£83bn boost to UK economy over the next decade if Britain’s SME manufacturers achieve their growth ambitions

05 March, 2025

Exporting into new markets is again proving difficult for SMEs, stalling scale-up potential. If the UK economy is to achieve the government’s ambition of highest growth in the G7 list of countries, we need to increase exports, but just under a quarter (22%) of manufacturers export directly. Our research showed that 38% of SMEs said a lack of understanding of local regulations and bureaucracy prevents them exporting, while 36% of SMEs say better communication from government is needed to improve awareness of export advice and export finance support already on offer.

Stephen Phipson, CEO of Make UK said: “Using AI to leverage the wealth of data available in the UK to micro-target SMEs at exactly the right moment of their growth journey, where they will be most receptive to and benefit from the types of support to boost scale-up success will dramatically deliver quick-fire growth across the whole of the UK.

“Small and medium sized businesses already play a significant part in contributing to growth but, with the right support, they could do even more. Helping these firms to export and use data to pinpoint growth potential could result in huge dividends for the economy.

To boost SME exports, Government should introduce an Export Development Scheme to improve access to trade finance and expand Export Finance services to incorporate additional risk management support. Business awareness is at an all-time low and a lack of awareness is the greatest barrier to SME engagement.”

Other top barriers to growth include difficulties in adopting automation and lack of access to skilled labour, particularly skilled engineers and those employees with developed leadership skills. 41% SMEs want information/advice on adopting digital technologies/automation while 43% of SMEs want better support for apprenticeships to train the next generation of engineers and technicians. This shows why government must improve accessibility to skills funding provision with the transition to the Growth and Skills Levy.

Jim McConalogue, CEO, Civitas said: "Government and industry must put the pedal to the metal to unleash the growth and export potential of Britain’s great SME manufacturers. This will mean resolving the blockages where more than a third often lack awareness of existing programmes available across finance, tech adoption, trade or skills, and then improving accessibility, so SMEs can be geared towards growth.

Let’s propel investment by starting with a proposed new super-growth allowance and tearing up the rulebook for scale-up companies, hemmed in by tired old, age limit rules. Bring in a new Growth Enterprise Investment Scheme to give homegrown scale-ups a fighting chance through tax relief for their investors who are prepared to take the necessary risks.

As we invest in our economic potential, to reach for that £83 billion prize, the skilling of the next generation of leaders, engineers and technicians will be essential. The benefits of a fully reformed and SME-accessible skills funding through the government’s Growth and Skills Levy could be remarkable, if pursued correctly.

Andrew Everett, CEO, ERA Foundation added: “Small and Medium sized manufacturing companies are the lifeblood of the UK economy. In particular, the high-tech manufacturing companies that were the focus of this study have the potential to grow rapidly and deliver significant economic benefit.

Many are oblivious of the support mechanisms available to them and the Government should work with industry to increase the awareness so that the growth potential is realised.

Support for skills development, capital expenditure, finance for growth, exports and operational costs are critical for our high-tech manufacturing sector to deliver the economic benefit that we know they can. We look forward to seeing progress on the recommendations from this report.”

https://twitter.com/MakeUk_

https://www.linkedin.com/company/makeuk/