Technology Trends for 2026 and Beyond

In Part II of our series, we focus on Technology Trends facing small and midsize businesses (SMBs) in 2026 and beyond. While AI touches every part of technology, we will cover it more extensively in our AI Special Report (Part III of this series).

More in this series

Part I: Social and Workforce Trends for 2026 and Beyond

Strategic Technology Leadership

Technology is increasingly central to business strategy and execution. Yet 46% of business leaders are “frustrated” by the limitations of their company’s technology. Under growing scrutiny, IT leaders are expected to deliver deeper impact across their organizations.

IT departments must manage complex choices and trade-offs that support competitive advantage. Technologists are expected to deliver value to every department, enabling everything from email support to advanced AI solutions.

This puts stress on small and medium-sized businesses (SMBs) who do not have the financial wherewithal to fund expansive IT departments and lofty budgets. The undercurrent within this narrative is that AI adoption is exploding, and SMB owners and CEOs must bring new skill sets to bear in IT and throughout their organizations if they are going to take advantage of emerging technologies.

This shocking McKinsey graphic illustrates the sudden shift in interest and investment, away from emerging technologies such as quantum computing and immersive technologies and toward AI.

Source: McKinsey Technology Trends Outlook 2025

SMB Tech Spending: Benchmarks and Priorities

Small and medium-sized business (SMB) technology budgets are on the rise. Roughly three-quarters of SMBs report spending more on IT this year. While the average spend will be 5% higher, the top 25th percentile will spend roughly 20% more, creating a set of haves and have-nots.

This reflects a recognition that digital tools are essential for growth and competitiveness. Where is this money going? Many companies are adopting a hybrid IT strategy, maintaining some on-premise systems but also shifting a significant portion of spend to cloud services. Within these budgets, cybersecurity stands out as a top priority and growing cost. Cyber defense is often outsourced, and roughly equals internal IT labor spend.

Percentage of IT Spend

Source: Spiceworks Ziff Davis – State of IT

Many SMBs are investing in both AI and cloud-based software (from CRM to ERP) to streamline operations. Many tech leaders are looking to leverage AI tools within their existing technology stack. This is a paradox of AI (to be covered more extensively in our Special AI report). It requires more accurate data, but also makes systems easier to integrate. 75% of companies that implement AI report higher spend on data management this year.

SMBs generally favor cost-effective, easily compatible solutions — technologies that integrate smoothly with existing systems. Yet this often requires specialized talent ranging from Python developers to data scientists and at compensation levels higher than many SMBs were historically willing to spend.

IT Spend % of Revenue by Industry

Source: Spiceworks Ziff Davis – State of IT

Cyber Defense

How much should you spend on cybersecurity? There’s no universal answer. On average, companies dedicate about 11% of their IT budgets, but investment depends on the value of the data a company is trying to protect. A bank holding sensitive financial records invests far more than a construction company managing project files.

Blockchain tokenization is emerging as a powerful tool for transparency and data integrity. By creating immutable, verifiable records, blockchain reduces fraud and tampering risks. It’s already transforming finance and health care, where secure information exchange is paramount. For leaders, the takeaway is clear: cybersecurity must be a strategic investment. Spending wisely now protects your operations, reputation, and growth in the future.

The Emergence of Digital Twins

Digital twins are quickly becoming one of the most powerful tools driving innovation. A digital twin is essentially a virtual replica of a product, process, or system that allows companies to test, refine, and optimize — before making costly real-world decisions. For example, manufacturers use digital twins to model assembly lines, running thousands of simulations to predict bottlenecks and ensure product quality. In health care, digital twins of organs are used to test treatment outcomes without risk to patients.

The beauty of the approach is speed and precision. Instead of waiting weeks for prototypes, companies can instantly model “what if” scenarios, from changing supply chain routes to testing new car designs for safety. Gartner predicts that by 2030, digital twins will be central to more than 70% of product development cycles.

Autonomous Vehicles Entering Fleet Operations

Self-driving technology is advancing fast, with commercial fleets expected to see Level 3 autonomy by 2026-27 and Level 4 trucks on highways by 2028-30. For SMBs, the most immediate applications are practical and should demonstrate immediate ROI:

• Last-Mile Delivery – Restaurants and retailers are piloting Avs for local drop-offs, cutting labor costs and doubling as rolling ads.
• Warehouse Handling – Autonomous forklifts and tuggers reduce accidents and labor needs while scaling throughput.
• Simulation Tools – Affordable software lets SMBs test AV routes virtually, reducing mistakes and speeding launches.
• Geo-Fenced Shuttles – Resorts, hospitals, and campuses deploy shuttles in controlled areas, easing driver shortages.
• Public Service Contracts – Early adoption in sanitation, security, or landscaping fleets helps SMBs compete for municipal work.

