To get the economy growing, we can’t leave small businesses on the sidelines

SPONSORED POST

As I chatted to some of the small businesses in my local area on Saturday, I was reminded that Britain’s 5.5 million small businesses are operating against the most challenging economic backdrop in memory. Traditionally during the festive season, shoppers focus even more on how they can support their small independent businesses, whether they’re on the high street or online, and that’s great.

Yet, despite being so integral to the economy and our local communities, more than a third of small businesses have seen their turnover decrease this year, even as we have emerged from the pandemic. Although businesses are feeling the pressure right across the spectrum, Mastercard research has revealed the striking fact that women business leaders and business owners from minority backgrounds are more likely to be feeling the effects of the economic slowdown.

Small businesses are facing difficult times and need further support. If we want to be ambitious for small businesses and invest in technology, skills, and productivity – as Keir Starmer set out at the recent CBI conference – small businesses must be placed at the centre of any policy plan to create economic growth that’s truly inclusive and helps improve living standards right across the country.

Mastercard conducts quarterly research to gain insight into the challenges small businesses face and what help they need. One recurring message has been the role of technology, with two thirds (61%) of owners saying it will only become more important to their business over the next five years.

Embracing technology such as digital payments, cloud software, and social media is crucial to helping businesses unlock cashflow, productivity and growth. Over a third (35%) of owners want to adopt more, but the pace of change in tech is holding them back, with many overwhelmed by the amount of choice. UK’s micro businesses will miss out on an estimated £827bn growth over the next five years if they are not supported to digitise.

And so, we’d like to see more policy support for the digital upskilling of our small and micro businesses, which recognises and supports the importance of mentoring and access to expertise for these businesses, who feel lonely and lack the capabilities on their own to face the challenge.

We think it’s vital there should be a specific policy focus on helping women and minority ethnic business owners; something that’s missing from the current business support landscape.

Late payments are also still holding small businesses back, so we’re also calling upon policymakers to pioneer digital payment technologies with small business suppliers across the parliamentary estate, to free up their cashflow.

Finally, now more than ever, we need a long-term vision for our towns and cities, for our local communities, and for the businesses that are the beating heart of our nation; this includes a plan focussed on the help our small and micro businesses need on their journey to net zero.

But not everything can be achieved by policy alone. Big businesses have a role to play too. Strive UK is a great example of how big businesses, civil society and the public sector can together help small businesses grow.

Working with partners – including Be the Business, Digital Boost and Enterprise Nation – it is enabling small businesses to face the tough economic environment head on. The programme has already helped more than half a million business owners – almost half of them women and minority ethnic business owners – through free guidance, digital tools, and personalised mentoring.

If we’re serious about making Britain fairer, greener and more dynamic – as set out by the shadow business team – small business can’t be left on the sidelines anymore. Only when we work together to unlock the potential of UK’s smallest entrepreneurs can we also supercharge growth and unleash the full potential of the economy.