SMEs around the world have seen confidence levels rise and economic outlook improve drastically in the 12 months to mid-2014.
The report ‘Back in the Game’ suggests that government policy and a more favourable investment environment have both had positive effects on UK SMEs.
Charlotte Chung, senior policy advisor at ACCA, explains: Globally, ratings of government policy have generally improved with the recovery, reaching positive territory in the UK for the first time. SMEs have become more confident about the sustainability of fiscal policy in the medium term, which is no doubt encouraging them to create jobs and to invest. The UK, along with Singapore and the UAE, had the most SME-friendly policies among the major ACCA/IMA markets in 2013/14.
The investment environment has also improved considerably for SMEs in the UK, but also globally. This has been driven primarily by more available capital and more profitable investment opportunities. Micro and small businesses have experienced the biggest funding boost, as finance finally reached those SMEs that were the most squeezed in the pre-2013 period of rationing and restraint. It was SMEs in the UK, the UAE and Ireland who saw the greatest all-round improvement in the investment environment.
SMEs are now seising new opportunities by embracing innovation, entering new markets and building strong supplier relationships. In ACCA/IMA’s first review, it was identified that mid-market businesses greatly contributed to economic growth, something which this second review has reinforced.
According to Raef Lawson, Ph.D., CMA, CPA, IMA vice president of research, Mid-market businesses are the most ambitious and ready for growth.
This group was the most likely to create new jobs during the 2013/14 period and reported the largest increase in job creation, more so than large corporates,” Lawson said. They also reported the largest net investment in staff development and greatest emphasis on job creation, highlighting a difference in resource prioritisation and allocation between mid-market business and micro, small and medium businesses.