Small businesses have the potential to transform public service delivery and drive innovation, which is why the Government set themselves a target of spending £1 in every £3 of their annual tech spend on SMEs by 2022. The ambition is evident in Government - but in order to make this a reality the Government needs to break down the barriers that have been in the way of SME access to the public sector tech market for a little while now.
From December 2019 to January 2020 techUK surveyed over 100 SMEs who supply (or aspire to supply) tech to the public sector, to gauge their views on the market. We use the findings to develop recommendations to promote GovTech innovation, ensure a smoother experience when it comes to procurement, and generally help improve access to the public sector tech market for SMEs.
66% of respondents state that the Government has not acted effectively on its commitment to helping small businesses break into the public sector over the last five years. Perhaps even more significant is the fact that 66% of respondents do not feel that the Government will achieve the SME spend target, this has increased from 63% last year. It’s clear that despite considerable efforts, more work needs to be done.
It’s definitely not all bad news, however. The Digital Marketplace, established to simplify the application process for small businesses operating in the public sector tech market, has made great strides in making opportunities more open and visible to all. 60% of survey respondents feel that the Digital Marketplace has helped SMEs access the public sector tech market. It has been successful in making opportunities easier to access, but 63% of respondents don’t feel that the Government is making enough use of e-marketplaces.
Perhaps the most significant revelation from the survey was that 91% of respondents felt that government doesn’t have a sufficient understanding of how small businesses can meet their needs, this is up from 85% last year. Our infographic outlines the biggest barriers identified by respondents in this year’s survey, unfortunately the barriers remain largely unchanged and include a risk-averse culture in the civil service. The feeling is that Government still favours larger suppliers, meaning SMEs don’t get the opportunity to showcase their capabilities and show Government just how they can meet their needs.
We hope the below recommendations will aid in improving the situation for SMEs – we need to see ministerial SME champions drive the SME agenda and make it a priority, more use of e-marketplaces especially the Digital Marketplace, increased SME engagement and simpler procurement processes.
- More early pre-procurement market engagement
- Wider use of the digital marketplace – this should be the main route to market
- Simplifying procurement processes, fewer frameworks
- Supercharge ministerial SME champions
Commenting on the launch of the survey results, Ellie Huckle, Central Government Programme manager at techUK said “We’re delighted to be launching the results of this year’s SME Survey, however it is disappointing to see that this year’s statistics remain largely unchanged since last year’s survey – However, it is evident that the Government are trying and initiatives such as the Digital Marketplace and the success it has had in helping SMEs access the public sector tech market support this.
We know this won’t be an overnight fix, but we hope that with our new recommendations that Government will learn to really harness the capabilities of SMEs, and increase their understanding of how they small businesses can meet their needs so that these barriers can be overcome.”
You can view and download the full infographic at the bottom of this insight.