The Federation of Small Businesses (FSB) has urged the government to invest in innovation in order to help boost productivity amongst small and medium-sized enterprises (SMEs).
A report published by the FSB has suggested that 24% of UK SMEs and sole traders have not made any significant changes to products or processes in the last three years, with many citing pressure on time and finances as being a barrier to innovation.
The report also revealed that 76% of SMEs have made significant improvements to their business over the past three years. 95% of those who did innovate introduced a change to their business, such as new software, whilst 25% invented a new-to-market product.
In its report, the FSB stated that the government must put more emphasis on supporting businesses to make improvements within their firm .
The business group has called for the introduction of a new tax credit to help alleviate the opportunity costs attached to small business owners who take time out of their firm to undertake leadership and management training.
Think of innovation, and introducing new, market-changing inventions might spring to mind. While these are undoubtedly important, our research shows that changes made within small businesses can have huge impact on their productivity, said Martin McTague, Policy Chairman at the FSB.
We are calling for the government to explore putting in place a tax credit for those time-poor small businesses that can t afford to take time out of their everyday businesses to take part in training.