UK micro-businesses and small to medium sized businesses (SMEs) who provide their employees with work phones are losing out on over one hour of working time per employee, per week, on average.

Poor connectivity means that staff cannot get online or complete work effectively. For medium-sized businesses, this equates to up to 250 hours of working time per week.

The lost working time for British micro-businesses and SMEs equates to reduced business revenues of c. £18.77bn a year on average, according to the research, and means that £7.7bn of output is potentially being lost to the British economy every year.

The research, conducted by by Three UK, in partnership with Development Economics and YouGov, concluded that the areas hit hardest were professional services – including legal, accounting and media businesses – and retail, which are two of the largest sectors in the UK economy.

The research found that professional services firms lost £5.3bn in revenue on average per year due to poor connectivity, accounting for an annual output loss of £2.8bn to the economy, while the retail sector lost £3.7bn in revenue per year because of poor technology, resulting in an annual loss of £560m in output to the British economy.

Cost of living and talent crisis

These figures come at a particularly challenging time for businesses. Amidst rising costs and inflation, almost three quarters (71%) of SMEs have been made more aware of areas where they need to reduce spending because of the cost of living crisis, with nearly a third of SMEs (32%) believing they are paying too much for phone contracts and looking to cut costs.

Simultaneously, nearly a third (29%) of SMEs are worried they could lose employees due to not having good technology. This figure rises to almost half (48%) amongst medium-sized businesses, which is especially worrying at a time where talent shortage is impacting most industries.

Lack of support

Having a strong online connection is vital for SMEs to operate and grow their businesses, with over a third (36%) believing that they could perform better if they had better mobile phone connectivity. Meanwhile, one in five SMEs (20%) are concerned that not knowing how to use the latest mobile phone technology could allow their business to be left behind.

A lack of support and knowledge are a barrier to adopting the latest technology for these enterprises, with almost half (48%) of SMEs stating that the technology industry uses complex technical language that they don’t understand.

Snehal Bhudia, Director of Business Propositions & Go to Market, Three UK, commented: “As the cost of living crisis continues to bite, it’s alarming to see that £7.7bn is being lost from the UK economy every year due to the poor technology stifling SMEs’ performance.

“Many technology propositions are aimed at larger corporate structures and fail to meet the needs of smaller businesses in a cost effective way.

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“Technology providers must therefore better tailor their services towards the needs of SMEs; ensuring their offerings are really simple, giving them the tools to understand what’s happening in their business and doing so with a level of service that’s usually only reserved for large corporates.

“At Three, we are investing more than £2bn+ in network technology to become the UK’s fastest 5G network and have recently launched Three Business Adapt to directly tackle these connectivity problems for SMEs. Business Adapt ensures that SMEs can reap the rewards of good technology, great service and unbeatable value, enjoying maximum growth and profitability as a result.”

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