UK SMEs hike IT spending after losing business through underinvestment

UK SMEs have earmarked an average spend of £30,000 on IT this year, according to research from GE Capital.

Small businesses are ramping up IT investment this year.

UK SMEs have earmarked an average spend of £30,000 on IT this year, according to research from GE Capital.

Of the 250 businesses surveyed, 12.5% said they had lost out on new income or business opportunities as a result of dated or inefficient equipment, having put off replacing it during the downturn. On average, businesses have lost by £8,301 each, said the report.

Almost one in five (17.8%) said investments were needed to support new orders and business opportunities, while 24% said IT investment was required because of existing equipment deteriorating. The most prevalent motivation was to enhance efficiency and productivity (34%).

John Jenkins, chief executive of GE Capital UK, said: "Despite popular belief, the appetite for investing in growth amongst UK SMEs is actually very strong, with many businesses having reached a tipping point where putting off investment is no longer possible without compromising their ability to create revenue. Many businesses not planning to invest in the next year have already recently upgraded, further illustrating that we are in the midst of significant renewal."

Pete Scargill, IT chairman at the Federation of Small Businesses, said: "We know from surveying our members that IT is definitely a growth area for small businesses in the coming year, as more small firms aim to trade online and take advantage of the opportunity to gain access to wider markets at a lower cost."

"Doing business online saves money on marketing and overheads on managing premises, but businesses really need the government to guarantee to provide faster broadband speeds and universal coverage to enable them to make the most of this opportunity. The lack of infrastructure available is one of the barriers that prevents small firms from being able to invest in IT that will benefit their business," Pete Scargill said.

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