Businesses in the United Kingdom perform above EU and OECD averages in technology adoption overall, with particularly strong results for more mature technologies such as cloud computing and data analytics. By contrast, adoption remains weaker in more advanced technologies, notably robotics. Among SMEs, and especially medium-sized firms, the adoption gap with large firms has narrowed considerably for process-related tools. However, uptake of management-support technologies, such as customer relationship management (CRM) and enterprise resource planning (ERP) systems, remains more limited, particularly among smaller SMEs. Adoption of advanced technologies, including AI and robotics, also remains modest across the SME population. Marked regional and sectoral differences in technology adoption persist, reflecting the United Kingdom’s economic geography and industrial structure.
SME Technology Adoption in the United Kingdom
Abstract
This chapter offers a brief statistical overview of SME technology adoption rates, showing how the United Kingdom compares to the EU and OECD averages, as well as disaggregated information by firm size and regions. The main messages are the following:
UK businesses show technology adoption rates above the EU and OECD averages, which is consistent with the income level of the country. This is especially true for mature technologies, such as cloud computing and data analytics. Nonetheless, there are some “pain points” related to the adoption of more sophisticated technologies, like robotics, where UK businesses could be expected to do better given that manufacturing remains a key sector across several UK regions and is typically a major user of robotics.
SMEs, especially larger ones, have mostly closed the technology adoption gap with larger companies on process tools, such as the use of websites, e-sales or accounting software. On the other hand, the adoption rates of management-supportive technologies, such as customer relationship management (CRM) and enterprise resource planning (ERP), and advanced technologies, such as AI or robotics, are still modest among UK SMEs.
There are also strong regional and industry differences in technology adoption, reflecting the economic geography and sector composition of the United Kingdom. London and the South-East lead on most technologies, while the North-East shows comparatively lower adoption levels. From a sectoral perspective, the use of AI, robotics and automation is stronger in manufacturing, although, as mentioned earlier, the adoption of robotics could be higher. On the other hand, wholesale and retail trade are strong users of accounting software and management-supportive programmes like ERP.
Based on the latest comparable data between the United Kingdom and the EU, which date back to 2019-20201, the United Kingdom does better than the EU and OECD averages when it comes to the use of social media, cloud computing and big-data analytics, is roughly on par on the adoption of customer relationship management (CRM) software, while it trails on the adoption of enterprise resource planning (ERP) software and artificial intelligence (AI)2 (OECD, 2019-20[1]). Complementary evidence also points to lower use in the United Kingdom than in the EU as a whole of advanced robotics among manufacturing firms and platform technologies among services firms, although there are some UK strengths in specific technology niches, such as drones in the construction sector and augmented or virtual reality in the services sector (European Investment Bank, 2020[2]). Altogether, these data suggest that UK businesses are above-average technology adopters in the context of Europe, although there are some areas such as robotics in the manufacturing sector and AI where adoption appears to be subdued. More recent national data, however, point to higher adoption rates since 2020. While AI is a new technology whose business applications are yet to be fully discovered, the relatively weak performance of the United Kingdom on robotics is surprising, given the manufacturing legacy of the country, especially in regions like the Midlands.
Percentage values
Note: Businesses with 10 and more employees; data for ERP, CRM, social media and Big Data Analysis is for 2019; data for Cloud computing and AI is for 2020; EU – average for European Union (27 countries), OECD – average for OECD countries.
Source: (OECD, 2019-20[1])
The adoption of digital technologies has strengthened at national level since 2018. According to a 2024 survey of 373 UK firms of all sizes conducted by the Centre for Economic Performance (CEP), and distributed via the Confederation of British Industry (CBI)3, more than 60% of companies reported investing in cloud computing, over 40% in data analytics and around 25% in AI (see Figure 2.2) (Oliveira-Cunha, Serra-Lorenzo and Valero, 2025[3]). Longitudinal Small Business Survey (LSBS)-based analysis for 2018-2022 shows gradual increases from low levels in ERP (rising from 6.7% in 2018 to 10.9% in 2022), AI/robotics/automation (from 3.4% in 2018 to 8.6% in 2022) and augmented reality and virtual reality (AR/VR) (from 1.4% to 3.4%)4. On the whole, this suggests that UK businesses are open to new technologies, especially foundational enablers such as cloud computing and data analytics, while they are still at an early stage in the adoption of more advanced tools (Mahmood, Ashgar and Kousha, 2024[4]).
