Small business productivity boost good news for UK economy
Since September, productivity in businesses has increased rapidly. As stated by The Office for National Statistics (ONS), output per hour has increased by 4% compared to the same quarter of the previous year. The last time it grew this fast, was in the final three months of 2005.
The pandemic has really pushed UK SMEs to improve their management practices and to invest in technology which is encouraging to see for both other small businesses and business owners as well as the UK economy in general. As SMEs make up 99.9% of private sector businesses, the growth of this sector, and supporting it, is hugely important for UK economy.
At this moment in time, Britain is slowly but surely catching up with other countries. The UK is about a fifth less productive than Germany, France and the United States but there is evidence of improvements coming, especially as restrictions are eased later in the year.
I believe that with the right changes made to their business models, SMEs will be able to make the difference to productivity moving forward. The sector as a whole, employs over 16 million in the UK and small businesses make up 99.9% of all private sector firms, highlighting their wider importance. Research by Be the Business revealed that 1,500 directors said there had been “widespread adoption of tech as [companies] respond to the pandemic” as well as a “focus on leadership and management”. Manufacturers in particular have “used the pandemic to make significant changes to their business”.
It’s great to see that SMEs have invested in their future and are looking to grow with new hires and investments in technology. In the coming months, an increase in productivity will allow them to grow which will be a big win for small businesses and the economy in general. Productivity has been a problem for a while but it’s good to see SMEs tackle it with resilience and ambition.
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