How has technology impacted small businesses in today's rapidly digitised society?
The Impact of SMEs Though the name may suggest otherwise, small businesses have one of the largest impacts on today’s economy in the United Kingdom. According to the Office for National Statistics, Small to Medium Enterprises (SME), have produced a turnover of £2.6 trillion during early 2023, and counting. There are currently estimated to be 16.4 million people employed by SMEs, making up a total of three fifths of employment nationally. These statistics are very important, as any good economy can be measured by four key facets: Gross Domestic Product (or GDP, the monetary value attached to services and products in a particular country), the rate of inflation, the unemployment rate, and the distribution of wealth (certain areas of particular wealth versus overall wealth). SMEs impact these figures drastically, so how has the digitization of business impacted this?
The Consequence of Technology The disappearance of the high street may be a concept you are familiar with, as through the development of online delivery services, it has never been easier to have clothes, food, and everything else you might need straight to your front door. It is also easy to spot something you like in a store and immediately search for a discounted price from another retailer online. The use of technology has provided space for customers to explore the cheapest option, which during the time of a cost-of-living crisis, is the most sensible thing a buyer can do. However, as people are spending less and less, small and independent businesses are facing the consequences, and with fewer people spending, fewer SMEs are earning. This forces independent enterprises into closure, solidifying the harmful impact on an already struggling economy.
Related: Modern Gardening: The Grey City Turning Green The Upsides Though existing highstreets businesses continue to suffer the constraints placed on them by technological advances, this platform has enabled a wealth of new opportunities for the online market. As aforementioned, the cost-of-living crisis has placed many under a cost-restrictive business plan, but with the ability to market and distribute digitally, the need to maintain the expense of a costly storefront becomes eliminated. If the traditional “Brick and Mortar” businesses do require that physical area, a showroom remains to drastically cut the expenses of additional unused space which may be found in a rented storefront. Digital marketing becomes easier by the day through the utilization of social media sites such as Instagram or Tiktok, in which content creation is both simple and efficient in the scattering of product advertisement. In a direct link, additional features of these sites such as “Tiktok Shop” make it easier than ever to distribute produce as an SME. With the additional assistance of the “accept cookies” button you often find as you enter a website, digital algorithms are used to target niche audiences - those most likely to interact with the products of a small business.
For many businesses technology has contributed as the nail in the coffin; for many others, the digital transformation of business has supported the flourishing of hundreds of new enterprises. Though as a result of this development, what the future may bring is uncertain. It is however a wise assumption to make, that the digitization of corporations will continue to grow, encouraging SMEs to adapt and grow with it.
Office for National Statistics - SMEs: https://www.ons.gov.uk/businessindustryandtrade/business/activitysizeandlocation/adhocs/12 08percentagecontributiontoukeconomybysme
Gov.uk - SMEs:
https://www.gov.uk/government/statistics/business-population-estimates-2022/business-popul ation-estimates-for-the-uk-and-regions-2022-statistical-release-html#:~:text=Nonetheless%2 C%20SMEs%20account%20for%20three,%C2%A32.1%20trillion%20(51%25)