SMEs won't be picking up the public sector job extras

The Government hopes the private sector will start hiring as the public sector starts firing. But SMEs beg to differ, at least in the short term.

We’ve heard a lot from the Coalition recently about how entrepreneurship is the answer to the UK’s economic woes. The Chancellor told the CBI conference just weeks ago that he envisaged a future where new start-ups could ‘flourish’, ‘drive growth’ and ‘create jobs’. With 500,000 public sector jobs expected to be lost, that means we'll need a whole lot of high-growth start-ups to avoid the dole queue expanding exponentially. However, research conducted shows that 85% of SMEs aren’t planning to take on any new staff in the next three months. Doesn’t bode well…

Add to that recent reports that the UK’s lack of world class manufacturing is going to hinder any recovery where are we to go?

That said, the Prime Minister may not need to fret just yet. Research released by the London Chamber of Commerce and Industry earlier this month found that the majority of London-based entrepreneurs are planning to invest in growth in the next two to three years (just 30% weren’t). So although most entrepreneurs are sitting on their hands for now, it could be a different story further down the line. That's backed up the survey, which also found that around 35% of firms are more optimistic about the economy than they were three months ago, and a similar number are expecting business to take a turn for the better in 2011.

But if the Government is really going to persuade small companies to invest in growth, it may have to go further than spending money on infrastructure and its much-heralded centres for innovation (though that's a decent start). What do entrepreneurs really want? Less red tape, for a start: a quarter of SMEs reckon the Government should start by taking the axe to health and safety legislation, while a further 19% thought tax compliance was the place to start. Hopefully, reducing the compliance burden will save money and free up entrepreneurs to do what they’re best at, i.e. running their business - while shelling out lots of tax and hiring lots of ex-civil servants in the process.

Also there is a  lack of training for women  in business which has bee identified as holding back UK industry, where next?



Helping Real People do Real Business Through Real Networking