Businesses have rapidly adopted new technologies and new ways of working in response to massive disruption caused by the pandemic. If such innovation continues, it could boost Britain’s economy in the long term, according to economic researchers.
A snapshot survey by the LSE’s Centre for Economic Performance (CEP) and the Confederation of British Industry (CBI) finds that more than 60 per cent of firms had adopted new technologies or new management practices since the start of the pandemic. And more than 90 per cent of these firms said that they expected to keep the changes in place once the crisis is over.
The survey results feature in a new report The Business Response to Covid-19: the CEP-CBI survey on technology adoption, published by the CEP.
The report highlights the enormous impact of the pandemic on UK firms: more than three-quarters have seen demand for their products or services change; more than 40 per cent have had disruptions to their supply chains; and more than a third have been affected by employee absence due to illness or shielding.
Report co-author Capucine Riom, a PhD candidate at the LSE, said: “We find that firms that innovated prior to the crisis were more likely to innovate during it. Therefore, we believe that the widespread innovation witnessed during the pandemic, albeit forced, could translate into even more innovation in the future. We look forward to testing this hypothesis in our next survey.”
Report co-author Anna Valero, ESRC Innovation Fellow at CEP, said: “Almost all firms tell us they expect these new technologies or practices to raise the productivity of their workers or allow a reallocation of tasks, rather than replace them. This could lead to business growth and increased employment over time. But there are concerns about the uncertain economic outlook and the ability of smaller firms, in particular, to find the money in the short term to finance such changes. Our analysis suggests that there is a policy opportunity into recovery to address barriers to organisational innovation and improve productivity performance.”