Inflation concerns continue to challenge 2 in 5 UK businesses, reveals Zoho study
Press Release by Zoho Fri 19 Jan 2024
A recent Zoho Digital Health Study has highlighted that 39% of UK businesses are still grappling with high inflation as a primary concern.
This challenge comes as businesses attempt to navigate through a landscape marked by rising costs, inflationary pressures, disrupted supply chains, and the great resignation.
Despite these concerns, 55% of businesses remain optimistic, believing the UK is past the worst of macro-economic factors affecting businesses.
However, with inflation at around 4%, significantly above the Government’s 2% target, almost half (45%) of the businesses surveyed are apprehensive about the economic outlook.
Technology Investment in the Face of Economic Challenges
The impact of inflation is evident, with 68% of UK businesses limiting technology investments this year due to increasing interest rates set by the Bank of England.
Yet, businesses are strategically planning to invest in key areas like customer experience (CX), employee experience (EX), artificial intelligence (AI), and data privacy. Despite budget constraints, 67% of respondents are either already using AI or planning significant investments in this area.
Sachin Agrawal, Managing Director at Zoho UK, said: “Business confidence has taken a beating over the past few years, so it is no surprise that many are still concerned about the stability of the UK economy.
“It is interesting to see priorities shifting around technology and data privacy as businesses focus on becoming more resilient,” he added.
Data Privacy and Protection a Top Priority
As technology investment and adoption remain focal points for businesses, 30% of respondents identified data privacy and protection as a top business priority. This emphasis ensures technology is used safely and responsibly.
“Quite rightly many are looking to future proof their businesses against the economic permacrisis which continues to create turbulence,” added Agrawal.
Agrawal emphasised the importance of digital transformations and the role of technology in fostering business resilience.
“A data-driven business can use real-time and extensive insights to make the right decisions … However, for technology such as AI to be adopted successfully, businesses need to adopt it with customer trust in mind,” Agrawal added, highlighting the importance of automation, forecasting, and improved customer service.
With just 19% of UK companies found to have good digital health, the study serves as a wake-up call on the impact of digitisation on business performance. In a market facing tough competition and various economic challenges, the focus on digitisation is crucial, with risks too high to ignore.
“Companies that invest in the right technology will enjoy a strong return on investment while those who ignore the importance of digital transformations will risk becoming stagnant,” said Agrawal.
A Call for UK Government Support in Tech Innovation Amid Inflation Concerns
Amidst these challenges, 57% of businesses agree that the Government should provide more funding to businesses developing innovative technologies.
This indicates a strong demand for increased business support as the UK strives to become a tech superpower. The study’s release follows recent economic updates from the Office for National Statistics, which noted a 0.3% contraction in the economy in October.