Two-thirds of UK small businesses have taken steps to improve productivity over the past year and exactly half now expect their output to grow over the next two. The news follows years of falling British productivity, when placed in comparison with figures from the United States and mainland Europe. The new numbers came to light in a report launched by Albion Ventures, one of the largest independent venture capital investors in the UK.
Better training and increasing the opportunities for flexible working are among the initiates that have been launched to better productivity. 30 percent of businesses have opted to improve systems, while 24 percent have invested in new technology. Improved training is now being offered by 18 percent and flexible working hours have been adopted by 12 percent of small businesses.
The report suggests that the revving up of British small business may lead to the reversal of the productivity deficit. Only three percent of small businesses interviewed predicted that their output would decline further by 2017, while 36 percent predicted that it would remain the same. The report shows though that productivity improvements have been pursued most aggressively by medium sized businesses, of which 86% percent have adopted measures to boost output, compared to just 56% of small firms.
“While the government has pledged more long-term investment in areas like infrastructure, it is ultimately down to individual businesses to adopt the right measures themselves. It is encouraging to see that the majority of firms have tried to address output over the past year,” commented Patrick Reeve, managing partner at Albion Ventures.
Albion’s research also found that 54 percent of business owners in the South West said they aimed to increase productivity over the next two years followed by 52 percent of those in Yorkshire, London and the South East. The least confident regions were found to be the North West, East Midlands and West Midlands with only 46% expecting further improvements there.
When asked how the government could help increase productivity, 42 percent of those interviewed said that investment in fixed line broadband would deliver the biggest benefits.
The report underlines the importance of productivity as a key indicator for growth. Of those companies that predicted increased productivity, the vast majority, 89 percent, predicted sustained growth, compared to just 61% among all firms. Similarly, of those firms that see their productivity stagnating, only 36% predicted that they will grow in the next year.