Rural small businesses continue to face disproportionate struggles due to poor infrastructure in key areas such as digital connectivity.

The Federation of Small Businesses (FSB) published their report, ‘The Growth Belt: Support for Small Rural Businesses’, finding that rural areas are still facing the challenges surrounded unequal economic investment.

The report said that, despite rural areas playing host to an array of diverse small businesses – from family-run shops to start-ups – their productivity rate is in decline.

A major hurdle found in the report was the stark reality of rural digital connectivity: despite government promises and initiatives, rural areas still struggle to receive adequate connectivity in order to run productive businesses.

Key Findings

Almost a third (32%) of rural small businesses continue to report issues with their broadband, with Only 17% of their urban counterparts reporting.

Further, the research revealed that twice as many rural businesses reported that unreliable broadband has affected their ability to contact customers (14% vs 6%), reduced the competitiveness of their business (11% vs 5%) and lead to a loss of business or sales (10% vs 5%).

While the statistics are still low for both rural and urban areas regarding these perceived issues, the inequality is apparent.

Overall, only 58% of rural small businesses state that their broadband speeds are sufficient for their current and future business needs.

This leaves a remaining 42% struggling to get efficient broadband for their business.

Recommendations 

The FSB has provided several recommendations for improving digital connectivity for rural small businesses.

First, the UK Government should update the Universal Service Obligation minimum requirements for upload and download speeds so businesses are ensured the right to decent broadband speeds. As well, they insist on a ‘fairer’ cap of £35 per month.

The report included strategic reconfigurations of current government initiatives to better serve areas in most need.

This includes the government ringfencing a proportion of the Project Gigabit budget to better support the most hard to reach areas with faster broadband speeds.

Further, the FSB insists that the Department for Science, Innovation and Technology ensures that the Shared Rural Network meets its 2025 target of 95 per cent 4G coverage across the UK.

The UK government has released a new 10 point plan to improve rural connectivity, which include the two projects mentioned. They also plan to change regulations to increase the speed of broadband rollout. Part of the plan also includes asking broadband providers to offer coverage to areas where it would normally be ‘uneconomic’ to invest in.

The FSB also calls on Ofcom to make current Voluntary Codes of Practice for broadband providers compulsory, and extend current compensation schemes to include business contracts.

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Following this, they also call on broadband providers themselves to make it easier and more affordable to leave contracts before the minimum contract term has expired.

“Rural areas hold enormous potential for businesses to thrive and contribute to their local communities and the larger economy. To do this, these businesses require sustained support to weather the challenges and investment in essential infrastructure,” Michael Weedon, Place-based Economy and Local Government Policy Champion at FSB said.

“By nurturing and empowering rural small firms, we can unlock their full potential to drive growth and prosperity for generations ahead.”