UK as frontrunner in international comparison
As investigated by a recent IONOS poll, British SMEs are leading the way when it comes to actively implementing digital measures in the workplace. This can be traced back to the high level of UK government support for SME digitalization, which has launched several initiatives to help SMEs go digital. The Digital Boost program serves as an example and offers free training and resources to businesses looking to evolve and grow.
The government has also set aside major funding in digital infrastructure to improve connectivity, resulting in approx. 80% of SMEs having a website, and more than half using social media to promote their business.
Robert Scheid, Director of Invest (GTAI) and Ambassador for the Digital Hub Initiative in the UK, is based in London and supports UK companies in their expansion plans to Germany. He confirms this development and states “businesses in the UK tend to have a pragmatic and results-oriented approach. For most companies digitalization is a no-brainer, as it allows them to grow at a much faster rate. Everything from client acquisition to payments are accelerated using digital tools. Even the public sector in the UK has already implemented a ‘digital first’ strategy. For companies setting up, applying for permits, dealing with taxes and more, the authorities have moved almost all services online and gone largely paperless.”
Germany is midrange in the use of digital technologies by SMEs
In international comparison, Germany lags behind in the use of digital technologies – it is merely in 18th position for integrating digital technologies into business processes.
This is caused by a number of hurdles standing in the way, starting with the average SMEs’ low digitalization expenditure. In order to catch up with the UK, an annual increase from currently around EUR 18 billion to EUR 35–50 billion would be required. Likewise, the shortage of qualified staff and the limited transparency of suitable funding programs represent obstacles for the use of digital technologies by businesses.
As stated by Achim Weiss, CEO of IONOS, German SMEs are in need of “simple, unbureacratic help and solutions” to ensure their future viability.
Promoting digitalization in Germany
So what exactly can Germany do to catch-up? “I think a willingness to adopt new technologies and try new things gives some British SMEs an edge over their international competition”, states Robert Scheid.
One solution may lie in incentivizing digitalization projects through financial means. This can include low-interest loans (with the inclusion of a grant component and the option of a partial risk assumption), which encourage the adoption of digitalization initiatives in the business sector. R&D support measures can also support the development of new digital technologies, while improving access to equity financing for start-ups can help new technologies find their way to market quickly.