Britain’s fastest growing small companies bring prosperity to the UK
A recent report was released regarding Britain’s fastest growing small companies and how they compared region by region. High growth small businesses (HGSBs) are companies that are achieving more than 20 per cent average annual growth in turnover over a three year period and with an annual turnover between £1 million and £20 million. There are only 22,470 in the UK out of 5.3 million companies. HGSB make up less than 1 per cent of UK companies but created one in every three jobs (34 per cent) in the UK in 2014, that’s three times the number of jobs created by FTSE 100 companies.
Although HGSBs are only a minuscule percentage of UK companies, they contribute a phenomenally large amount to the economic wellbeing, job creation and drive growth at an impressive rate. They’re growing in every business sector with 65 per cent in the service sector particularly in admin and support and construction. Surprisingly, only one in ten HGSBs are in the technology sector.
HGSBs are everywhere in the UK with three in five based outside London and the South East. There is success to be seen in every region although some parts of the UK have less such as Wales, Northern Ireland and North East of England. London has the highest density of HGSBs with others being quite evenly spread across other parts of the UK.
In 2014 HGSBs in London generated £28 billion in turnover, that’s more than a third of the turnover for all HGSBs across the UK. Suprisingly even though the North East and North West has a below average share of HGSBs provided 11 per cent of the total HGSB contribution to UK.
HGSBs are drawn to high-performing economic regions which in turn bring further growth, dynamism and competitiveness. On the contrary, regions where economic regions are less favourable and successful tend to attract less HGSBs and consequently broaden the gap between prospering regions and those that are falling behind. The quality of the local business environment is the most important factor for HGSBs when deciding where to locate, followed by the strength of the local infrastructure and how well connected the area is.
HGSBs create growth wherever they place themselves but it impacts strongest on regions that are lacking this sort of economic boost. They bring new activity, commerce and employment to the area causing a rush of energy and confidence. They create a demand for services and infrastructure, setting off new cycles of innovation and opening up new opportunities and attracting similar businesses.
These companies are positively impacting the areas in which they set up by providing new employment opportunities, encouraging investment from other HGSBs and large institutions to improve the lives of thousands. The frameworks for attracting HGSB need to be improved to create opportunities for new HGSBs as they become a force for regional revival, re-balancing our national economy and bringing new prosperity and optimism to every part of the UK.