Collaborate UK, CitySprint’s sixth annual survey of over 1,000 SME decision makers, reveals a sharp divide between how important SMEs think new technology is to the future of their business and how much they actually invest in it.

Over three quarters (79%) of SMEs see investing in technological innovation as important, yet one in ten haven’t invested in any new technology at all in the past 12 months.

In addition, a quarter of SMEs have spent less than 10% of their budget on new technology, compared to over half (56%) who have spent between 11-30%.

This lack of investment could mean that the small businesses who spend less are falling behind their peers in terms of innovation.

The research also found that more than a third (34%) of SMEs would be more likely to adopt new tech in the future if there was increased Government support or bursaries available, while over a quarter (27%) of businesses have said they would like to see more information available on what would work for their specific business.

Previous research from the CBI suggests that by encouraging more businesses to take advantage of existing technologies, management practices and business support – such as cloud computing, mobile technology and e-purchasing – the UK economy could receive a £100bn boost and see a 5% reduction in income inequality.

Whilst businesses understand the importance of implementing new technology, a clear list of barriers has emerged which are preventing SMEs from making the investment needed: a lack of budget comes out as the most cited reason (38%), followed by concerns about security (26%) and that staff would have to be trained to use it (24%).

Nearly a fifth (18%) would be more likely to adopt new tech, like AI, blockchain, or automation, if they worked with other businesses of a similar size and scale to increase their chances of success.

Patrick Gallagher, CitySprint Group CEO, said: “Business owners know that innovation drives growth, but testing and adopting the latest tech is expensive and time consuming, and without more support small businesses struggle to keep up with technologies that can help them stay ahead.

“Whilst further support is crucial, it’s understandable that some SMEs don’t want to go it alone, particularly during a period of economic uncertainty.”

Gallagher said CitySprint welcomed the launch of the Government’s Business Basics Programme last year, which included a recently announced £2m grant to encourage SMEs to introduce proven technologies. But he said that small business owners need to seek out these types of grants and shouldn’t be afraid to ask for support in order to reach their innovation goals.

“What this research ultimately shows is that if SMEs aren’t able to keep up with the latest tech then the UK’s well-earned reputation as a hotbed for innovation could be impacted.”