The State of Small Businesses in the UK
The article below is from our BRIEFINGS newsletter of 21 October 2019
Climate change, advancing technologies and shifting workforce dynamics are among the top priorities for small businesses in the UK, according to survey results released by Goldman Sachs’10,000 Small Businesses UK at the firm’s Business 2030 conference held in London earlier this month. We spoke with Goldman Sachs’ Charlotte Keenan, who leads the firm’s Office of Corporate Engagement for the EMEA and APAC regions, to share how entrepreneurs are running their businesses in the face of global uncertainty.
Charlotte, based on the report – which surveyed more than 400 companies that completed the 10KSB UK program – it seems like small businesses are optimistic about the future. What specifically did the survey find?
Charlotte Keenan: Going into the survey we had expected that small business owners would see issues such as sustainability, social impact, climate change and technological innovation as less of a priority given resource and capital constraints. But today’s entrepreneurs believe these are all issues that can’t be ignored and actually view them as essential opportunities for future growth. About 93% of those surveyed felt their businesses had an obligation to do good in their communities. And while nearly half of respondents said AI had replaced manual processes in their businesses, only 7% laid off their employees as a result. Instead, two-thirds of respondents focused on re-training displaced workers into other jobs. Meanwhile, climate change is top of mind with 86% saying they plan to introduce new strategies to reduce their environmental footprint over the next decade. We are seeing small businesses reconfigure their operations, align with purpose-driven missions, utilize automation and train their staff for the future. Overall, small businesses appear to be on the vanguard of driving and shaping the broader impact revolution.
That all sounds positive, but given the broader uncertainty around Brexit, how are small businesses responding?
CK: Despite the uncertainty over Brexit, small businesses are continuing to drive the UK economy. Not only are they maintaining their usual business, they are also exploring new ways to protect – even expand – their supply chains within and outside of the UK. To be sure, the longer the political uncertainty continues, the more challenging it becomes for small businesses to sustain growth. To find and recruit talent is a key example, and Brexit is already having an impact on available talent in the UK. Even against the backdrop of these challenges, the encouraging news is that, according to our findings, small business owners are actually on the forefront of driving innovation – they are already identifying the opportunities that lie within these challenges and finding new ways to grow.
Can you describe the role that small businesses play in the UK?
CK: Small businesses contribute approximately 60% of all private sector employment and more than 50% of all private sector revenue, according to the Federation of Small Businesses. They are significant drivers of growth for the national economy and at the heart of their local communities. Whilst 10KSB UK graduates are optimistic about the opportunities they face in the next decade, there are concerns about the broader small business community; outside of 10KSB UK there is still a support gap for small businesses, with just 25% feeling that they get the support they need to succeed and grow.