Startling productivity gap in the UK’s mid-market, with misalignment between IT and Business leadership at its core

The UK mid-market is the power engine that drives our economy and makes a significant contribution to the country’s GDP. But it is not fulfilling its full potential, putting jobs, expansion and, ultimately, the country’s growth at risk. That’s the stark reality uncovered by Node4’s newest piece of exclusive, independent research, Unlocking Growth in the Mid-Market: The Node4 Report.

The report finds IT and Business leaders are aligned on making business expansion and market growth their top priority for the next 12 months. Each group believes that investment in IT will improve efficiency, helping them drive growth and navigate the current global economic uncertainty. Over 80% plan to either maintain or increase IT spending and investment in response to current economic conditions.

However, Node4’s research exposes a significant divide on how that growth is to be achieved. This is the root cause of a productivity gap that is inhibiting the entire sector’s potential for growth, profit, and long-term stability.

For example, IT leaders are far keener to invest in automation and AI than business leaders. Yet neither group has understood or unlocked its full potential as a growth and productivity enhancement tool, and they are not thinking bravely enough about the technology. Just 14% of mid-market leaders (10% Business, 17% IT) cite gaining a competitive advantage as a reason to invest in AI. Furthermore, unclear ROI is reported as one of the top barriers to AI adoption. It’s cited by 36% of respondents and 40% of IT leaders. If they joined the dots and made a leap of faith, unclear ROI would not be an issue.

“It's clear that the mid-market is in flux,” comments Richard Moseley, CEO, Node4. “We have uncovered many positives and much potential within the mid-market. There is a desire for improvement, growth, and expansion - and a belief that technology is a key enabler for each. But we have seen areas of overconfidence, complacency, and lack of vision that inhibit the potential of new and existing technology to support these ambitions. This also feeds the productivity gap - a precarious situation in such uncertain economic conditions.”

Node4’s data points to complacency about cybersecurity and compliance. Nearly all mid-market organisations claim to be confident in their ability to prevent and respond to cyber-attacks. But our findings raise concerns that some of this confidence might be misplaced. For example, almost three-quarters of mid-market leaders think secure remote and hybrid work is a critical or high priority. However, only around a third have fully resolved data security risks associated with remote work. That being the case, where else could there be gaps and vulnerabilities?

In conclusion, Richard Moseley says: “By aligning technology investments with strategic priorities, mid-market organisations can navigate economic uncertainties, drive growth, and achieve competitive advantage. Our respondents' insights and data analysis provide a roadmap for Business and IT leaders to collaborate effectively, deploy emerging technologies, and build a prosperous future with the potential to power the UK economy and significantly contribute to the country’s GDP.”