intelligent

Despite their contribution to the innovation landscape , tech-savvy and innovative small firms have seen more and more cuts to government support in the past year . Tina McKenzie , Policy Chair , Federation of Small Businesses , explains how the government in the UK can do more to support SMEs and help them innovate and introduce new products .

MALL BUSINESSES ARE the

A new report by the Federation of Small Businesses ( FSB ) – titled The Tech Tonic – found that across all sectors , seven in ten ( 69 %) small firms have introduced a form of innovation in the last three years . This includes the development of an entirely new product ( s ) to their market ( 25 %), significantly improved existing or new product ( s ) ( 38 %) and improving their internal processes for a better staff and customer experience ( 25 %).

Small firms with new and improved products say increased turnover or profit is the main motivation for introducing these changes , followed by their desire to diversify their business . Those that have introduced new or enhanced staff and customer-facing processes are mostly motivated by the need to increase business resilience and automate .

The average cost of introducing any type of innovation over a three-year period amounts to over £ 27,000 for a small firm , and the changes on average increase revenue by 14.8 %.

When it comes to tech adoption , the vast majority ( 83 %) of small firms now have a company website , compared to only 51 % in 2018 . There has also been a significant increase in the number of companies using cloud storage , up from one-third ( 33 %) in 2018 to two-thirds ( 67 %).

Declining government support

Despite their contribution to the innovation landscape , tech-savvy and innovative small

GOVERNMENT CUTS TO R & D TAX RELIEF , EVEN FOR R & D INTENSIVE FIRMS , ARE SELF- DEFEATING , ESPECIALLY WHEN COUNTRIES SUCH AS FRANCE AND THE US ARE GOING IN THE OPPOSITE DIRECTION .