A new report from Royal Sun Alliance has concluded that the UK is now a “nation of micro-businesses”.

Many of these companies, the study says, are “zero-employee firms” with lower potential than “traditional” startups to expand and take on staff. However, as The Entrepreneurs Network director Philip Salter explains in his most recent Forbes column, there is more to this issue than the raw data. Many of these companies, for example, are hiring on a freelance basis.

But the question for policymakers, he says, should be: How can we get micro-businesses to hire more “formal employees”? And what other barriers to growth – such as business rates or red tape – should the government be addressing?