SMEs could boost UK economy by £57bn by improving productivity
Research released by NatWest and conducted by the Centre for Economics and Business Research (Cebr) has shown that SMEs could add £57bn to the UK economy if their productivity levels matched those of German SMEs.
The study, entitled “Productivity in focus: Germany vs. the UK”, found that SMEs in the UK generate £147,000 worth of output each year on average, less than half that of SMEs in Germany, which generate £335,000 per year per worker.
The research explored the views of UK SMEs on productivity and found that they are uncertain about what action they should take to help boost their productivity levels.
69% of SMEs are aware of the importance of improving productivity, but 41% are unsure of how to do so. The study showed that if UK SMEs with ten employees worked at the same level as German SMEs, then they could boost their annual turnover by £1.9m. This rises to £4.7m for SMEs with 25 employees.
NatWest and Cebr have now offered advice to UK SMEs to help them improve productivity, with investing in workplace culture, offering financial and non-financial rewards for good performance, and career development and guidance being among the suggestions.
Commenting on why NatWest commissioned Cebr to carry out the study, NatWest Commercial and Private Banking’s Chief Executive Alison Rose said that from talking to thousands of their business customers each year, they know that many SMEs struggle to understand how best to improve productivity, and this research was commissioned to better understand the productivity landscape and source best practice in this area to share with their customers.