Business leaders across the UK have called on the government to advance a tax break for small to medium-sized businesses who are spending in productivity technology.
According to the Institute of Directors (IoD), they believe a new Enhanced Capital Allowance would push business leaders to invest in the correct technology, (for example cloud computing and data analytics) to help their business grow.
The report conducted by the IoD ‘Lifting the Long Tail’ found that the most significant action within the report was the idea of a tax break to allow SMEs to invest in technology. It also implies why productivity within the UK is seen as ‘sluggish.’
‘Lifting the Long Tail’ author and senior economist at the IoD, Tej Parikh believes that entrepreneurs, rather than look to grow their business they typically look at where they can cut costs;
“Directors of smaller firms need the support and encouragement to spend more time working ‘on’ and not just ‘in’ their organisation, and to confidently adopt new management techniques and technology.”
The report also highlighted the apprenticeship levy and that it should extend into a training levy to allow employees reach their full potential through management and digital training.
“Solving the productivity puzzle has been a defining challenge for the UK over the past decade. The success of our post-Brexit economy hinges on our ability to unlock the vast untapped potential among small businesses.
“For too long, the debate has revolved around broad prescriptions and sweeping trends, but there is no silver bullet. We must now move the discussion out of the ivory tower and onto the office floor.”
Chief economist at the Bank of England, Andrew Haldane portrayed the report as; “useful food for thought for government, as it begins to put in place the next steps of its important and ambitious industrial strategy.”