Finding skilled people, especially those who can win business and use the latest technology, has topped the list of challenges smaller businesses say they face, up from third place last year.

The result is reported in the fourth annual Albion Growth Report. 

This is the first time that SMEs have identified a shortage of skilled staff as their biggest obstacle to growth, ahead of red tape and regulations, which were in second and third places, respectively.  

The research is carried out by YouGov for Albion Ventures, one of the largest independent venture capital investors in the UK.  It involves more than 1,000 SMEs across all business sectors and reveals that while half of small businesses with more than five employees want to recruit more skilled people in the next two years, finding those skills is their biggest concern. Companies in London, the South East and the North West are most worried.

Leaving the EU was ranked sixth place, suggesting that many small business owners are comfortable with Brexit.  

The report says the technology skills gap is widest in Scotland (34%) and London (25%).

Patrick Reeve, Managing Partner at Albion Ventures, says of these results: “The economy is coming under capacity constraints at a time of considerable political uncertainty. Policymakers charged with deciding our post-Brexit future must recognise that many of the skills that enable us to compete in a fast-changing and increasingly competitive world are in short supply and our best chance of overcoming this challenge is by building on the UK’s first class reputation as a home for global talent.”

Click here to see a full copy of the report.