An in-depth analysis of small business over the last decade has revealed a dramatic 40 per cent drop in the proportion of SMEs expanding their workforce.
The stark statistic is highlighted in The State of Small Business Britain report by the Enterprise Research Centre, an annual review of trends and issues affecting small businesses in the UK.
The report points out that the slow-down in small business growth in the UK between 2012-2022 is in part due to a combination of the effects of Brexit, Covid-19, and geo-political tensions.
The document also warns the support available to SMEs is 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.
Stephen Roper, Director of the Enterprise Research Centre (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 co-ordinated effort from Government and business organisations to help small businesses face the future with confidence.”