Percentage values
Note: Based on a sample of 373 firms (all sizes), unweighted aggregates. “AR, VR” = Augmented and Virtual Reality; IoT = “Internet of Things”; and DLT = Distributed Ledger Technologies (including blockchain); AI technologies are understood broadly, including chatbots, analysing documents using machine learning, and generative AI.
Recent survey evidence shows near-universal uptake of process tools (e.g. company websites, e-sales/marketing, accounting/HR, e-invoicing), while adoption is markedly lower – and more size-sensitive – for systems (CRM/ERP) and advanced technologies (AI, robotics/automation, internet of things (IoT), AR/VR). Micro firms (5-9 employees) look broadly similar to small firms on adoption of e-commerce, online marketing and cloud computing, but lag on CRM/ERP and most advanced tools, consistent with the fixed-costs, complexity and change-management burden that these systems entail. In contrast, small and medium-sized firms show higher penetration of CRM/ERP and use of a wider set of more advanced tools than micro firms (Department for Science, Innovation & Technology, 2024[5]; Enterprise Research Centre, 2022[6]).
Percentage values
Note: Based on sample of 1 003 firms, weighted, representative of the UK SMEs population.
The UK Innovation Survey (UKIS) indicators on technology investments are consistent with the technology adoption picture. In 2020-2022, SMEs were less likely than large firms to invest in software (around 17.5% vs 24.5% for large), while ICT hardware investments were similar (around 17-18% in both groups) (Department for Business and Trade, 2024[7]). Comparing the periods 2018-2020 and 2020-2022, the UKIS shows that the shares of both SMEs and large firms investing in software and hardware fell, with a more pronounced decline in software investments. However, other surveys have suggested that the COVID-19 pandemic may have accelerated the adoption of some digital practices without necessarily involving stronger investment during the period 2020-20225 (Riom and Valero, 2020[8]).
Percentage values
Source: UK Innovation Survey 2023: statistical annex (Department for Business and Trade, 2024[7])
Business technology adoption rates diverge greatly across UK regions, with differences largely reflecting regional disparities in income and the local industry structure, but also differences in the capacity of regional ecosystems to absorb and diffuse new technologies (OECD, 2020[9]). London and the South-East lead on the adoption of most technologies, while the North-East shows relatively low adoption levels across most technologies. Since 2021, the use of AI and AR/VR has risen across all regions, while the adoption of several mature technologies looks stable or even on a slightly downward path, which suggests a scenario of saturation or shifting priorities. Among the devolved nations, Scotland shows consistently higher adoption across the five technologies covered in Table 2.1, while Wales and Northern Ireland display lower uptake overall, particularly for ERP and business software (accountancy and HR) (Mahmood, Ashgar and Kousha, 2024[4]).
There are also clear sectoral patterns. The manufacturing sector leads on the adoption of AI, robotics and automation, also showing higher ERP penetration; wholesale and retail trade are strong users of accounting software and ERP; while professional and scientific activities show notable AR/VR uptake (e.g., simulation and training) (Mahmood, Ashgar and Kousha, 2024[4]). A recent Enterprise Research Centre analysis based on the 2022 and 2023 waves of the Longitudinal Small Business Survey (LSBS) and a different sector grouping finds that adoption is highest in business services, while transport, retail and accommodation lag behind (Liñares-Zegarra and Wilson, 2025[10]).
