More positively, over half (55%) of respondents said they believe the UK is past the worst in terms of macro-economic factors that may impact businesses. However, as inflation currently sits at 4.6%, 2.4% higher than the government’s 2% target, almost half (45%) of UK businesses responding are still concerned by the economic outlook.

Feeling the impact of inflation, 68% of UK businesses surveyed have limited technology investment this year due to the Bank of England’s rising interest rates. Despite this, businesses surveyed still plan to direct investment into priority areas such as customer experience (CX), employee experience (EX), Artificial Intelligence (AI), and data privacy.

As businesses rebuild, many are rethinking their priorities. While budgets are tight, businesses are still seeing the benefits of investing in technology that will provide a good return on investment. For example, 67% of respondents said they are either using AI or are planning to invest heavily in it.

As technology investment and adoption continue to be a core business focus, it is no surprise that 30% of respondents cited data privacy and protection as a top business priority, to ensure that technology is being used safely.

Sachin Agrawal, Managing Director, Zoho UK, commented: “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. Quite rightly many are looking to future proof their businesses against the economic permacrisis which continues to create turbulence. It is interesting to see priorities shifting around technology and data privacy as businesses focus on becoming more resilient. 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.”

“A data-driven business can use real-time and extensive insights to make the right decisions to take advantage of opportunities and to reduce risk. However, for technology such as AI to be adopted successfully, businesses need to adopt it with customer trust in mind to deliver benefits such as automation, forecasting, or improved customer service, to name just a few examples.

The use of the right digital toolkit, along with the right leadership style, culture, and focus on customers and employees, can enable a company to increase flexibility, agility, and adaptability – all required to drive business resilience and innovation.

As just 19% of UK companies were found to have good digital health, it should come as a wake-up call to consider the huge impact digitisation can have on business performance.

In an increasingly tough market, with increased competition, increased customer and employee demand, and a myriad of negative external market-forces driving economic stagnation, digitisation must be a focus. The risks are too high to ignore.

As the UK strives for Tech Superpower status, 57% agree that the government should provide more funding to businesses developing innovative technologies, highlighting a call for increased business support.

The news comes following the latest economic update from the Office for National Statistics, highlighting that the economy shrunk by 0.3% in October.

*Methodology & notes

For this study, large businesses are classified as having 1000+ employees, medium businesses 250-999 employees and small businesses 25-249 employees.

Censuswide surveyed 1,531 Senior digital transformation decision makers (aged 18+) in firms with 25+ employees across the UK, France, Germany, Spain, and the Netherlands between 24.08.2023 - 31.08.2023. The UK sample consists of 306 senior digital transformation decision makers, evenly split across all three business sizes.