Posted on: 03/07/2018
According to research conducted by NatWest and Cebr, the introduction of a series of productivity-improving measures within manufacturing SMEs could boost the economy by £3.9bn.
The research explored the productivity of SMEs across all industries within the UK, with the aim of identifying productivity gaps and potential changes small businesses can make to fill these gaps.
Manufacturing was identified as the top sector to gain the most from an increase in productivity, so it is positive to see 85% of businesses in the sector believe that improving productivity is important. However, the research found that a third of manufacturers don’t know what productivity means in practice, creating barriers for them to take steps towards making improvements; only 48% of small businesses have plans in place to improve it.
As part of the research, NatWest and Cebr identified some measures to help SMEs understand how to boost productivity and the impact these measures could have on the economy. These measures include investing in workplace culture, offering benefit packages above the statutory minimum and providing rewards for good performance.
NatWest has teamed up with Temple Cycles, a cycling manufacturer and Sharmadean Reid to develop a productivity blueprint with the aim of providing SMEs with measures that have the biggest impact on productivity, as well as giving them access to tips and advice from successful UK small business leaders. In addition to this, the bank has also made a £1bn fund available to support SMEs in boosting performance through investment in productivity improvements.
Richard Hill, Head of Automotive and Manufacturing at NatWest, said “It’s crucial that banks, government and business leaders tackle the productivity gap head-on. However, from talking to thousands of our business customers every year, we know that many small to mid-size businesses struggle to understand how to take steps that will make a real difference to their productivity levels. That’s why we commissioned research to enable us to take a closer look at the productivity landscape and identify best practice advice in this area to share with our customers.”
This follows the launch of the new £8m Business Basics Fund, supporting small businesses to adopt new technologies to boost productivity and performance.
As national productivity fell by 0.5% in the first quarter of this year according to the Office for National Statistics (ONS), it is clear that such measures need to be put in place to support small businesses across the UK.
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