The big news for entrepreneurs this week was the launch of Upgrade, our new report on closing the digital gap and lifting productivity for SMEs, which was launched at a packed Webinar by Paul Scully, the Small Business Minister.
Ok, maybe the Chancellor’s the Summer Statement pips it to the post. But you can read about both in my article for City AM on why we need a productivity revolution. I argue that the real test of this government comes next, and will require reforms across all areas of government that put increasing productivity at the centre of our economic recovery.
(You can find out more details about how the Job Retention Bonus, Kickstart Scheme, and other Summer Statement announcements will impact your business in our latest Policy Update.)
The best explanation of Upgrade, which was commissioned by Xero, comes from our research director and author of the report Sam Dumitriu. In his CapX article Sam discusses how Upgrade highlights the potential to raise wages through increased digital adoption among the UK’s SMEs.
Analysing the Enterprise Research Centre’s Micro Business Britain survey, the report finds that the 4.09m workers employed by micro businesses would receive a £4,050 average productivity boost if digital adoption rates among micro businesses were doubled.
This isn’t a pie in the sky ambition – EU data reveals the UK has a particularly large proportion of businesses (38%) with very low levels of digital adoption compared to countries like Sweden and the Netherlands, where just over a fifth (23%) of firms have very low levels of digital adoption. While in Finland, just one in ten (11%) have low levels of adoption.
We think this represents some relatively low-hanging fruit for the economic recovery. Not least, because so many businesses are already undergoing digital transformations due to the pandemic. But we have nine policy recommendations in the report to ensure it sticks and have produced a handy two-page summary if you don't have time to read the whole report. Also, here’s Sam explaining a few of them:
“Upgrading the UK’s SMEs will require making it easier to finance digitisation by modernising the R&D tax credit’s 70’s style definition of research. It will also mean making it easier for workers to self-fund training and learn new digital skills. For instance, at the moment a graphic designer cannot claim tax relief for taking a course in digital marketing, even though it could lead to new business in the future.”
“It’s also important to make it easier for businesses to identify digital opportunities. Advice serves an important role, but the Government must not overstep its mark. Businesses are more likely to trust other businesses than politicians"... "That’s why it’s important to outsource advice to trusted business organisations. Funding is useful, but delivery should be left to the real experts.”
Eamonn to that
If one report on how new technologies can help tackle Britain’s productivity isn’t enough for you, Eamonn Ives of the Centre for Policy studies has another for you: Platforms for Growth.
Among other things it calls for an urgent review of the Apprenticeship Levy to ensure employers use funds to invest in digital training that will deliver recognised productivity benefits for their businesses, and a comprehensive new cyber security strategy to take effect after 2021 to provide reassurance for those who operate online.
Free lunches
Emma Jones, Founder of Enterprise Nation and Adviser to the network, has pulled out the stops again, launching the Recovery Advice for Business scheme.
The Recovery Advice for Business scheme, which is supported by the Government, will give small firms access to free, one-to-one advice with an expert adviser to help them through the pandemic and prepare them for long-term recovery.
Advice offered will include accountancy, legal, advertising, marketing, recruitment and digital. It is free until the end of the year and is supported by ICAEW, CIPD, The Law Society and the Advertising Association.
Are you a startup looking to raise £300k to £3m? KPMG and Central Research Laboratory have an intensive 3-day programme – packed with founder talks, VC clinics, pitch coaching, financial reviews and negotiation workshops, aiming to give you the tools and knowledge to successfully raise your next major round of investment. Find out more and register to apply through Eventbrite.
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