The Vital Role of Small Businesses in the Economy and Beyond
GRANTfinder recently attended the webinar ‘Could small and medium size businesses be the key to sustaining the economy and our communities?’ which formed part of the 2020 Aspect network annual event.
Supporting organisations that are seeking to advance commercial and business opportunities from social sciences research, this year’s Aspect programme ran as a series of webinars expanding on the theme of ‘Building prosperity and wellbeing through social science innovation’.
Featuring a panel of contributors drawn from the university, finance and business support sectors, the SME webinar offered practical insight and learning points, focusing on the following areas:
COVID-19 has stimulated innovative thinking
Being smaller gives SMEs greater agility than their corporate counterparts. While large organisations may be advanced in terms of the resources they can drive into business development and marketing, those at the other end of the scale can more rapidly adjust in response to changing customer needs. Many small businesses – particularly those with an online store and home delivery offering – have been able to retain customer loyalty and thrive during the coronavirus pandemic by taking a transparent and personal approach. However, this principle applies beyond anything necessitated by an emergency. At the best of times, SMEs are the most radical change-makers, supplying the economy with a steady stream of new ideas and innovation. As well as giving the marketplace vitality, they also create a group of skilled and semi-skilled workers to support future industrial and business expansion in the country.
Diversity equals opportunity
The webinar panel commented on how the startup ecosystem needs to better nurture inclusive business growth by improving access to support for women and underrepresented minorities. While there has been increased focus on investments to women and minority-led startups with the creation of dedicated funds for these entrepreneurs, inclusive investment is still not standard practice across the sector. The benefits of increasing support in terms of not only the types of business that can access finance but also helping people from a wider range of backgrounds are manifold. An increase in diverse support will enable a greater number of people to see their lives and values mirrored in businesses’ offering, and therefore feel more connected to their products and services. Advances in technology coupled with new ideas are allowing entrepreneurs to identify gaps in markets and set up SMEs to capitalise on them. In this respect, small businesses have almost limitless potential.
SME success has positive community benefits
Several panel participants commented that small businesses are often naturally embedded in local communities. It has been noted that SMEs disproportionately employ those who face barriers when finding work. What is more, people equipped with entrepreneurial skills and an understanding of local issues are often leaders who are also supporting social initiatives in their towns and cities. Given there are some 5.9 million SMEs in the UK, when what is happening at a high-street level is considered on a national scale, it is easy to see the value of SMEs to the economy. However, in building on a close relationship with their communities, increasing employment and skills, social enterprise and social inclusion, small businesses’ contribution goes beyond the purely economic.
Business support is out there
With their great adaptability, SMEs are recognised as being vital to the UK economy. The government has identified that they could be the key to increasing the country’s productivity, which has continued to fall in recent years – an issue that has climbed up the agenda as the UK looks to recover from the shock of coronavirus. Specific COVID-19 resilience funding, such as the Bounce Back Loan and Kickstart schemes, has been rolled out as the pandemic has progressed. Beyond these emergency measures, however, support was already being expanded through bodies such as Growth Hubs in each Local Economic Partnership area in England, and similar initiatives in the rest of the UK. As such, there has been more investment in funding to support business, particularly outside London and the South East. Together with financial support such as Start Up Loans, the webinar panel were keen to highlight other types of assistance provided by Growth Hubs and banks and the benefits of receiving mentoring, whether from bank-based experts or business development bodies.
Because they are often more customer-orientated and creative in working their way around obstacles, small businesses are more likely to survive economic downturns. Together with their contribution to positive social change, it is clear that the UK must tap into the latent power of entrepreneurs in the next wave of business expansion.
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