The chief executive of accounting giant Sage has called on the government to step up its support of SMEs, and suggested that Bucharest offers an example of how central government action can underpin the success of a start up culture.
Stephen Kelly, who took over as CEO at Sage in 2014, has focused on taking the company back to its roots as a provider of IT to small businesses. In doing so the company has become increasingly vocal about how small businesses in the UK need to be supported by government action. Writing in a blog post this week, Kelly said government must re-commit itself to supporting SMEs.
“At her small business roundtable, Theresa May confirmed that she would not renege on the promise to reform business rates from the last budget, and assured businesses that funding for small business and entrepreneurs lost as a result of a Brexit would be replaced by the UK government.
“A promising start, but there’s more to do, particularly when it comes to encouraging technology start-ups that make up so many new businesses.
“I’d urge US and UK policymakers and economists to look for examples overseas – no, not in Silicon Valley, but in Bucharest, Romania.
Internet speed and education make the difference
“Romania is the second-fastest growing economy in Europe, and Bucharest has bloomed as a start-up scene over the past five years. Several key factors contribute to its success – not least of which its super high internet speeds.
“Romania’s peak internet speeds are the highest in Europe and sixth highest worldwide, and last year Romanian cities made up an incredible nine of the top 15 best cities for fast internet on the planet.
“The Romanian education system also strongly favours STEM subjects like maths and engineering, creating generations of brilliant developers. And in light of the revelation earlier this summer that the UK’s digital skills gap is costing our economy £63bn a year, this is clearly an area in which the UK could stand to learn a lot.
“I’d like to see the UK Government take action in both of these pivotal areas.”
‘SMEs lose an average of £3,500 by handling cash’
Meanwhile, the CEO of Sage Pay, the company’s payments arm, reiterated the need for small businesses to adapt to the changing nature of the payments landsacape. Seamus Smith was speaking on the say the new ‘indestructible’ £5 note was launched. Smith said, “The new five pound note shows that cash, as the old adage goes, is still king. However, we’re increasingly living in a cashless society as shown by our ever increasing uptake of contactless, electronic and mobile payments.
“This trend is no different for the UK’s SMEs – the engine room of the British economy – which, on average, lose almost £3,500 each year purely by handling cash. The cost isn’t just financial – time intensity and error factor is costing £18bn in total for all Small & Medium Businesses across the nation.
In order to grow, businesses need to be ready to accept all forms of payment, be it cash or electronic. They must understand their customers’ needs and ensure they’re offering the right types of payments to the right people at the right time.