The United Kingdom (UK) has experienced weak productivity growth since the mid-2000s, a pattern broadly observed across OECD countries, which has been coupled with marked regional disparities in economic outcomes. Productivity growth depends not only on the development of new technologies but also on their effective adoption and diffusion across different types of firms and places. Strengthening technology adoption, particularly among small and medium-sized enterprises (SMEs) and in lagging regions, is therefore key to meeting the growth ambitions of the UK government. While the United Kingdom performs strongly in early-stage research and prototype development, the benefits of new technologies do not always translate into widespread business use, especially for more advanced and transformative technologies and among smaller firms. Addressing these gaps requires policies that help firms identify relevant technology solutions, build confidence and develop the necessary skills for implementation, and access support that is coherent and easy to navigate.
This report, developed in collaboration with the UK Department for Science, Innovation and Technology (DSIT), aims to inform ongoing efforts to strengthen the policy environment for SME technology adoption and diffusion in the United Kingdom. These efforts build on a number of government strategy documents which have recently been released, such as the Modern Industrial Strategy (DSIT), the Technology Adoption Review (DSIT), and the “SME Strategy, Backing Your Business” (UK Department of Business and Trade). This report provides an overview of the factors shaping SME technology adoption and diffusion in the United Kingdom, drawing on survey findings, stakeholder perspectives, and international policy experiences. Complementarily, it puts forward fifteen concrete policy suggestions that the UK government can consider to further enhance technology adoption by SMEs and use this as a lever to reduce regional inequalities.
The project underlying this report also included the preparation of twelve international programme case studies that are especially relevant to the UK context. These case studies are available through weblinks in the Annex of this report, as well as support materials on the webpage of the report.
The report contributes to the Programme of Work and Budget of the OECD Committee on SMEs and Entrepreneurship (CSMEE) and supports several ongoing workstreams. It complements the OECD analytical work on SME digitalisation and AI adoption, including activities under the Digital for SMEs (D4SME) Global Initiative and the OECD discussion paper for the G7 “AI Adoption by Small and Medium-Sized Enterprises”. It also builds on recent OECD work developed with UK DSIT on the “Regional impact of public R&D organisations” in the United Kingdom.
The report was submitted for discussion at the 9th session of the OECD CSMEE (6-7 November 2025) [CFE/SME (2025)20] and reflects written comments received by national delegates on its first draft.