Small and medium sized businesses may pay the largest price for the UK leaving the EU, new research suggests.
The study by academics at the University of St Andrews has been labelled the first of its kind. It relies on data from a government attitude survey of around 10,000 firms to measure the potential impact of Brexit on SMEs.
Uncertainty caused by an exit from the EU is highlighted by the findings with innovative SMEs in particular, voicing concerns about Brexit.
The report suggests that lower levels of capital investment, reduced access to external finance and lower levels of growth were among issues arising from the perceived impact of the UK’s divorce from the EU.
Dr Brown, Reader in Entrepreneurship and Small Business Finance at the University of St Andrews, said:
“The results of our analysis suggest that Brexit-related concerns could result in a range of negative consequences for UK SMEs, especially the impact on reduced capital investment, which critically weakens and undermines their ability to grow and prosper.
“Most worryingly, these perceived negative impacts appear to be foremost in the minds of entrepreneurs and managers located in the types of innovative and export-oriented companies, which are often viewed as the high growth ‘superstars’ of tomorrow.
“In other words, SMEs thought to be the most significant for boosting productivity and economic growth may be the most negatively affected by Brexit.”
SMEs based in Scotland and Northern Ireland have been revealed as viewing Brexit more negatively than their counterparts in England and Wales.
In the UK, there are 5.5 million SMEs which together account for more than 99 per cent of firms, and 60 per cent of total UK private sector employment. SMEs account for 73 per cent of all net private sector job creation in the UK, creating more than two million jobs since 2010.