Policymakers in Westminster are in the habit of sometimes overlooking businesses outside the Square Mile - and this has likely contributed to the problem. While economic supercentres, like the often-discussed Northern Powerhouse, were a move in the right direction, it’s clear that a more wide-ranging approach to nationwide SME productivity is needed to reach outside of urban hubs.
This could be helped if the Government worked more closely with Town Halls. When it comes to nurturing the seeds of business, the approach to productivity must be tailored to each region. Infrastructure also plays a big part, with the expansion of transport links and improving telecoms, traditionally ‘remote’ regions are becoming more closely tied to economic centres.
It’s also important that financial education and IT skills must be taught from an early age in schools. We must be the world leaders in innovation and to get to this point, small business owners need to be more aware of the financial landscape - education will be a huge driver in this.
Regionally, London has witnessed some of the highest growth in numbers of small businesses, up 41 pct, according to the report, that is as much as ten times greater than Northern Ireland.
London and the South-East share more than one-third of all small and medium businesses in the UK - even accounting for population, these regions still have a significantly higher SME density than other regions. That’s not to say there aren’t brilliant examples of activity outside of the capital and the home counties - areas such as Mid-Ulster, Newport and Barnsley have seen strong spikes in productivity.
Data also illustrates that areas with low business survival rates tend to have high productivity and vice versa. For instance, Watford has one of the lowest average five-year survival rates but one of the highest measures of productivity. In other words, while failure of individual businesses is dreadful, the dynamism of “creative destruction” is good for the economy.
The report clearly lays bare the vital role that SMEs have to play in the UK economy, but it’s especially important, as we negotiate our way through economic headwinds caused by Brexit, that all small businesses - regardless of region - are afforded the same bite of the cherry.
Policymakers in and outside Westminster can encourage parity by investing in vital infrastructure, but also making small businesses owners aware of the finance that is available to them. With access to the right sort of growth funding, SMEs have the ability to steer the economy through periods of economic uncertainty.