Small and medium sized enterprises (SMEs) are crucial for the UK economy. It is these SMEs that have been most affected by the introduction of GPSR, as such businesses may lack the administrative capability or financial capacity to take on further regulatory burden.
SMEs employ a remarkable number of the British workforce, with 16.7 million people employed by either small (<49 employees) or medium (50-250 employees) sized private businesses, equivalent to 61% of total private sector employment. Furthermore, turnover from SMEs was estimated to be approximately £2.4 trillion, or 53% of the total turnover for the private sector in the UK. The impact of additional trade barriers on SMEs post-Brexit, limiting their ability to grow and trade with the EU - and internally in the UK, with Northern Ireland - is fundamentally damaging for the British economy as a whole.
According to the OECD:
“SMEs and entrepreneurs (are) crucial to sustainable and inclusive growth. They fuel innovation and competition, sustain competitiveness in global markets, provide a main source of employment, and represent the lifeblood of local economies and communities”
A survey conducted by Goldman Sachs in collaboration with the University of Oxford and Aston University found that enhancing productivity amongst SMEs is a critical way to deliver wholesale economic growth throughout the UK economy. Professor Mark Hunt, deputy director of the Enterprise Research Centre added that:
“Policymakers have often focused on supporting High-Growth Firms (HGFs) but may have overlooked the broader impact of small businesses on productivity. It's crucial to understand the drivers of productivity gains across all firms.”