Small and medium-sized enterprises (SME) are a crucial engine of economic growth. There are 1.2 million SME employers in the UK who are responsible for fourteen million jobs. And, over the past twelve months, half of these SMEs have launched a new or innovative product or service. The UK compares particularly well internationally in its percentage of small high-growth technology firms.
But too many viable businesses fail or do not reach their full potential
Typical obstacles include inadequate finance and managerial shortcomings. The Digital Economy Minister, Ed Vaizey, recently called for ideas on how Government can support entrepreneurial activity and promote digital innovation. In our response we highlighted the Government’s role in creating an open and supportive framework for SMEs to grow and providing specific support to those with the most growth potential.
This framework includes recognising that SMEs do not grow in isolation but in partnership with larger companies. For example, SMEs rely on larger firms at the top of supply chains for new opportunities and for the commercialisation of their ideas. In return larger firms benefit from new types of breakthrough innovation developed by SMEs that can deliver superior outcomes for customers, and even shift a market.
How can SMEs and large firms work together?
Like other large firms, Sopra Steria maintains a diverse supplier base including SMEs. During the first half of 2015 we spent over £18 million with over 500 SME suppliers across the UK. We work hard to foster long-term relationships with smaller businesses that bring creativity and add value to our own skills and capability.
But large firms also need to understand that late payment is a frequent bugbear of SMEs. We are proud of our reputation as a responsible business partner and our responsible business practices. That is why we signed, and comply with, the strict standards of the Prompt Payment Code. This means that we give clear guidance to suppliers and pay suppliers on time.
Large firms are already working with Local Enterprise Partnerships, universities and other partners to put in place local solutions to help SMEs to grow. This includes business support through Growth Hubs, loan schemes to finance expansion activities and advice on export markets through UKTI. Devolution through City Deals and Growth Deals will encourage more growth and innovation.
Large firms can support this growth through events that highlight opportunities to work with them and their partners. In Cleveland (where we have a strategic partnership with the police) we run supplier open days, including bidding advice surgeries, and we attend meet-the-buyer events. This can make a tangible difference to an SME; a good example is a local firm that received coaching and went on to win a contract with the police to provide specialist uniforms.
Please get in touch by email to share your thoughts on SMEs and large firms working together, particularly if you have ideas or experience of the obstacles or enablers of partnership working. Or visit the Sopra Steria website for further details about how we conduct business with SMEs and other suppliers .