At a recent FSB conference, the Prime Minister announced the Governments pledge to cut red tape, which is hindering the growth of the UKs small businesses.
We welcomed this news, particularly as a growing technology business based in the heart of London, but urge the Government to go further and work smarter in order to support SMEs.
With an estimated combined annual turnover of 1,600bn, SMEs account for 48.1 per cent of private sector turnover – according to the FSB – and, as such, are the backbone of the UK economy.
In order to expand this sector even further there are two key areas in particular that the Government, large and small companies should focus on: business collaboration and digital education.
Recent campaigns such as Startup Britain are a great example of the Governments push to raise publics awareness of SMEs and encourage them to realise their potential by providing tools, advice and financial support to small business and budding entrepreneurs.
However, as the results of the initiative demonstrate, the focus should not just be about a single issue such as reducing red tape, tackling business rates or creating a PR buzz around the topic though these are all part and parcel of on-going success in todays economy but on business collaboration.
Government and companies must encourage each other to collaborate more effectively; that is, businesses working collectively to offer services not only to their customers but to each other in order to grow.
As an example, the idea of collaboration or of a “sharing economy”, is brilliantly portrayed by The Make District, a collection of artists who, spurred on by a series of lacklustre craft fairs, decided to combine their efforts to aid their local, burgeoning art scene. From official website creation and social media activity through to organising their own stands, they managed to extend their network far beyond the North West, sharing ideas and resources.
This is a great example of how small businesses can share ideas and each day we see more and more sites offering a new platform for SMEs to sell their unique products, such as notonthehighstreet.com.
In addition to SMEs supporting each other, however, it’s extremely important to create a collaborative eco-system in the UK, where large companies partner and support SMEs, either through advice or financially. It should also be an environment where consumers support small and local businesses, such as Small Business Saturday, and where more serial entrepreneurs share their wisdom with new and growth businesses through bodies and initiatives such as Startup Britain or Enterprise Nation.
A truly collaborative, sharing economy is the way forward for SMEs, no matter what sector they work in or whether they are a start-up or established company.
In addition to business collaboration, digital education is a crucial factor in helping SMEs prosper. Being on-line used to be a nice-to-have, but it is now essential, with a global marketplace providing further opportunity for expansion.
To tap into that market, SMEs are becoming more digitally savvy in order to reach new audiences and customers. Yet a report from last year on Britains Digital Opportunity shows that 36% of SMEs in the UK have no website and, of the 64% of SMEs who do have a website, 15% of them have no functionality beyond simply being a source of information.
Its clear that there needs to be greater emphasis on digital education, from school teachers providing the basics of coding in class, through to accessible and affordable expert advice from established technology businesses in workshops and seminars.
The good news is that it’s becoming more readily available.
For example, Code.orgs initiative is providing people with the tools to become expert coders and, whats more, this has now been put into practice in the UK; from September of this year schools across England will have to teach computer programming to children from the age of five years. The potential for the country could be enormous, with increasing quality and quantity of domestic businesses that have a solid digital understanding, confidently entering a global marketplace.
As businesses in the UK are getting more confident, it would be good to see more focus, encouragement and investment in SMEs who are getting themselves online and using technology to help their businesses grow. Through supporting collaboration and encouraging education we can help businesses flourish and, in turn, boost the UK economy.