A recent report by global business consultancy EY (Ernst & Young) named the UK as the best place in Europe to start, run and grow a business; coming second only to the US in the G20 rankings overall. Here we look at what big businesses in the UK can do to help take the country to the number one spot.
Britain has worked hard to become an entrepreneur-friendly country, especially over the course of the last Government – and it’s paying off. From the growing cult of the entrepreneur to recent policy changes aimed at supporting smaller firms, the UK is developing an increasingly competitive environment for SMEs, which now account for 99% of all enterprise activity in the market.
Viewed around the world as a country with a talented and skilled employee pool, relatively light regulation and a competitive tax system, the UK features highly as a destination for many entrepreneurs. Yet the country still comes second best to the US, particularly on key issues like access to finance.
With that in mind, here’s our take on what the UK needs to do to elevate itself to the number one position, and how big businesses can work with SMEs to make this happen.
1. Embrace and educate the SME sector
Innovation is the heart of small businesses and startups. Our recent research report, Collaboration Nation, highlighted this fact, with 65% of respondents feeling at that SMEs create more innovation in IT, engineering and technology than larger organisations.
Big business in the UK has a role in nurturing this creativity – educating SMEs and their employees to harness the power of their ideas. This comes through investment, in a monetary sense, as well as mentoring. While there has been a measure of improvement on this, it been focused on companies in the technology space. We need to widen this and ensure that all companies have access to a community of experienced entrepreneurs and business leaders to ensure the country’s future success.
2. Build positivity by reducing fear of failure
An area where the US is defiant in its outlook, the UK’s attitude to failure has long been seen as a weakness in its entrepreneurial outlook. This was repeated in the EY Barometer, which reported that just 13% of entrepreneurs in the UK said that business failure was seen as an opportunity for learning, much lower than the G20 average of 23%. The only way to deal with this is through open discussion amongst large businesses, talking about their failures and what they have learnt from them.
Finally, and perhaps, most simply, is the need for big businesses to work more closely with SMEs. This incorporates both of the points above, but also leads more widely in to discussion around joint pitches for large contracts.
This is an area where SMEs are keen to see change – 85% of smaller SMEs [made up of one to three employees] currently say they needed larger suppliers to help them win business, and 71% of the SME category say they’re planning to work with larger suppliers in bids to supply large organisations of Government departments in the next five years.
The US market is seen as the biggest competitor to the UK in regards to entrepreneurs; however, with a growing emphasis on the sector globally, we need to acknowledge areas of weakness and improve them, or risk falling behind fast growing emerging markets.
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