Image credit: Financial Times
Small-and-medium-sized companies in the UK, including firms in the West of England, are facing a “big productivity and sustainability challenge”, according to a new report by NatWest.
The findings were published in the 2021 Small Business Report, an industry-wide review into UK SME recovery, which was carried out in consultation with the British Chambers of Commerce (BCC), and the Federation of Small Businesses (FSB).
The research of more than 1,000 UK SMEs, which will be shared with the Government as it develops its Help to Grow initiative, analysed more than 100 reports and support programmes globally to identify the barriers facing SMEs.
According to the report, the South West’s 562,545 SMEs (firms with 1-249 employees) are responsible for 48% of the region’s turnover and 49% of the region’s private sector employment, but productivity lags that of larger firms by 15%.
It found that SMEs often struggle to find support programmes tailored to their needs and that better-targeted and personalised assistance could unlock around £140bn into the economy - equivalent to around.400,000 new SMEs.
The report said growth could be achieved by:
- Transforming a greater share of SMEs into scale-ups – enterprises that grow by more than 20% year-on-year in turnover and/or employment for at least three years
- Increased female entrepreneurship and productivity of women-led firms
- Improving Black, Asian and Minority Ethnic workforce participation and career progression
- Driving an SME shift toward sustainability
In response to the report’s findings, NatWest has announced a series of interventions focused on scaling up micro businesses, unlocking the untapped potential outside London, and boosting skills and technology adoption.
These include a funding commitment of £6bn to support SMEs to scale and grow with £4bn of that allocated outside the capital; the creation of 30 local enterprise managers and 20 entrepreneur acceleration managers; and a commitment to help 10,000 NatWest customers to get the best training or growth opportunity.
The bank has also announced strategic new partnerships with Business in The Community (BITC), Hatch and Digital Boost, to empower underrepresented entrepreneurs and communities and embed new skills and technology.
Andrew Harrison, head of business banking at NatWest, said: “The findings of this report have shown us that SMEs are not a homogenous group, and that support available across the South West and the wider country need to be more closely tailored to their specific needs.
“We’re also seeing a continued disparity in the allocation of support and funding by gender, location and ethnicity. It’s the responsibility of our entire industry to help reset this balance to help all SMEs and by extension the UK economy to thrive again.”
Adam Marshall, director general of the BCC, added: “SMEs are the engine-room of the economy and their ability to bounce back and grow exponentially will be crucial to the UK as a whole as it emerges from lockdown.”
He added: “To boost productivity, SMEs need to be able to invest more in skills and digital innovation. Mentoring will also allow bosses to understand their companies’ needs and allow them to rapidly adapt to changes in the workplace and the market.”
Source: https://www.business-live.co.uk/economic-development/smes-facing-big-productivity-sustainability-20297128