Government should shift focus from productivity, say analysts.
Small and medium-sized enterprises could be the fastest route to recovery, creating jobs that require and teach a wide range of skills and boosting indirect employment, according to a report by the University of Cambridge’s Institute for Manufacturing (IfM).
However, over the past 10 years business support channelled towards efficiency improvements and increased competitiveness has led to fewer jobs and stifled GDP growth, the report warns.
While productivity remains important, the IfM says that focussing on growth will lead to increased sustainable employment and financial value for businesses.
Peter Templeton, chief executive of IfM Education and Consultancy Services, said: “Put simply, by giving SMEs appropriate tools to help them develop a coherent strategy, with a clear basis of competition, by helping prioritise where to focus scarce resources, and by developing capabilities we can boost their chances of swift growth.”
“Growth of manufacturing should be a strategic priority for the UK- it has enormous potential to create superior financial and strategic value.”
The report comes soon after the Department for Business, Innovation and Skills (BIS) called for greater private investment in SMEs, saying that private investment will be the fundamental driver to economic recovery and that more must be done to help established small businesses reach their full potential.
The IfM is a division of the University of Cambridge Department of Engineering and works with industry, at a regional, national and international level, providing strategic, technical and operational expertise.