Access to quality public infrastructure and skilled labour are among the factors entrenching the rural-urban divide among SMEs, new data has found. According to a new survey conducted by the British Chambers of Commerce, more than half (58%) of SMEs in rural areas said they do not have reliable and well-connected trains, compared to 39% of those in urban areas.
Poor rail networks have the biggest impact on SMEs in business, retail and industrial parks, with 51% saying they were not satisfied with current provisions. While 79% of firms in the countryside said they did not have access to reliable buses or trams, compared to 42% in towns, villages and high streets.
A lack of access to skilled labour is also impacting small and medium-sized firms. Almost two in three of SMEs did not believe their local areas had availability of appropriately skilled labour. In Wales, 61% of businesses have experienced difficulties in recruiting skilled employees.
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Firms in business, industrial or retail parks struggle the most with this issue, with almost three in four (72%) stating that they did not have access to appropriately skilled labour. This drops to 56% for firms based in urban areas.
The survey also found a rural-urban divide in terms of internet connectivity. While three quarters of SMEs overall agreed their areas had reliable broadband, this rose to 82% in urban areas but fell to 56% in rural areas.
In terms of a general business outlook, only half (53%) expect to see turnover growth in the next 12 months, while one in four (27%) expect turnover to shrink over the same period. In Wales, 48% of businesses expect turnover will increase over the next year, while 21% expect it to decrease.
Less than a third of UK SMEs plan to increase investment in technology, research and development. However, almost half of Welsh SMEs (47%) told Chambers Wales South East, South West and Mid in their quarterly economic survey that they saw new product innovation as an opportunity for business recovery and growth.
Paul Butterworth, interim CEO of Chambers Wales South East, South West and Mid, said: “This research shows that a significant rural-urban divide exists among SMEs, with rural businesses currently at a disadvantage compared to their urban counterparts across Wales and the UK.
“Investment is needed to improve public infrastructure and access to skilled labour to create equal opportunities to thrive, regardless of where a business is based.”
Alex Veitch, director of policy and public affairs at the British Chambers of Commerce, said: “Our research highlights the rural-urban divide that continues to exist between firms across the UK, with rural businesses generally reporting higher levels of dissatisfaction with the quality and availability of local resources.
“High-quality public infrastructure and access to a skilled labour force are both key to the success of a business, in particular SMEs, and today’s findings indicate that rural businesses are at a significant disadvantage. Government must urgently prioritise the development of public infrastructure. Such investment will not only enable local and small businesses to adapt and thrive, it will also create jobs and inject money into local economies across the UK.”
Jo Copestake, director of small business at Xero, said: “When small businesses are eventually able to pivot to growth mode, any recovery would be inequitable, as many rural small businesses don’t believe they have the same trading conditions as their urban counterparts. We can’t risk that the conditions for recovery are skewed in favour of businesses in certain locations, which would reinforce the divides that have hampered the nation’s full economic potential for so long.
“Small businesses are the backbone of our economy, and that means their roots are all around the country. We must create an equitable trading environment, where each and every business can access the digital know-how, connectivity and infrastructure required to build a healthy business.”
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