A new report exposes a significant risk that the UK’s small and micro businesses will miss out on an estimated £827 billion growth opportunity over the next five years if they are not supported to digitise.
Technology has already played a critical role in supporting small businesses through the pandemic, with 41% of small business owners saying their company would not have survived without digital tools, according to – ‘ Striving to Thrive: The state of play for micro and small businesses ’ – commissioned by Mastercard from the Centre for Economics and Business Research (Cebr).
As we emerge from the worst of the economic impact, and the nation’s small businesses consider growth prospects in the post-pandemic economy, support using digital tools is cited by business owners as the most important factor in achieving their growth aspirations following funding and government support packages.
A further 47% believe technology will become more important to their company’s success over the next five years, while 45% note that use of technology has already helped them to expand their customer base, and around a third say technological adoption has led to increased turnover and increased profit.
Despite this, data shows that challenges remain for small businesses looking to integrate digital tools, with 39% of small businesses feeling overwhelmed by the amount of choice, and 32% wanting to use more digital tools but unsure which ones would be best for their business. This uncertainty rises to 49% in the case of businesses that are owned or run by individuals from ethnic minority backgrounds, highlighting a need for highly-tailored, focused support.
Kelly Devine, President, UK & Ireland, Mastercard, said: “Small businesses are the beating heart of the British economy. The past 18 months have proved almost unendurably tough for many, and data shows that small businesses are in urgent need of support if they are to survive and grow post-pandemic. Strive UK has been set up to act as a free resource for small business owners across the country, helping them to navigate the digital economy, build relationships and communities, and ultimately realise their growth ambitions.”
Sam Miley, Economist, Cebr, said: “The data highlight the scale of small businesses’ growth aspirations. Realistically, many businesses may fall beneath these expectations as a result of a number of factors, such as weaker productivity or a slump in economy-wide demand. Nevertheless, external sources could be pivotal to supporting businesses to achieve this growth and minimising the number of businesses that are unable to meet their targets.”
The report is published as Mastercard launches Strive UK, a new programme to empower 650,000 of the UK’s small businesses to succeed in the digital economy through free guidance, helpful tools, and personalised, one-to-one mentoring. Strive UK will offer personalised support to businesses run or owned by females or individuals from ethnic minority backgrounds.
Strive UK will support small businesses in a number of ways, including an online ‘One Stop Shop’ for entrepreneurs with advice on all areas of growing their business, one-to-one mentoring for businesses to identify the right digital tools for them, and a forum to speak to similar businesses who have already successfully managed to integrate new tools.
Mastercard also recently published a whitepaper with a number of recommendations for the UK government to break down the barriers that micro and small businesses face. It identified four key areas of opportunity to do so – empowering businesses to take advantage of digital technology, simplifying the support ecosystem, encouraging peer-to-peer mentoring and networking and targeting resources at underserved segments of the small business community.