Regional diversity means national growth
Read the findings of Barclays Business Regional Impact Index 1, published in conjunction with Kingston University, which shows the role SMEs (Small and Medium Enterprises) are playing in boosting recovery of the UK economy.
The hero regions
- London, South West and Wales lead the index of small businesses making substantial contributions to their home regions
- Yorkshire and Humberside have the highest proportion of businesses that made a profit
- Businesses in the South West lead on innovation
- Firms in Central England have seen the greatest increase in turnover and are the most bullish of regions on future job creation.
National growth needs local investment
For a really thriving local economy, we need local people to trade with their local businesses and boost employment.
In our study, the average SME made almost 60 per cent of its sales and 55 per cent of its purchases within the local region. This shows that the contribution of small businesses to the overall economy has never been greater. Small businesses have, and continue to, contribute to the resilience of local regions amid unstable economic conditions and public sector cutbacks. They are without question, driving growth and creating jobs in every city in the UK.
SME jobs are stable jobs – even in recession
Three years ago, at the beginning of the economic downturn, small businesses employed an average of 11.7 people. That figure is now 12.8. Nine of those jobs are full time but their part-time roles are also vital, offering jobs and incomes to people who may not be able to work full time.
SMEs are also confident about employing more people over the next 12 months, with owner managers saying that they expect to increase staff to an average of 14.8 people, mainly in new full-time roles.
99.7% of all UK firms employ less than 250 people
Within the UK, 99.7% of all firms employ less than 250 people and their importance to local and regional economies as well as the national economy cannot be overstated.
Currently, small businesses account for 59.4% of private sector employment and 50.1% of private sector turnover, which the Department for Business, Innovation and Skills estimates to be £1.5 trillion.
Many of the owner-managers we talked to emphasised their production of high-quality goods that are distinctive to their region.
These products cannot be easily produced (if at all) in a low-cost market overseas and these firms provide a solid base for the return of manufacturing and are central to a balanced national economy.
Jobs for graduates
SMEs also employ high levels of university graduates.
Over 62% of owner-managers and 40% of employees had a degree and 13 per cent of the firms in our survey were looking to employ first-time graduates in 2011.
Almost two-thirds of the firms we surveyed have introduced new products or businesses to their business and 16% to their business sector within the past three years.
Innovation and entrepreneurial thinking are almost a given.