Boosting productivity of SMEs in north England vital for economic growth, says think tank

By international standards, the UK’s post-recession productivity performance has been poor, the Progressive Policy Think Tank's (IPPR) final report into SMEs and productivity in the Northern Powerhouse shows. 

According to IPPR's research, this ‘productivity problem’ is particularly acute in the north of England, and hard hitting for the smaller businesses that make up over 99 per cent of the northern business population.

In order to reverse the issue, the IPPR is suggesting that policy for productivity target both advanced industries and high-tech sectors, as well as the ‘everyday economy’ in which many small and medium-sized enterprises (SMEs) provide employment and support communities and places.

"This is important if productivity gains are to translate into higher wages and better living standards," the IPPR said. 

The think tank warned that northern SMEs are not a homogeneous group. They need support that is tailored to their local contexts and individual needs, which means strategically coordinated opportunities that are rigorously assessed for efficiency, relevance and effectiveness, delivered by experts and well-resourced.

Moreover, signposting services are also essential to allow busy SME leaders to navigate what is inevitably a complex landscape, the IPPR said. 

The think tank's report sets out the support that SMEs need to help them respond to wider challenges and opportunities in the UK economy, and recommends measures to boost northern SME productivity.