Productivity performance in UK firms is weakening when compared with other G8 companies – according to a recent report Unlocking UK Productivity. But what could be the role of Small and Medium-sized Enterprises (SMEs) in addressing this challenge?
One possibility is for SMEs to internationalise and innovate to help drive growth – which increases productivity. In fact, SMEs that internationalise are three times more innovative. However, only 1 in 5 currently do so.
The report recommends we:
- Nurture the overall entrepreneurial ecosystem to encourage greater growth ambition among SMEs
- Expand appropriate forms of education to help build the UK’s entrepreneurial ecosystem
- Stimulate demand and support supply through debt and equity financing
Policymakers have a role to play in nurturing the entrepreneurial ecosystem and banks in providing finance. Interestingly, it is universities who are responding to the needs of entrepreneurs by providing innovative entrepreneurial education programmes. Two such programmes stand out:
- Goldman Sachs 10,000 Small Businesses:
Delivered over the last 5 years through 5 university partners, a revised programme is now recruiting for it’s second interation.
- City Deals Wave 2:
Run by Lancaster University Management School and delivered in 15 growth areas through local university partners.
Both programmes share a commitment to supporting entrepreneurs to increase turnover and jobs – all adding to productivity. But, perhaps more interestingly, particpants improve the quality and innovate existing systems, increase use financial data in decisions and become more confident in their own abilities.
So, its innovation, using money and confidence that seem to make all the difference.
Professor Nigel Lockett
Professor of Enterprise at Leeds University Business School