Microsoft said UK firms risk losing their competitiveness because of the impacts of the coronavirus and Brexit.
The tech giant was “ringing the alarm bell” after it said almost half of companies are struggling to remain competitive.
New research by Microsoft, alongside academics at Goldsmiths, University of London, showed that 46% of UK companies have seen turnover slide by at least 5% this year.
It warned that this group of companies are “financially vulnerable and not prepared to face the future”, calling for them to speed up the integration of new technology.
The research found that more than 54% of UK organisations surveyed have seen a decrease in revenue this year compared to last year, with 22% experiencing a drop greater than 15%.
It also reported that 22% of companies said they had to scrap an existing business model within days of entering the UK’s first lockdown.
Clare Barclay, chief executive officer of Microsoft UK, said: “Buffeted by the headwinds of pandemic and Brexit, the nation’s collective competitiveness is being put to the test like never before.
“Today, we are ringing the alarm bell, as our research reveals that half of organisations will struggle to adapt.
“The tech intensity that was starting to gather pace before the pandemic struck has become turbocharged – to keep up, leaders must act decisively and quickly.
“Small changes in approach to investment, people and technology can quickly boost the UK’s competitiveness, giving our economy the best chance of success in the post-Covid and post-Brexit era.”
Roxanne Morison, head of digital policy at the CBI, said: “The UK has a long tail of low-productivity firms which face challenging times ahead without changing their business model to suit the digital age.
“If we got those companies confident in using cloud, confident in using digital marketing systems, confident in using data, the positive impact on our productivity would be significant.”