By Daniel Hunter

A business revolution will change the landscape for small and medium enterprises (SMEs) over the next 50 years, according to new research from leading insurer Zurich.

The challenges facing SMEs over the next five decades — from a massive increase in homeworking to driverless commercial fleets — will mean radical change to the way they operate and manage risk.

The new independent study canvassed the views of more than 1000 SMEs, and their views and predictions have now been assessed alongside the business vision of best-selling science fiction writer Alastair Reynolds.

His future look into the world of work predicts innovations and challenges including the end of traditional business centres, and the prospect of robotic workers becoming the odd-job men of the future.

Findings of the Zurich research include:

- One in seven say their entire workforce will be working from home in 2062
- 60% say artificial intelligence will eventually become our trusted workplace advisors in 50 years
- Half of SMEs say robotics will play a critical role in SMEs delivering services in 2062

SME Business Model of the future

The research found that over half (54%) of SMEs believe the high street as we currently know it will transform in just eight years, being replaced by a ‘virtual high street’ online. 70% believe traditional high street SMEs must radically change their customer experience to compete with online purchasing in 2020. While this may be the destiny for many SMEs, there are subsequent risks associated with conducting all business online. Nearly a quarter (24%) say they would be concerned about the lack of customer interaction and loss of personal relationships, followed by the threat of cybercrime (20%).

SMEs have predicted a similar outlook for the future shape of their business. In 50 years, 37% say traditional business centres will disappear, 24% say traditional distribution, such as freight vehicles, will vanish and 19% believe factories will die out.

SME Workforce of the future

One in seven (14%) SMEs predict the whole workforce (100%) will be working from home in the future, compared to only 27% of the SME workforce that is working from home today. Subsequently, over half (53%) of SMEs say that by 2062 people will no longer commute to work. Despite this, 37% believe that having their employees working from home will have a significant impact on their organisation, of which 16% go so far as to say the very nature of their business will completely change in 50 years.

While it’s increasingly likely that the SME workforce will be working from home in the future, the UK workforce will also be working later in life. On a positive note, nearly two thirds (65%) of SMEs see the ageing workforce as an opportunity for their business to retain talent and experience, compared to only 21% who stated it would be too risky for their business to employ an older workforce.

Inevitably, methods of communication between employees will also change. The research uncovered a dramatic shift in the ways we are set to communicate in the short-term (eight years) and long-term (50 years). For example, respondents viewed email as the primary tool for communication in 2020 (77%), but usage of email is expected to halve by 2062 (35%). Instead, emerging communication technology will prevail, with 68% of SMEs believing telepresence will be critical to business communication in 50 years.

SME Trading in the future

When looking at trading in the global economy, some of the biggest challenges to British SMEs today are marketing to new customers and foreign trade laws and regulations. However, in future, as the online business community continues to evolve, more than one third (35%) say international trade laws and sanctions are likely to be liberalised by 2062. And over a quarter (27%) believe SMEs will be able to trade anywhere in the world in 50 years, with no physical presence required.

Coupled with this, 51% say SMEs will be trading in one globalised currency in future, making overseas trade even more accessible. However, these global expansion opportunities also come with the realisation that the perception of some SMEs as 'UK’ companies may vanish as a consequence.

SME Production and Services in the future

Interestingly, the production and delivery of goods and services look set to change dramatically in the future. 29% of respondents predict we will all own a 3D printer in eight years, allowing us to order and print goods - this almost doubles to 54% in 50 years. Robotics will also play a critical role in SMEs delivering services at home - half of respondents (50%) say robotics will deliver SME services, such as plumbing, by 2062.

What’s more, robotics will also have a place in the high street. 52% say shops will be un-manned, replaced by robotics, and 51% say that products of the future will be transported via driverless fleets in 50 years. 59% believe artificial intelligence (AI) software programmes and services will play a critical role for SMEs in 50 years, with 60% citing that AI will eventually become our trusted workplace advisors.

Clearly SMEs are looking to embrace the future and harness technological advances, but more than one in three (36%) are concerned by the potential future changes that lie ahead and the long-term implications on their business. 50% admit that adopting new, advanced technologies, processes and services will be a significant challenge for their business in the next eight years. Despite this, nearly half (45%) remain optimistic that in future the economy will have more SMEs and their importance will increase.

“The UK’s SMEs are already embracing change on a daily basis, with developments in technology, demographics and globalisation having profound effects on their businesses. Our research has revealed that SMEs are predicting nothing less than a seismic shift in the business landscape of the future," Richard Coleman, Director of SME, Zurich, commented.

“Their predictions highlight some significant future opportunities, such as the opening up of overseas trade, the ability to reach new customers and lower fixed costs due to redundant business offices. Many of these changes are happening today and will only grow in the future.

"As SMEs embrace this brave new world, there are also unavoidable risks that must be considered so they can remain resilient and take full advantage of the emerging new shifts. While it is encouraging that a significant number of businesses recognise the challenges and risks that they will have to face, it’s even more heartening to see that nearly half remain optimistic, predicting not only SME growth but also their importance to the UK economy and community increasing in the future.”

Alastair Reynolds, leading Science-Fiction writer, added: "Many of us rely on technologies and systems that only a couple of decades ago would have seemed quite ‘science fictional’ — think GPS navigation tools, or powerful tablet computers. By the same token, there are technologies coming into usage now that in a few decades will become part of our everyday lives.

"Telerobotic devices already allow us to interact with environments that may be the other side of town, or thousands of miles away. Feeling physically present and embodied in a remote location - and being able to move around and speak to people - will offer a vastly more immersive experience than simply using a webcam or teleconferencing system. Have no doubt, these advancements, along with artificial intelligence becoming trusted workforce advisors and driverless fleets on the road, will be little short of revolutionary for the business world.”

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