85% of European SMEs rely on digital tech for growth

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aA+ aA- 85% of European SMEs rely on digital tech for growth By

Fibre2Fashion Published

Nov 20, 2023

Over three quarters or 85% of European small medium enterprises (SMEs) said that digital tech is crucial to their growth plans, and a resounding 84 per cent pinpoint technology as instrumental to enhanced efficiency and cost management.

There’s also a sense of optimism towards emerging technologies — a third or 34% have adopted Artificial Intelligence (AI), for instance, marking a substantial rise from just 8 per cent in 2021.

Separately, 80% are confident that the introduction of a digital ID will benefit their business, according to the Sage’s report titled ‘Empowering SMEs in The Digital Decade: The 600 billion EUR opportunity’.

However, despite seeing high returns on investments from tech and digital confidence, barriers remain. On average, European Union SMEs have only amplified their tech investments by 16% over the past year. Financial constraints further reduce this figure to 9% for some businesses, highlighting the pressing need for financial support. Furthermore, late payments are a significant obstacle to SMEs, with cashflow and liquidity problems second only to rising costs as a barrier to growth.

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With the right policy framework, the research reveals the huge potential for SMEs to create a high-growth digital economy. Raising the pace of digital transformation for slower-to-adopt SMEs could contribute €628 billion to the European economy.

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