A new report from the Enterprise Research Centre (ERC) reveals that the growth of small businesses in the UK has experienced a significant slowdown over the last decade. The study attributes this deceleration to the combined impact of Brexit, the COVID-19 pandemic, and geopolitical tensions.
The report highlights a 40% decrease in the proportion of small firms expanding their workforce between 2012 and 2022. It also underscores concerns about the current inadequacy and fragmentation of support available to small and medium-sized enterprises (SMEs).
In particular, the report calls for more substantial investment and support for SMEs in areas such as exports, innovation, achieving net-zero targets, and addressing mental health challenges faced by employees.
These findings are part of the ERC’s 10th annual “State of Small Business Britain” report, drawing on a decade of research to formulate a manifesto aimed at fostering the growth of small businesses.
The ERC, with its core leadership and research team based at Warwick and Aston Business Schools, collaborates with experts in SMEs and enterprise research from various institutions.
While acknowledging the resilience demonstrated by SMEs amidst challenges, the report cautions against government concentration on a select few high-growth firms or merely celebrating the influx of new businesses. Instead, it advocates for a comprehensive framework to support more small businesses in achieving growth, sustainability, and resilience.
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Stephen Roper, Director of the ERC and Professor of Enterprise at Warwick Business School, emphasised the need for a coordinated effort from the government and business organizations, stating, “As we move into a General Election year, we need a coordinated effort from government and business organisations to help small businesses face the future with confidence.”
Mark Hart, Deputy Director of the ERC and Professor of Small Business and Entrepreneurship at Aston University, emphasized the adaptability of small businesses in times of crisis. He stressed the importance of evidence-based funding decisions to ensure policymakers provide tailored support to meet the diverse needs of small businesses.