UK micro-businesses and SMEs, that provide their employees with work phones, are losing out on over one hour of working time per employee, per week, on average, as poor connectivity means that staff cannot get online or complete work effectively. For medium-sized businesses, this equates to up to 250 hours of working time per week.
The research, conducted by Three UK in partnership with YouGov and Development Economics, found that:
- Loss of business revenue has a significant impact on the British economy – an estimated loss of economic output (GVA) amounting to £7.7 billion every year at a time of sluggish growth.
- Professional services and retail sectors are hardest hit by the cost of poor connectivity.
- The issue is affecting businesses at a challenging time, with almost three-quarters of SMEs reducing costs due to the macroeconomic backdrop.
The lost working time for British micro-businesses and SMEs equates to reduced business revenues of £18.77 billion a year, on average, according to the research, and it means that £7.7 billion of output is potentially being lost to the British economy every year.
The areas hit hardest were professional services – including legal, accounting and media businesses – and retail, which are two of the largest sectors in the UK economy. The research found that professional services firms lost £5.3 billion in revenue on average per year due to poor connectivity, accounting for an annual output loss of £2.8 billion to the economy, while the retail sector lost £3.7 billion in revenue per year because of poor technology, resulting in an annual loss of £560 million in output to the British economy.
Cost of living and talent crisis
These figures come at a particularly challenging time for businesses. Amidst rising costs and inflation, almost three-quarters (71%) of SMEs have been made more aware of areas where they need to reduce spending because of the cost-of-living crisis, with nearly a third of SMEs (32%) believing they are paying too much for phone contracts and looking to cut costs.
Simultaneously, nearly a third (29%) of SMEs are worried they could lose employees due to not having good technology. This figure rises to almost half (48%) amongst medium-sized businesses, which is especially worrying at a time when talent shortage is impacting most industries.
Lack of support
Having a strong online connection is vital for SMEs to operate and grow their businesses, with over a third (36%) believing that they could perform better if they had better mobile phone connectivity. Meanwhile, one in five SMEs (20%) are concerned that not knowing how to use the latest mobile phone technology could allow their business to be left behind.
A lack of support and knowledge is a barrier to adopting the latest technology for these enterprises, with almost half (48%) of SMEs stating that the technology industry uses complex technical language that they don’t understand.