Festival will help SMEs in UK make global connections
After years of false starts, recent data suggests the British economy is mounting a sustained recovery. The eurozone has also returned to growth, and growth is moving in the right direction in China and the US too, meaning the pressure is easing on UK businesses.
The Office for National Statistics says Britain's GDP expanded 0.6% in the three months to June, with increased output from the manufacturing sector playing a major role in driving economic growth. After a fall in April and May, across-the-board expansion led by the transport sector saw production rates rise by 1.9%, the highest rate since 2010.
Overseas demand has played a pivotal role in driving growth for British manufacturing. Trade with non-EU countries has risen 29% since 2009, helping generate record exports of £78.4bn between April-June.
It's not just big manufacturers supporting this recovery. Research by the Federation of Small Businesses (FSB) shows that small ones were more confident in the second quarter of 2013. Many will be at the heart of the supply chain, providing valuable services driving the manufacturing sector's revival.
Manufacturing in the UK is no longer simply about "bashing metal" or even precision engineering; it covers a wide range of other sectors such as food/drink production, digital technologies and craft work, to which a whole raft of small businesses contributes.
To sustain growth, international markets must appreciate the diversity, quality and expertise of Britain's manufacturing community. Next year, the UK will host the International Festival for Business, a worldwide business expo celebrating the richness of UK industry, attracting upwards of £100m worth of direct inward investment. It's a key part of the UK's ambition to promote economic growth, rebalance the economy and double exports by 2020.
The expo will comprise more than 100 events during 50 days in June and July, bringing together potential investors from key sectors to provide unparalleled opportunities for international collaboration.
This is just what small firms need, and something the FSB is proud to back. Our nationwide study found confidence among the UK's small business community reached a three-year peak in the last quarter, matching the encouraging statistics put forward by the ONS. Just as encouraging was the news that confidence among SMEs was spread evenly across the country.
These positive findings should make welcome reading for the Government, which has placed great stock in the ability of small businesses to grow, invest and compete with international rivals. Our research on employment intentions is equally upbeat, finding that the majority of small firms want to expand.
Anyone who works closely with SMEs would tell you that the enthusiasm and drive of the UK's small and micro business leaders matches that of any CEO from a large corporation. With sustained confidence, the future is looking bright for the small business community. But there can be no room for complacency. The level of UK output is more than 3% below its pre-recession peak in 2008 while the manufacturing sector still faces major challenges.
I often hear from our members that accessing finance continues to be a barrier to growth. Despite the positive figures reported by the ONS, the costs of utility, labour, rent and input are all higher today than 12 months ago, while improving access to funding remains a challenge.
Increasing small businesses' direct engagement with international markets will help remedy this impasse. All this will provide greater opportunities for SMEs to connect with new partners and generate increased income. But British firms must be actively encouraged to do so.
Events like next year's Festival for Business will play a major role in connecting British SMEs with international businesses and will provide a platform for these ambitious businesses to expand. The UK's small business community has a wealth of innovators and entrepreneurs capable of sustaining economic growth – it's time we let the rest of the world know just how strong our reserves really are.