SMEs around the world have seen confidence levels rise and economic outlook improve drastically in the twelve months to mid-2014, according to findings from ACCA and IMA in their second Global SME Performance Review.
The report Back in the Game suggests that government policy and a more favourable investment environment have both had positive effects on UK SMEs.
Charlotte Chung, Senior Policy Advisor at ACCA, explains:
Globally, ratings of government policy have generally improved with the recovery, reaching positive territory in the UK for the first time. SMEs have become more confident about the sustainability of fiscal policy in the medium term, which is no doubt encouraging them to create jobs and to invest. The UK, along with Singapore and the UAE, had the most SME-friendly policies among the major ACCA/IMA markets in 2013/14.
The investment environment has also improved considerably for SMEs in the UK, but also globally. This has been driven primarily by more available capital and more profitable investment opportunities. Micro and small businesses have experienced the biggest funding boost, as finance finally reached those SMEs that were the most squeezed in the pre-2013 period of rationing and restraint. It was SMEs in the UK, the UAE and Ireland who saw the greatest all-round improvement in the investment environment.
While SMEs were hit hardest by the economic downturn, they have historically shown greater resilience, compared to their large corporate counterparts. SMEs are seizing new opportunities for economic growth, by embracing innovation, entering new markets and building strong supplier relationships. ACCA/IMA’s first Global SME Performance Review identified mid-market businesses as a distinct group which greatly contributed to economic growth, and the second review has reinforced the two bodies’ conviction.
According to Raef Lawson, Ph.D., CMA, CPA, IMA vice president of research,
Mid-market businesses are the most ambitious and ready for growth
This group was the most likely to create new jobs during the 2013/14 period and reported the largest increase in job creation, more so than large corporates
They also reported the largest net investment in staff development and greatest emphasis on job creation, highlighting a difference in resource prioritization and allocation between mid-market business and micro, small and medium businesses