Back in 2020, a House of Commons committee report noted that small and medium-sized enterprises (SMEs) are crucial to the UK economy both for wealth creation and for the people they employ. In addition, it reinforced the view of many economists that productivity growth is essential for promoting long-term economic growth and higher living standards.
Given this, it is no surprise that the MPs sitting on that committee concluded that it is vital that SMEs are given the best chance of succeeding and can contribute towards the UK’s productivity. However, three years on and with the world having faced a global pandemic, a European war in Ukraine, and inflation at levels not seen for fifty years, what is the current state of productivity within SMEs in the UK?
One indicator of this can be found in the latest edition of the Productive Business Index published by Be the Business, a body which brings together companies to improve small business productivity. The index is based on a survey of one thousand founders, owners and leaders of the UK’s SMEs which tracks changes in five areas of business activity namely management capability, technology adoption, training, development and human resources, operating efficiency, and innovation.
