04.03.2025

Small and medium-sized businesses are the backbone of the UK economy - out of the roughly 250,000 active manufacturing businesses in the UK, 99% of them are micro and small to medium companies.

Almost two-thirds of these SMEs have ambitions to grow into large businesses over the next decade, which, if realised, could add £83 billion in value to the manufacturing and help propel the UK from 12th largest manufacturing economy in the world, to the seventh. 

This is according to a new Make UK-Civitas report, written in partnership with the ERA Foundation - The Growth Mission: A Blueprint for Scaling up SME Manufacturers. As well as revealing their ambitions, the report outlines the challenges stopping SMEs from scaling up. 

For example, 4/5 say they struggle to access finance during the ‘make or break’ seed to early growth stages of investment, a challenge which, if solved, could boost UK manufacturing investment by £9.2 billion annually. 

While common sector challenges persist around skills, labour and exports; a significant and perhaps more easily rectified issue is the large awareness gap among SMEs of the very support schemes designed to help them scale-up and grow. 33% of them do not know about the Business Growth Fund, while 37% are unaware of the British Business Bank, amongst others, meaning that they’re missing out on potential investment also worth £9.2 billion.

To correct these issues and help SMEs scale-up, the report makes a number of recommendations to Government, including:

  • Creating an Estonia-style British business Bürokratt software tool to pool data collected by HMRC and ONS, to help micro-target support to identified companies. 
  • Introducing a super-growth allowance (150% capital allowance).
  • Establishing an enhanced Growth Enterprise Scheme (GEIS) to boost SME scale-up efforts.

To read our other recommendations to policymakers and manufacturers, download the full report, below.

Click here to read reactions to the report's findings from Make UK CEO Stephen Phipson, Business Secretary Jonathan Reynolds MP, Civitas CEO Jim McConalogue and ERA Foundation CEO Andrew Everett.

Available resources