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27 November 2017

Industrial Strategy is first piece of productivity jigsaw

Responding to the release of the Government’s Industrial Strategy white paper ‘Building a Britain fit for the future’, Mike Cherry, National Chairman at the Federation of Small Businesses (FSB), said:

“Today’s publication marks the first phase of the journey to improve the UK’s productivity, leading to sustained wage growth and an improvement in living standards - but it’s essential we quickly move on to phase two.  

“We agree with the ambition to set clear ‘grand challenges’ for the UK economy and will be working with Government to ensure small businesses play their part in initiatives such as the Industrial Strategy Challenge Fund and the Small Business Research Initiative.

“However, this is only the first piece of the productivity jigsaw. To have a sustained and game-changing impact on the economy, the focus needs to be on how to improve productivity across the UK’s 5.5m small businesses and the self-employed. We are keen to take part in the announced review into improving the productivity and growth of small and medium-sized firms.  

“We welcome the recognition of the importance of supporting the spread and diffusion of innovation. But a lot more needs to be done to increase productivity by encouraging firms to adopt new to firm innovation into the heart of their businesses, as well as a fresh look at how regulation can support small business innovation of all types. These are the types of issues we want to see the SME review address.


International Trade

“Exporting is key to driving up the productivity of small businesses and therefore we welcome the review of export strategy, reporting in Spring 2018.

"One in five small businesses already export and there is the potential to double that number if the right support is put in place.  We had pushed for more help for SMEs in the Autumn Budget, and hopefully this process will lead to that help being provided, as we approach Brexit. Any review of exporting must have small businesses front and centre and not disproportionately focus on mid-scale and larger businesses. The review must deliver on the commitment to work with all of the private sector to ensure that all businesses receive high quality export advice.

“Import substitution represents a genuine opportunity for small businesses – but they will need help and support to improve their competitiveness to capitalise on this opportunity.

Skills and infrastructure

“We welcome the reinforcement of commitments to skills training, physical and digital infrastructure and access to finance, which will support productivity improvements in all small businesses. We are pleased to see the roll out of a network of British Business Bank regional managers by autumn 2018 to ensure businesses across the UK know how to access sources of investment.

Supply chain practice and learning from best in class

“We welcome the appointment of the Small Business Commissioner, and are pleased to see this acknowledged in the Industrial Strategy. To have an impact on the poor payments crisis that afflicts the UK economy, the office must remain tightly focused on this issue. 

"However, we do not think they alone can be the answer to improving supply chain practice. Sector deals must have best in class supply chain practice hardwired into their DNA and we will be pushing Ministers hard to ensure this. And we are supportive of initiatives such as ‘productivity through people’ where large businesses reach out to SMEs in their supply chain through a co-funded development programme.  

Clean Growth

“FSB welcomes the Government’s commitment to clean growth, including investment in the underlying infrastructure on which a future low carbon economy will rely. However, we urge the Government to provide clarity on the role that small businesses will play as consumers and generators of energy as well as providers and of products and services within the UK energy supply chain. 

Business support

“We are very supportive of local industrial strategies for England ensuring that Local Enterprise Partnerships (LEPs) are at the heart of this. We welcome the commitment to improving the governance, accountability and transparency of LEPs. We also welcome the commitment that all small businesses in England have access to a local growth hub. Given the unhelpful level of churn in the business support landscape in England in particular, we welcome the commitment to build on this programme and continuation of funding.

“LEPs must, however, build their industrial strategies and growth plans around a full picture of their local economies. At the moment they do so only with information on companies that pay VAT and use PAYE, ignoring micro-firms and the self-employed – around half of UK business.

“To support small businesses to plan for strategic growth they need a holistic support system and whilst it’s reassuring to see commitments to make it easier for firms to get information online and the continued investment in national Business Support Helpline, much more needs to be done. We look forward to the future consultation on the UK’s Shared Prosperity Fund and ensuring small businesses do not lose out in relation to the funding they would have received from the structural funding.

Good work

“Small businesses provide 60 per cent of all private sector employment in the UK and have a critical role to play in offering good work and helping those furthest from the labour market to find high quality employment. We will be taking part in the upcoming Taylor review based on his report.”