This is the main takeaway from a new NatWest Bank report, A Springboard to Recovery, that shows that the UK’s 1.4 million SMEs represent a powerful engine of prosperity, with the potential to deliver as much as £140 billion to the UK economy by 2030 – and to create 3.2 million jobs. But at present the promise remains unfulfilled, suggests the findings. SMEs are significantly less productive than larger firms and the structures designed to promote their growth often fall short of their goals. Only a fraction of small businesses take part in support programmes, and even fewer see real productivity benefits as a result.
The bank’s research, based on surveys, reports, interviews and focus groups, shows that the greatest gains can be found in five areas: SME productivity, scaleup density, Black, Asian and Minority Ethnic representation, female entrepreneurship, and sustainability.
If SMEs are nurtured in all of these, there could be rich prizes for the UK economy.
Personalisation has emerged as the key ingredient for any SME support programme: diverse SMEs require tailored solutions to strengthen their productivity and accelerate their growth.
As a result of the study NatWest is investing £6 billion in SME growth across diverse communities, setting up new partnerships with Business in The Community (BITC), Hatch and Digital Boost, to empower underrepresented entrepreneurs and communities, embedding new skills and technology.
“The findings of this report have shown us that SMEs are not a homogenous group, and that support available across the UK needs to be more closely tailored to their specific needs,” says NatWest Business Banking head Andrew Harrison.
“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.
“In recognition of that, NatWest is partnering with both the UK Government on the ‘Help to Grow’ programme, and with partners like Hatch and Digital Boost, to support future and existing SMEs with expertise and advice on how to get to that next level.
“Combined with an additional £6 billion of targeted funding, we are confident that these initial steps will help us unlock the growth for the business success stories of the future.”