Government urged to help more SMEs with tech adoption and innovation

New research has shown that innovative and tech-savvy SMEs have less access to government funding compared to big corporates.

This is despite the fact that the majority of these smaller sized businesses have introduced changes and new ideas to their business in the last three years, fuelling productive and economic growth.

As a result of the FSB’s The Tech Tonic report, it is urging the government to foster a risk-taking business culture from the bottom up by incentivising millions of small firms to invest in tech adoption and innovate.

FSB Policy Chair Tina McKenzie, explained, “The use of technology and innovation is a major force in economic growth, which is exactly what our country needs right now.

“The pandemic has shown how quickly start-ups and small businesses are to move with new ideas that change the economy, often up against large incumbents. These small firms are keen to keep that legacy alive but are also facing scarcer government support – cuts to R&D Tax Relief Scheme for SMEs, the scrapping of Help to Grow: Digital Scheme, and downscaled support for Growth Hubs.”

Tina added, “The reduced government support is down to a top-down approach to innovation policy overlooking the potential of 99% of the total business population. Becoming the next Silicon Valley won’t crack the productivity puzzle, if we can’t also encourage all firms to adopt new technologies and improve their process. Innovation must be for the many, not for the few.

“Our report tells the story of how tech adoption and innovation is not confined to big businesses and the tech industry, and how millions of small firms are bringing in new ideas and changes to their business, when times are tough, to drive productivity.

“We need a set of new policies and decisions to encourage new starters to innovate, and small businesses to take their new ideas and changes to the next level. To do that, there needs to be an inclusive, entrepreneur-led approach that incentivises small business owners to take risks and develop new solutions from the bottom up.”

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