To get the economy growing again, we can’t afford to leave our small businesses on the side lines
As I chatted to some of the small businesses in my local area on Saturday, I was reminded that Britain’s 5.5 million small businesses are operating against the most challenging economic backdrop in memory.
Traditionally during the festive season, shoppers focus even more on how they can support their small independent businesses, whether they’re on the high street or online, and that’s great. Yet despite being so integral to the economy and our local communities, more than a third of small businesses have seen their turnover decrease this year, even as we have emerged from the pandemic.
Although businesses are feeling the pressure right across the spectrum, Mastercard research has revealed the striking fact that women business leaders and business owners from minority backgrounds are more likely to be feeling the effects of the economic slowdown.
To help with this challenging period, the Chancellor made several welcome announcements in his Autumn Statement. But small businesses still face difficult times and need further support.
If we want to be ambitious for small businesses, as the Prime Minister said in his recent speech to the CBI, they must be placed at the centre of any plan to boost economic growth and the country’s productivity.
Mastercard conducts quarterly research to gain insight into the challenges small businesses face and what help they need. One recurring message has been the role of technology, with two thirds (61%) of owners saying it will only become more important to their business over the next ﬁve years.
Embracing technology such as digital payments, cloud software, and social media is crucial to helping businesses unlock productivity and grow. Over a third (35%) of owners want to adopt more, but the pace of change in tech is holding them back, with many overwhelmed by the amount of choice.
UK’s micro businesses will miss out on an estimated £827bn growth over the next ﬁve years if they are not supported to digitise.
And so, we’d like to see the government further expand the Help to Grow scheme and offer better signposting to the plethora of digital skills training and mentoring services already existing. In addition, we think it’s vital there should be a speciﬁc focus on helping women and minority ethnic business owners.
Late payments are also still holding small businesses back, so we’re also calling upon government to pioneer digital payment technologies with small business suppliers to free up their cashﬂow.
Finally, now more than ever, we need a long-term vision for our towns and cities, for our local communities, and for the businesses that are the beating heart of our nation.
But not everything can be achieved by government alone. Big businesses have a role to play too.
Mastercard's Strive UK programme is a great example of how big businesses, civil society, and the public sector can together help small businesses grow. Working with partners, including Be the Business, Digital Boost, and Enterprise Nation, it is enabling small businesses to face the tough economic environment head on. The programme has already helped more than half a million business owners – almost half of them women and minority ethnic business owners – through free guidance, digital tools, and personalised mentoring.
When the Prime Minister entered Downing Street, he said he wanted to make Britain a place where businesses invest, innovate, and create jobs. To do that, small business can’t be left on the side lines.
Only when we work together to unlock the potential of UK’s smallest entrepreneurs can we also supercharge growth and unleash the full potential of the economy.
To find out more, please see:
Mastercard Strive UK Business Barometer Report, November 2022
Striving to Thrive: the state of play for UK micro and small businesses 2021
Get the inside track on what MPs and Peers are talking about. Sign up to The House's morning email for the latest insight and reaction from Parliamentarians, policy-makers and organisations.