News on 23 October 2000

SMEs struggle to expand

Most businesses want to expand but feel they are being held back by a variety of barriers.

This is the key finding of an extensive survey of nearly 22,000 firms carried out for the Federation of Small Businesses.

’Barriers to Survival and Growth in UK Small Firms’, based on research by the University of Strathclyde, represents one of the largest non-government surveys of this sector ever undertaken.

Commenting on the findings, FSB UK Policy Chairman Donald Martin, noted:
"It is often said of the SME sector that high growth businesses are restricted to about four per cent of the small business population, yet the percentage of respondents that want to expand substantially totalled over 15 per cent."

That’s the good news. The bad news is that the survey turned up a long list of topics said to be inhibiting growth, including:

  • The cost of banking services
  • A lack of venture capital funding
  • Regulatory red tape, which is both complex and rapidly changing
  • Unsatisfactory transportation networks, and
  • Serious skill shortages.

One response to those skill shortages has been a growing concentration of technology-based SMEs in London and the southeast of England, despite the government’s preference for a broader spread of regional development. The FSB report found that
Scotland and Wales have a surprisingly low concentration of firms describing their activities as technology-based.

A lobbying organisation, these results will give the FSB plenty to work on.

More information is available at www.fsb.org.uk

Elliott Chase

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