Business ownership also matters. Women-led SMEs are on average weaker adopters, which is likely to reflect the industry distribution of women-owned businesses, underrepresented in manufacturing and high-tech sectors, while some ethnic-minority-led SMEs tend to be stronger adopters, although small subsamples and possible composition effects (e.g., sector mix) warrant caution in the interpretation of these results (Mahmood, Ashgar and Kousha, 2024[4]). In this regard, the use of larger samples in technology adoption surveys would allow the collection and breakdown of data across a larger number of categories, including firm (e.g., sector, size and location) and business ownership characteristics (e.g., gender, age, etc.).
References
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[7] Department for Business and Trade (2024), UK Innovation Survey 2023: Report, https://www.gov.uk/government/statistics/uk-innovation-survey-2023-report.
[5] Department for Science, Innovation & Technology (2024), UK Business Data Survey 2024, https://www.gov.uk/government/statistics/uk-business-data-survey-2024/uk-business-data-survey-2024.
[6] Enterprise Research Centre (2022), ERC Business Future Survey, https://www.enterpriseresearch.ac.uk/wp-content/uploads/2022/12/102049-ERC-State-of-Small-Business-2022-Final-Web-Verison.pdf.
[2] European Investment Bank (2020), EIB Investment Survey 2020 - United Kingdom overview, https://www.eib.org/files/efs/eibis_2020_united_kingdom_en.pdf.
[10] Liñares-Zegarra, J. and J. Wilson (2025), Technology Adoption and Productivity: Evidence from UK SMEs, https://www.enterpriseresearch.ac.uk/publications/technology-adoption-and-productivity-evidence-from-uk-smes/.
[4] Mahmood, S., N. Ashgar and K. Kousha (2024), “Investigating Disparities in SMEs Digitalisation.”, Enterprise Research Centre, https://www.enterpriseresearch.ac.uk/publications/investigating-disparities-in-smes-digitalisation/.
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[13] OECD (2025), ICT Access and Usage by Businesses, https://data-explorer.oecd.org/vis?df[ds]=DisseminateFinalDMZ&df[id]=DSD_ICT_B%40DF_BUSINESSES&df[ag]=OECD.STI.DEP&dq=.A.B1_B.._T.S_GE10%2BS_GE100&pd=2012%2C&to[TIME_PERIOD]=false.
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[1] OECD (2019-20), ICT Access and Usage by Businesses, https://data-explorer.oecd.org/.
[3] Oliveira-Cunha, J., B. Serra-Lorenzo and A. Valero (2025), Innovation through crises in the 2020s: Survey evidence on digital, AI, and net zero innovation in UK firms, https://cep.lse.ac.uk/pubs/download/special/cepsp50.pdf.
[8] Riom, C. and A. Valero (2020), The business response to Covid-19: The CEP-CBI survey on technology adoption, https://cep.lse.ac.uk/pubs/download/cepcovid-19-009.pdf.
← 1. These indicators predate the widespread diffusion of generative AI tools, including large language models (LLMs), from late 2022 onwards. Although there is no data for the UK after 2020, evidence from the EU shows that the use of AI in businesses with more than 10 employees rose from 5.98% in 2020 to 19.95% in 2025, with particularly strong growth in recent years (OECD, 2025[13]).
← 2. International comparisons of AI adoption should be interpreted with caution, as business surveys often rely on different definitions and question wording and are not yet fully harmonised across countries (Montagnier and Ek, 2021[11]) (Calvino and Fontanelli, 2023[12]).
← 3. The CEP-CBI survey sample includes 373 firms and spans sizes, sectors and regions; the authors also compare it to a representative UK business sample. They note, however, that it overrepresents manufacturing firms, firms outside London, and larger firms, so results should be interpreted as indicative rather than fully representative.
← 4. Note: LSBS-based adoption estimates are not always directly comparable across studies, as they can differ in wave coverage, the set of technologies captured, sample restrictions, indicator definitions and the use of survey weights.
← 5. The UKIS comparison uses multi-year reference periods, 2018-2020 includes 2020, so early pandemic effects may be partly captured in the baseline period.