That’s the warning from new research by Umazi, a digital identity platform for business verification, which reveals a troubling disconnect between government ambition and real-world delivery.

According to the findings in the Umazi report, Broken ID, Broken Growth: The UK’s Verification Chokehold, based on a survey of 500 SMEs, over 60% say there is little to no meaningful government innovation aimed at helping them thrive. A further 38% believe progress is too slow, and 28% point out a lack of coordination between agencies as a critical obstacle.

“The UK government talks about innovation, but SMEs are still stuck in a system built for the last century,” said Cindy van Niekerk, CEO and Founder of Umazi.

“Our most dynamic businesses are wasting time, money, and momentum fighting outdated processes, while policies remain in permanent planning mode.”

Confidence in the UK as a business-friendly environment is slipping. Only 32% of SMEs believe the government genuinely prioritises creating a climate for prosperity, and 22% now see other European countries as offering better growth opportunities.

Strategies like the UK Digital Strategy 2025 and the AI Playbook showcase long-term vision. Digital integration is also keystone in the UK Industrial Strategy 2025 being recognised as essential to unlock productivity, sustainability, resilience, and innovation across the economy. Yet over 70% of SMEs say they haven’t seen these initiatives deliver practical change. On the ground, business leaders still face basic barriers – weeks of paperwork, repeated verification, and fractured support systems.

“AI might be transforming public services,” van Niekerk added. “If SMEs still can’t open a bank account or access funding without being buried in documents, what’s the point? There’s a glaring gap between ambition and execution, and it’s growing wider by the day.”

The report outlines how fundamental processes – verifying a business identity, applying for a loan, and onboarding with suppliers remain inefficient and uncoordinated. For SMEs, these delays don’t just mean frustration, they mean missed growth, lost contracts, and declining confidence.

“The message from SMEs couldn’t be clearer: government support isn’t reaching them,” van Niekerk said.

“We’re calling on the government to move beyond strategy papers and deliver real, joined-up, digital-first infrastructure that empowers businesses to scale – quickly, efficiently, and confidently.”

While departments publish roadmaps and commit to transformation, SMEs remain trapped in systems that no longer serve them. Red tape, disjointed infrastructure, and slow policy delivery are not just stalling growth, they’re weakening the UK’s economic resilience.

Van Niekerk concluded: “Across the world, business is being rewritten in real time – driven by data, speed, and seamless digital infrastructure. Yet while other nations equip their entrepreneurs with the tools to thrive, UK businesses are being held back by paper-heavy systems and policy inertia. Entrepreneurs cannot power recovery or innovation when they’re still battling processes designed for a different era.

“If the UK is to remain a serious player on the world stage, it must back its entrepreneurs with more than ambition. It must provide the tools, the reform, and the accountability that turn strategy into progress. Businesses have waited long enough.”

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