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DIGITAL DIVIDE REMAINS AS SMALL FIRMS FOCUS ON SURVIVAL
New behavioural science research from Xero found that despite the critical role of technology during the pandemic , there is still a digital divide among small UK firms .
According to One Step , a study of more than 1,000 small business owners in the UK , carried out in partnership with behavioural science consultancy , Decision Design , there is resistance to change and a lack of confidence , preventing investments in new technology . This confidence gap stems from several behavioural barriers – mindsets and perceptions about technology and change that frequently recurred among small businesses .
“ In times of stress requiring rapid adaptation , we have to choose between fight , flight or freeze responses ,” said Sonya Dineva , Lecturer in Business Psychology at the University of East London . “ In many cases , such as the current pandemic , fear and inertia can hamper our ability to ‘ fight .’ By focusing purely on survival , small business owners may inadvertently
DAY-TO-DAY SURVIVAL IS CLEARLY A PRIORITY , WITH SEVEN OUT OF 10 ADMITTING THEY ARE FOCUSED ON THIS RATHER THAN HOW TO BETTER RUN THEIR BUSINESS .
decide not to do anything at all , adopting a ‘ freeze ’ approach to managing change . This may obscure their broader strategic vision and shift their focus onto short-term goals ; as a result , they fail to see the pitfalls of such actions and the plethora of growth opportunities that could be hidden in crises , including the benefits of digitalisation .”
A large portion of UK small businesses ( six out of 10 ) claimed to be confident when embracing new technology , while the same number of respondents were excited about the prospect . However , there are still many barriers holding them back .
After what has been a tough 18 months for many , only four out of 10 UK small businesses are open to taking risks when making business decisions , while five out of 10 are reluctant to accept the risk of negative outcomes from tech-related decisions . Day-to-day survival is clearly a priority , with seven out of 10 admitting they are focused on this rather than how to better run their business . This filtered through to tech-based decisions too ; only three out of 10 said they would consider themselves worse off if digital investment is postponed .
Compared to small businesses surveyed for Xero globally , UK small businesses were the least likely to agree that new technology would benefit them once integrated ( four out of 10 ), or result in immediate cost savings ( three out of 10 ), time savings ( four out of 10 ) and immediate return on investment ( three out of 10 ).
However , this scepticism could prove costly for those small businesses that will soon be required to submit tax digitally – with the looming Making Tax Digital ( MTD ) deadlines for VAT-registered businesses with a taxable turnover below £ 85,000 . �
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