One in four small and medium-sized UK businesses is predicting zero growth for their business in the next six months, finds research.
Figures from Virgin Media Business suggest that the recovery is not filtering down to smaller businesses, in stark contrast to more positive recent economic statistics.
Mike Smith of Virgin Media Business says that while the UK has every right to feel optimistic about the economy, both government and industry need to continue to work together in recognising that smaller businesses, in particular, are still finding the economy challenging.
The study of more than 1,000 companies in the UK with two to 250 staff finds that a quarter (24 per cent) feel the current economic situation is their single biggest barrier to growth.
Around half of company founders (53 per cent) say getting the right business advice was one of their greatest challenges when setting up their business, just behind understanding taxes and VAT.
Fewer than one in ten (8 per cent) say they turned to government services when they actually had business problems.
However, the research also shows that businesses are failing to appreciate the growth potential in modern digital technology. Only one in five small businesses (20 per cent) say that digital training is a key area for investment in the next five years.
Smith says, ‘Small and medium-sized firms should be the fuel of our economy powered by simple, flexible technology, but we feel that industry and the government need to look at ways it can provide more support and direct assistance to this group which is UK plc’s driving force.
‘Technology has an unrivalled power to help propel businesses forward but people need the skills to be able to use it. With simpler products, better skills and backing from the top, the UK’s businesses will grow faster and that can only be good for the whole economy,’ he adds.
‘The UK’s digital economy already accounts for 8 per cent of GDP – more than any other G20 nation – but we risk losing this competitive advantage if we fail to enable our small businesses to use technology better.’