Managing Digital Transformation in Post-Brexit Britain's SME Sector
Abstract
This study examined challenges facing UK small and medium-sized enterprises (SMEs) in managing digital transformation within the post-Brexit economic landscape. With 5.5 million SMEs comprising 99.8% of Britain's businesses, their digital adoption is critical for national productivity, yet only 9% had implemented artificial intelligence by 2023 and 43% reported no AI adoption plans. Through systematic desktop review of government reports and peer-reviewed literature (2021-2025), this research identifies barriers extending beyond financial constraints to encompass organizational culture, management capabilities, and skills deficiencies. Applying Technology-Organization-Environment framework and Diffusion of Innovation theory, findings reveal that digital culture, top management support, and internal capabilities exert greater influence than external financial support, with significant sectoral disparities evident. The COVID-19 pandemic and Brexit disruptions exposed fundamental differences between digitally resilient SMEs and those experiencing widening digital divides. The research concludes that effective digital transformation requires comprehensive approaches integrating technological infrastructure with organizational change, workforce development, and strategic alignment. Recommendations emphasize capacity-building initiatives, sector-specific roadmaps, holistic strategies, and coordinated national ecosystems to achieve the government's target of making UK SMEs digitally capable.
Keywords: Digital transformation, SMEs, post-Brexit, technology adoption, artificial intelligence, organizational culture, innovation management, United Kingdom
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