- The Enterprise Research Centre (ERC) found small business growth in the UK has slowed over the last decade
- The ERC says growth has been hindered by Brexit, Covid-19 and geo-political tensions
- Report recommends the Government should focus on creating a framework that helps more small businesses to achieve growth, sustainability and resilience.
Small business growth in the UK has slowed over the last decade hindered by Brexit, Covid-19, and geo-political tensions, a new report by the Enterprise Research Centre has found.
The proportion of small firms that were expanding their workforce fell 40 per cent between 2012 and 2022.
The new report also warns the support available to small and medium-sized enterprises (SMEs) is also currently insufficient and too fragmented.
In particular, SMEs need more investment and support on exports, innovation, achieving net zero and supporting employees with their mental health.
The challenges that SMEs face were highlighted in the ERC’s 10th annual State of Small Business Britain report, which draws on a decade of research to create a manifesto for helping small businesses to grow.
The ERC’s core leadership and research team is based at Warwick and Aston business schools and work in partnership with experts in the field of small and medium-sized enterprises (SMEs) and enterprise research based in a range of other institutions.
The report shows that SMEs have shown remarkable resilience throughout the many challenges they have faced and a small number have achieved impressive growth and increased productivity as they identified opportunities in the midst of uncertainty.
However, it warns that the government should not concentrate on a small proportion of exceptional high growth firms or celebrating the number of new businesses entering the market. Instead it should focus on creating a framework that helps more small businesses to achieve growth, sustainability, and resilience.
Stephen Roper, director of the ERC and professor of enterprise at Warwick Business School, said:
“It is often stated that small businesses are the backbone of the UK economy, and rightly so. Small businesses make up more than 99 per cent of the business population and account for around 50 per cent of jobs.
“Our research underlines the enormous changes these small businesses have had to deal with over the last decade.
“We have seen rapid advances in technology and growing pressure for action on net zero alongside the substantial challenges posed by Brexit, the Covid-19 pandemic, and cost of living rises.
“All of this has placed tremendous pressure on small businesses.
“As we move into a General Election year, we need a coordinated effort from government and business organisations to help small businesses face the future with confidence.”
Mark Hart, deputy director of the ERC and professor of small business and entrepreneurship at Aston University, said:
“Amid all the challenges, we have seen plenty of evidence that small businesses can be adaptable in a crisis.
“The UK government spends a significant amount of money on interventions to help small businesses each year.
“It is vital that these funding decisions are based on solid evidence, such as those outlined in our report, to ensure policymakers provide small businesses with the tailored support they need.”
To read the full report, click here.
- Notes to Editors
About Aston University
For over a century, Aston University’s enduring purpose has been to make our world a better place through education, research and innovation, by enabling our students to succeed in work and life, and by supporting our communities to thrive economically, socially and culturally.
Aston University’s history has been intertwined with the history of Birmingham, a remarkable city that once was the heartland of the Industrial Revolution and the manufacturing powerhouse of the world.
Born out of the First Industrial Revolution, Aston University has a proud and distinct heritage dating back to our formation as the School of Metallurgy in 1875, the first UK College of Technology in 1951, gaining university status by Royal Charter in 1966, and becoming The Guardian University of the Year in 2020.
Building on our outstanding past, we are now defining our place and role in the Fourth Industrial Revolution (and beyond) within a rapidly changing world.
For media inquiries in relation to this release, contact Sam Cook, Press and Communications Manager, on (+44) 7446 910063 or email: s.cook2@aston.ac.uk
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