Innovation injection needed to narrow UK’s productivity gap

Mike Cherry, FSB national chairman
Mike Cherry, FSB national chairman
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The UK’s productivity gap could be tackled by ensuring innovation among small firms is hardwired within supply chains, according to new research.

The Federation of Small Businesses (FSB), said that just 30 per cent of small firms are currently given some sort of help to make positive changes within their business by bigger firms in their supply chain. Of the firms that did receive assistance, the majority (83 per cent) said it had a positive impact on their business.

FSB believes that the number of people growing their businesses using innovative techniques could increase significantly if more support is fed down from their business customers in their supply chain.

The new data, which is part of forthcoming wider research into how the UK can better use supply chains, shows that through this help over a third (39 per cent) of FSB small suppliers improved their reputation and credibility when they innovated using support from another business, while 28 per cent increased their turnover.

The FSB wants to see support for innovation in the supply chain hardwired into the Industrial Strategy and Sector Deals.

FSB national chairman Mike Cherry, said: “Innovation is key to the survival of all small businesses, and integral if they want to grow and increase their productivity.

“It’s essential that larger businesses are given incentives to encourage them to work with their small UK suppliers and acknowledge their impact on small firms in their supply chains.”