By Daniel Hunter

The success of small and medium-sized enterprises (SMEs) in winning Government and private sector contracts hinges on collaboration with larger firms a new report reveals, with just 6% of SME owners believing it has become easier to win these contracts independently in the last two years.

The Collaboration Nation report, commissioned by technology firm Fujitsu and drawing on the views of around 500 UK SMEs, reveals that while smaller businesses are struggling to secure direct business from government, many want to collaborate with larger suppliers and see doing so as the most viable route to winning large contracts.

“SMEs have much to offer customers both in large enterprise and within government — they provide the kind of agility, innovation and flexibility that can deliver great results for their customers” said Duncan Tait, CEO of Fujitsu UK & Ireland. “What we hear from SMEs though is that there are three main barriers to winning contracts directly from Government and large enterprises — the complex bidding processes; the cost of bidding and the risks involved.

“The steps the Government has recently announced to ease the bidding process for smaller suppliers are incredibly positive; but Fujitsu believes that the other two barriers — the costs in bidding and the risk issue — can only be mitigated by working in collaboration with a larger partner who is better equipped to absorb them. Together, government, large enterprise and SMEs need to come together to make that relationship work for the long-term benefit of the UK.”

The study, conducted for Fujitsu by an independent research agency, shows that just 6% of SMEs have found it easier to win government business direct in the past two years and 50% noted that there had been “no change” in their ability to win government work, results that support the current Government focus on improving access for SMEs to the public sector bidding process.

Building on these measures however, SMEs believe it is collaboration that will give them the best access to large contracts. 58% of SMEs believe that smaller and larger suppliers should collaborate to win large contracts — but 43% warn that in their experience it rarely happens.

When collaboration does occur, SMEs reveal that it helps them reap significant rewards. 70% who have won business this way believe that they couldn’t have done so without the support of a larger partner; 62% say that they believe this kind of partnership is a good idea and 80% of those who have worked with big companies to win business keen to do so again.

With SMEs citing a wide range of benefits — from greater revenues, new opportunities and the chance to tender for work they feel they would otherwise be excluded from — collaboration appears to be a major priority for many.

“There can be little doubt that collaboration between large and small business has profound implications for growth in the UK,” said John Cridland, director-general of the CBI. “We are blessed with a buoyant and energetic SME sector, and one which clearly understands the benefits that can be achieved by working collaboratively with larger counterparts. The clear imperative from this report is to tackle, in any way possible, the barriers that stand in the way of those partnerships.”

“What is clear here is that this is not about trying to make it easier or more appealing for SMEs to tender directly for commercial or governmental work”, concluded Tait. “The big wins for the UK economy are in enabling and incentivising SME and large partners to work together for the benefit of all.”

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