Funding gap looms over Britain’s small businesses

Record Numbers of Brits are Starting Businesses, but Innovation and Export Activity Among Small and Medium-Sized Enterprises Have Fallen to a Four-Year Low

The entrepreneurial spirit is alive and well in Britain, with record numbers of individuals taking the plunge and starting their own businesses. According to the latest State of Small Business Britain report from the European Research Council (ERC), 36 per cent of working-age adults in the UK are now running or starting their own businesses. This is an impressive figure and shows that the British people are not afraid to take risks and pursue their dreams.

The report also highlights the positive impact that these new businesses are having on the economy. They are creating jobs, contributing to economic growth, and bringing new ideas and innovations to the market. However, despite these positive developments, there are some concerning trends that need to be addressed.

One of the key findings of the report is that innovation and export activity among small and medium-sized enterprises (SMEs) have fallen to a four-year low. This is a worrying trend as innovation and export activity are crucial for the long-term success and sustainability of businesses. Without these elements, businesses may struggle to stay competitive and grow in the global market.

The decrease in innovation and export activity can be attributed to a number of factors, including the uncertain economic climate and the looming funding gap. With Brexit on the horizon, many businesses are facing uncertainty and are hesitant to invest in new ideas or expand their operations overseas. This is understandable, as businesses need stability and support in order to thrive and take risks.

The report also highlights the importance of access to funding for SMEs. It is concerning to see that the funding gap is threatening the growth of these businesses. Without adequate funding, businesses may struggle to innovate, expand, or even survive. It is crucial that the government and financial institutions work together to provide support and funding opportunities for SMEs, especially in light of the current economic climate.

However, despite these challenges, there is still much to celebrate. The report shows that the number of women starting businesses has increased, with 44 per cent of all new businesses being started by women. This is a positive sign of progress and diversity in the business world. It is also encouraging to see that more young people are starting their own businesses, with 18-24 year olds accounting for 10 per cent of all new businesses.

The report also highlights the importance of digital technology in driving business growth. With the rise of e-commerce and online platforms, businesses are able to reach a wider audience and expand their customer base. This has opened up new opportunities for businesses, especially for those in the creative and digital sectors.

In conclusion, while there are some concerning trends in the State of Small Business Britain report, it is important to focus on the positives and celebrate the entrepreneurial spirit of the British people. The record number of individuals starting businesses is a testament to the resilience and determination of the British people. However, it is crucial that the government and financial institutions work together to address the challenges faced by SMEs, such as the funding gap and the decrease in innovation and export activity. With the right support and resources, these businesses can continue to thrive and contribute to the growth and success of the UK economy.