Growth - what holds business back?

16 March 2006

IoD publish findings of membership survey

Ahead of today's debate in the House of Lords on small and medium-sized businesses, the Institute of Directors (IoD) published the results of its membership survey report which, among its other findings, identified a number of issues that are preventing businesses from growing. 

The three principal factors identified by IoD members are:

• the regulatory burden
• taxation
• skills shortages and gaps

Further inhibitors to growth included competition and economic uncertainty.

The IoD's Head of Business Policy, Dr Richard Wilson, said:

"I am not surprised that the regulatory burden, taxation and skills shortages and gaps have been identified by our members as the principal barriers to growth.  When I travel around the country, it is clear that with a lighter regulatory burden, less taxation and action to fill skills shortages, our members would be able to be even more entrepreneurial than they are at present.   

"With this report we wanted to establish more closely the key characteristics of IoD members and their organisations and to examine how similar and or different they are to the 'average' UK business - what we discovered was quite remarkable. Not only are our members entrepreneurial, more inclined to export, family-friendly and education and skills focussed, they are dynamic and resolutely growth-orientated."
The survey also showed that nearly 70 per cent of IoD members had increased their organisation's turnover in the past twelve months and a massive 94 per cent of members planned to increase their turnover during the next twelve months.

Regional variations too were highlighted by the report, the South of England was the fastest growing region closely followed by the Midlands and the North of England.  Business and professional services, followed by financial services were identified by IoD members as the fastest growing sectors.

With regard to IoD members' propensity to export, Dr Wilson said:

"An extraordinarily high proportion of IoD members export their goods and services - over 40 per cent - that is way above the Government's estimate for small and medium sized enterprises of 12 per cent.  Once again, IoD members demonstrate that they are the buccaneers of the business world."

When it comes to on-line selling, the survey showed that IoD members buck the trend with 29 per cent of members selling products or services on-line, compared with 7 per cent of UK businesses as a whole.  IoD members are also computer-savvy with a staggering 89 per cent having their own website, compared with official Government figures which suggest that just 34 per cent of UK businesses had one in 2004.