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East Anglia: Many of region’s SMEs still in ‘survival’ mode despite upturn in recruitment plans, survey shows

11:29 17 March 2014

Prof Robert Blackburn, director at the Small Business Research Centre at Kingston University.

Prof Robert Blackburn, director at the Small Business Research Centre at Kingston University.

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The recovery for small and medium-sized enterprises (SMEs) in East Anglia remains fragile, despite the likely creation of 40,000 new jobs in the sector this year, according to a new report.

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The “Collaborate UK 2014” study, carried out for distribution firm CitySprint, found that 19% of SMEs in the East region expect to hire more staff this year while 11% expect to reduce their workforce.

The net balance of 8% equates to around 40,360 extra jobs over the course of the year, a figure beaten by only three other English regions London, the South East and the South West.

However, more than half of SMEs in the East (52%) said that “survival” remained their top priority, with nearly a quarter (23%) saying that increased competition had been an obstacle to success over the last 12 months, the highest in the UK.

Looking forward, more than half (51%) of SMEs in the East are looking to grow their customer base nationally, the largest number in the UK and significantly higher than the national average of 41%.

More than half of SMEs in the region (55%) are also considering diversification into new sectors or industries this year in order to achieve growth, compared with a national average of 43%.

However, growing the customer base internationally is seen as a priority by only about one is six SMEs in the East (16%), compared with one in five for the country as a whole.

Prof Robert Blackburn, director at the Small Business Research Centre at Kingston University, said: “We are starting to see SMEs begin the shift from a ‘survive’ to a ‘thrive’ mode, but it’s clear that a recovery is yet to be felt across the whole SME business population – we are far from out of the doldrums.”

The survey also found that SMEs in the East are more inclined that those elsewhere to “go it alone”. They would like to cut the number of business partners and suppliers they work with to nine, the lowest in the UK little more than half the national average of 16 half the number they worked with last year.

When asked what the biggest barrier to collaboration was, a third (33%) of SMEs in the East admitted to being worried that others might steal their ideas, a figure second only to Wales.

However, Patrick Gallagher,chief executive of CitySprint, said that businesses which sought to work collaboratively would reap the benefit.

“Rather than waiting for opportunities to come to them, SMEs in the East are innovating and looking beyond their back garden for growth.

“Their tenacious spirit, which helped weather the downturn, is fuelling their ambitions to expand, but the benefits of working closer with other businesses will far outweigh any benefits of going it alone.”

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