processes.

Participants discussed the challenges around the implementation of e-invoicing, even for large companies that had already adopted it. One participant shared an example of a large business that had implemented e-invoicing, yet still struggled to get small businesses on board with the system. This underscored the need for a more comprehensive national digital strategy to tackle the complexities around technology adoption.

Emphasising the tangible benefits of adopting technology, not just return on investment (ROI) calculations

To incentivise small business tech adoption, participants emphasised that small businesses don't necessarily need detailed return on investment calculations from government or industry. Rather than communicating complex ROI figures, participants suggested that small businesses respond better to more tangible and relatable information, such as:

• How much time a technology solution can save them per week/month

• The specific cost savings it can deliver, e.g. the cost of a human performing a task vs. an automated solution

Participants highlighted the value of sharing real-world examples and testimonials from other small businesses that have adopted a particular technology. Hearing directly from peers about the benefits they've experienced was seen as more compelling than generic ROI data.

Participants suggested that small businesses are often more concerned about how easily a technology can be implemented and integrated into their existing processes. Communicating the user-friendliness and seamless integration of a solution was viewed as more important than complex ROI projections.

Addressing the 'fear factor'

Several participants noted that fear and uncertainty around new technologies can be a significant barrier to adoption for small businesses.

Concerns around making costly mistakes, the complexity of some solutions, and the perceived risks of adopting new technologies were identified as factors contributing to this "fear factor". Addressing these psychological barriers through education, hands-on support, and confidence-building measures could be an important aspect of driving increased technology adoption.

Leveraging existing technology investments

The discussion touched on the issue of small businesses having technology solutions in place that they are not fully utilising or maximising.

Participants shared examples of businesses paying for tools and software, but not taking the time to properly integrate them or train staff on their use. Helping small businesses get more value out of their existing technology investments could be a more cost-effective way to drive productivity gains, rather than focusing solely on new technology adoption.

Addressing late payments and cash flow

The issue of late payments and its impact on small businesses' ability to invest in technology was a prominent topic of discussion.

Participants emphasised the need for a cultural shift within the business community to improve payment times and free up cash flow for small businesses. Improving the efficiency and connectivity of invoicing and payment processes, such as through eInvoicing, was seen as a key part of the solution.

Improving communication and collaboration

Effective communication, both in terms of language and content, was identified as a critical factor in driving technology adoption among small businesses. Participants emphasised the need for stakeholders to "radically collaborate" and use the same terminology and messaging when engaging with small businesses.

Empowering workers to drive tech adoption

The roundtable discussed a worker-focused artificial intelligence (AI) adoption project being undertaken by Google, Enterprise Nation, and others.

This approach focuses on training employees within small businesses to identify and develop solutions that can improve their everyday processes and tasks using AI. By empowering workers to drive the technology adoption process, this model aims to increase engagement and ensure the solutions are tailored to the specific needs of the business.

The role of training and skills development

The roundtable touched on the importance of training and skills development to support small businesses in adopting new technologies.

Participants discussed the potential for more flexible, bite-sized training programmes that are tailored to the specific needs and time constraints of small business owners and employees. The idea of providing accreditation for shorter, more practical technology training courses was also raised as a way to validate and encourage skills development.

The role of regulation and standards

Participants discussed the complex interplay between regulation, standards, and technology adoption for small businesses.

The need to involve regulators in the conversation was highlighted, as they can play a crucial role in shaping the landscape and providing clarity for small businesses. The potential for industry-led standards and assurance frameworks to help small businesses navigate the technology landscape was also raised as an area for further exploration.

Conclusion

The discussion underscored the complex challenges around technology adoption for small businesses in the UK. While there are no easy solutions, participants emphasised the critical need for a collaborative, tailored, and strategic approach. By working together, industry leaders and policymakers can help unlock the full potential of digital transformation for small businesses.

Join Enterprise Nation and SME4Labour for an event focused on small business digital adoption at the Labour Party Conference in Liverpool on 23 September. Register here.

Make your small business more productive with the Tech Hub diagnostic tool

Get tailored recommendations, join virtual workshops, connect with expert advisers and find practical resources. Take me to Tech Hub now