This weekend, thousands of firms across the country will celebrate Small Business Saturday, a day where the public are encouraged to shop local and support the independent businesses in their area.
It’s a fantastic campaign that really showcases the value that small businesses bring to both local communities and the UK economy. But these companies deserve more than just one day of recognition, and Government must put their growth at the centre of its plans.
This is no small task, given the current economic context. With such a complex set of issues to tackle, it was encouraging to hear the Prime Minister speak plainly about the drivers of growth during his speech at the CBI Conference last week.
Mr Sunak faced up to the fact that, if we want to see strong economic returns, in the long run, there’s one obvious place to start: resuscitating our flatlining productivity.
Since 2008, the UK has had an average annual growth in output per hour of just 0.2%, compared to 2.5% in the previous decade. If you’re looking for a metaphor, consider the humble lightbulb. Traditional halogen bulbs waste a lot of energy on generating heat in addition to light, which is their primary function. Conversely, a 5w LED bulb can exceed the illumination of a 50w halogen bulb, consuming less input in return for an equal – or greater – output. Small Business Saturday should serve as something of a lightbulb moment. This lack of efficiency has a real-world impact: data from the Office for National Statistics found that the average worker would be £5,000 per year better off if we had continued our pre-2008 trajectory.
The good news is that improving the nation’s productivity isn’t such a ‘puzzle’ as it’s often described and there are some proven solutions the Prime Minister could adopt to drive a higher performing economy.
Firstly, we must create a nation of first-class managers. Our latest Productive Business Index found just over half of all small business leaders think their management teams are equipped with the right skills. This should not be a surprise considering how many workers end up in managerial roles without any form of training. Data from CMI found that as many as four in five bosses are ‘accidental managers’, that’s 2.4 million people in a leadership role without adequate training. Building on programmes such as Help to Grow: Management, announced in March 2021, is much needed.
Secondly, we all must switch on to the importance of technology and digital tools. During the early stage of the pandemic, Be the Business found that three years’ worth of technology innovation occurred within just three months as businesses adopted new ways of working and serving their customers. In our most recent Index, we found that the rate of adoption has slowed, with businesses embedding basic technology ahead of more sophisticated products. It’s important that more firms get to grips with things like data analytics. As intimidating as that may sound, capturing and understanding data can make it easier to take investment decisions. Government can help by supporting businesses which lack confidence in tech and ensuring our education system equips our young people with digital skills that set them up for success.
Finally, support and resources must be easy to find and access for our time poor business leaders who frequently rely on luck to find what help is available to them. It should be as easy as punching your postcode in to find which government-backed support you are eligible for.
This is my unsolicited advice to the Prime Minister and Chancellor, but the truth is that they’re only part of driving the productivity agenda – the UK as a whole needs to work together on generating a lightbulb moment for our productivity outlook. At Be the Business, we see first-hand the remarkable, innovative spirit of business leaders every day and so I encourage others to be inspired by their peers and learn from those within their networks. As such, it is not just the Government that must be up to the challenge, but every single business leader.
And if you’re heading out to buy some Christmas gifts this weekend, remember to shop small.
By Anthony Impey, MBE
CEO of Be the Business