Publication
Technology Adoption and Productivity: Evidence from UK SMEs
Published: 5 November 2025
ERC Research Paper No 119
Associated Themes
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Innovation -
Productivity and performance
Small and medium-sized enterprises (SMEs) account for about 99% of the UK business population and 60% of private sector employment. However, their productivity lags behind that of larger firms, which in turn generates a persistent drag on the overall economy. The introduction of innovative technologies has the potential to address this productivity gap. However, depending on the type of technology and how it is bundled, the productivity benefits could be substantial or provide only limited or no gains.
In this study, we utilise the latest waves of the Longitudinal Small Business Survey (2022–2023) to provide new empirical insights into how the adoption of six types of production-enhancing technologies (artificial intelligence, robotics, and automation (AIRA), Cloud Computing, business intelligence and analytics (BI), computer-aided design (CAD), Virtual/Augmented reality (VR/AR), and the Internet of Things (IoT)) influences the productivity of SMEs in the UK
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