Overall, AVs give smaller businesses a path to efficiency, branding, and growth without massive labor expansion. Note: We will cover driverless automobiles in the AI Special Report.

Smarter Equipment & Automation in B2B

SMBs in construction, manufacturing, and logistics are adopting smarter equipment to counter labor shortages and boost productivity. Robotics, IoT sensors, and AI now power many operations. Construction machinery features GPS-guided and autonomous controls, while robots handle repetitive tasks like welding or bricklaying, improving speed and safety. In manufacturing, Industrial IoT enables predictive maintenance: sensors monitor performance, and AI predicts service needs, reducing downtime. Electric models of forklifts and excavators are also gaining ground, offering lower fuel and maintenance costs with zero emissions. Once reserved for large enterprises, these technologies now let SMBs “do more with less.”

Data Privacy & Compliance

As technology advances, so does scrutiny from regulators and customers. New state and federal data privacy rules are reshaping how companies collect, store, and use information. In 2025 alone, more than a dozen U.S. states implemented GDPR-style laws, while proposed federal bills could standardize compliance nationwide. For SMBs, this creates both risk and opportunity. On one hand, compliance costs feel burdensome — managing consent systems, data retention and audit trails. On the flip side, building strong data governance can differentiate a brand, especially as larger customers demand more compliance and cyber-protection. SMB leaders should view privacy not as a “checkbox,” but as part of their value proposition.

Cloud & Edge Computing

Markets were rocked when Oracle’s enterprise value went up by $100 billion in a single day, reinforcing the importance of cloud technologies. Cloud infrastructure is now one of the largest SMB tech investments.

The surge of AI adoption has accelerated demand well beyond data centers and chips, pushing firms to expand entire cloud stacks. For SMBs, cloud offers flexibility — scaling resources up or down without major upfront costs. Yet expenses can escalate quickly if not managed carefully. Companies are increasingly using multiple providers for redundancy and negotiating usage-based contracts. For SMB leaders, mastering cloud use is essential to unlocking AI-driven productivity and maintaining competitiveness.

While cloud dominates the conversation, edge computing is quietly reshaping how businesses handle data. By processing information closer to where it’s generated — whether that’s a factory floor, delivery truck, or retail store — SMBs can reduce latency, cut bandwidth costs, and boost resilience when connectivity falters. For example, a construction company can run real-time safety analytics on-site without waiting for cloud servers; a retailer can manage in-store personalization even if the internet drops. Analysts expect global edge spending to surpass $300 billion by 2026.

Ultra-Connectivity

Advances in 5G, emerging 6G, Wi-Fi 6 and 7, and satellite networks are transforming digital infrastructure. These systems deliver faster speeds, lower latency, and broader coverage, creating new opportunities for SMBs. Logistics firms use connected sensors to track shipments in real time; manufacturers deploy robotics guided by ultra-reliable wireless; health care organizations explore remote diagnostics. The promise of 6G — speeds 100x faster than 5G — could power AI and IoT at scale. Yet the challenge lies in infrastructure costs and ensuring compatibility. For SMBs, the shift toward “always-on” ultra-connectivity is no longer optional; it’s a baseline for efficiency, innovation, and long-term competitiveness. Connectivity will accelerate other technology.

AR & VR Technologies

Virtual reality hasn’t lived up to the hype. Yet progress in haptics is reinvigorating the field, making experiences more immersive. SMBs are exploring practical use cases: construction overlays for job sites, retail showrooms where customers “try” products virtually, or health care applications in training and therapy. For SMB leaders, the approach should be cautious experimentation: pilot small, evaluate ROI, and be ready to scale once the ecosystem matures. The payoff could be significant.

In Conclusion

Heading into 2026, technology will continue to level the playing field for smaller companies — but also raise the stakes. SMB leaders should keep a strategic eye on tech developments and be ready to adopt strategies that will strengthen competitive advantage. But to do so will require building technology teams that can keep pace with the rate of change.

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