Advanced Technology Adoption in UK SMEs : What is the effect of external knowledge sources and what are the productivity outcomes

Research Paper

Advanced Technology Adoption in UK SMEs : What is the effect of external knowledge sources and what are the productivity outcomes

Published: 5 November 2026

ERC Research paper No 125

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Longitudinal Small Business Survey

Advanced and emerging technologies (AET), including artificial intelligence (AI), robotics, automation, and virtual and augmented reality (VR/AR), have considerable potential to support firm innovation and productivity. Yet, adopting these technologies can be particularly challenging for small– and medium-sized enterprises (SMEs) due to greater resource constraints. External information and advice may therefore play an important role in helping SMEs understand, evaluate, and adopt these new technologies. This research paper examines the relationship between the use of external information/advice and AET adoption among a sample of UK SMEs. In particular, this report investigates whether firms using external information/advice are more likely to adopt AET, whether the motivations for using such advice and its sources matter for adoption, and whether AET adoption is associated with higher levels of labour productivity. The analysis draws on the UK Longitudinal Small Business Survey (LSBS) between 2018 and 2021 and an analytical sample of 8,732 firm-year observations, using regression analysis and propensity score matching.

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