At a glance
- SME customers are increasingly using new technology within their businesses
- Technological advances are creating new opportunities
- We take a look at three technological developments affecting SME customers in 2016
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From smartphones to contactless payments, technological innovations are rapidly changing the way we live. But what are the most important technological developments influencing your SME customers in 2016?
We explore key technological advances relating to transport, manufacturing and security, that are affecting the UK’s small businesses.
Towns and cities across the UK, from Exeter to Newcastle, are introducing intelligent smart traffic management systems that use centrally controlled traffic signals and sensors to improve traffic flow. Congestion costs the UK economy an estimated £17 billion a year, and a 5% reduction in travel time could save businesses an estimated £2.5 billion annually.
Meanwhile, four UK urban areas, including Milton Keynes, have been given permission to trial driverless cars. While driverless cars once belonged to the realms of science-fiction, the UK government predicts that by 2025, the driverless cars sector will be worth £900 billion a year.
Transport is a major part of London’s Infrastructure Plan 2050, which looks at developments in the capital over the next 34 years. It is expected that £973bn will need to be spent on transport alone during this period to keep up with a rising population and number of people working in London. Proposals include a full 24/7 tube service to support London businesses and kinetic pavements that harvest the energy of pedestrians and turn it into electricity.
2015 has seen the rapid growth of 3D printing, which has been tipped by some to inspire the next “industrial revolution”. As we have previously reported, 3D printers can already be used to make everything from houses to food to medicine.
As well as manufacturing products themselves, SMEs could also benefit from the increasing number of customers who have 3D printers in their homes. Firms could offer their products as downloadable designs that people can print from home, and personalise to their tastes.
Experts predict that over the next five years, 3D printers will become 50% cheaper and 400% faster, making them a much more viable option for many SMEs.
Other manufacturing developments include:
- Smart factories – these are places where sensor technology is used to make manufacturing processes far more efficient – e.g. enabling machines to detect when they are at risk of breakdown and automatically shut down. While major corporations such as Jaguar Land Rover are leading the way on smart factories, experts say the declining cost of sensors could soon make smart factories a reality for SMEs too
- Robotics – increasing demand for automation of tasks is driving advances in robotics. Britain currently lags behind other countries in this area, with only 75 industrial robots used in manufacturing per 1,000 employees. However, the Bank of England’s chief economist has warned that as many as 15m jobs (nearly half of all jobs in the UK) are under threat of replacement by smart machines, and the Bank of America predicts that within a decade robots will have taken over 45% of all jobs in manufacturing. In fact some industries have already reached the crucial point where it is cheaper to employ a robot than a human. In the American, European and Japanese car industries, it now costs $8 an hour to employ a robot for spot welding, compared to $25 for a worker.
Safety and security developments
A Zurich SME Risk Index published early in 2015 found that one in six (16%) SMEs are using smart devices to monitor their business premises remotely, or they expect to do so in the next 12 months.
Smart security devices include cameras that can learn a user’s normal movements and send notifications to their smartphone if anything out of the ordinary is detected. They can also give the user a live video feed from their premises while they are away, and record such footage as evidence, if for example there is a break-in.
Smart burglar alarms use motion detectors to identify intruders and trigger an alarm, while also automatically calling or texting the user’s phone.
Other technological developments include:
- Drones – while commercial drones tended to be associated with aerial photography, they can also be used to improve security, for example, by pursuing an intruder or other suspicious person at a safe distance and reporting back to a control room
- Cloud computing – in today’s digital world, security isn’t just about protecting physical assets. SMEs are also changing the way they store sensitive business and customer data. Zurich’s SME Risk Index found nearly four in ten (39%) SMEs now use cloud computing, with a further 9% expecting to do so over the next year.
What brokers need to know
Your customers may be benefitting from some of the technological developments outlined above, but there will inevitably be risks to consider too. These risks could range from the blurred boundaries surrounding product liability that are associated with 3D printing, to the uncertainty about what might happen to an SME’s business data should its cloud provider close suddenly.
Brokers should discuss with customers what new technologies they may be using, in order to help them understand how and why they might be exposed to new risks.
For more information please speak with your local Zurich contact.