UK entrepreneurs now rank 4th in the world for economic impact

The UK now ranks fourth and second respectively in G7 economies for economic impact and entrepreneurship.

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The UK is fourth in the world and second out of the G7 economies, in a new ranking of the impact of entrepreneurs on their overall economy from Shopify.

The results were debuted in the Shopify Entrepreneurship Index, a new study that provides data and rankings on 40 countries around the world. It was conducted in partnership with Deloitte using data from entrepreneurs in the Shopify ecosystem and supplemented with data from IMF, OECD, and World Bank. 

According to the index, entrepreneurs in the UK grew their exports by 8% in the last year at a value of over £3.2 billion, supported almost 200,000 UK jobs, generated £28.8 billion worth of business activity in 2022 and contributed £14.3 billion in GDP impact.

What makes our UK SMEs different?

The research from the index also shows that UK small and medium-sized enterprises (SMEs) have been bucking trends seen in other sectors of the economy. 

For one thing, UK businesses were second in export growth only to the USA. This follows data released from Shopify which showed that merchants in London sold the most products globally in 2022 from Black Friday through to Cyber Monday, with one in four (24%) sales for UK merchants being cross-border. This is unusual since these holidays are not primarily celebrated in the UK, but is a testament to the drive of the UK entrepreneurs to use every opportunity at their disposal.

As well as progressive sales and export growth in London, further data suggests that improvements in digital tools and infrastructure have also been helping regional economies across the UK to level up.

60% of entrepreneurs are now based outside of major cities and metropolitan areas – demonstrating that location is no longer a barrier to growth.

The UK’s success may also be attributed, in part, to incentives and support structures to help UK entrepreneurs succeed. Initiatives such as the British Business Banks’ Start Up Loans programme and the UK Government’s recent expansion of investment reliefs have helped some  UK entrepreneurs to attract and retain talent. Investment in British export support, such as through the Export Academy, has also enabled  UK businesses to try out international markets.

However, this support has been in danger recently in general due to the current state of the economy, with banks now reining in SME lending according to a recent Iwoca report, and venture capital slowing down for UK entrepreneurs in general.

More on this: Cost of living statistics small businesses can’t ignore 2023 [Updated]

Maintaining our G7 ranking

Despite the high rating, the impact of local entrepreneurs on the UK’s gross domestic product measurement (GDP), often used by the government of a single country to measure its economic health, saw a 1% reduction from the same time period last year.

There is a danger therefore that the UK could fall behind other nations in our G7 ranking (i.e., our status as one of the world’s most advanced economies) if the UK government continues to neglect and overlook UK entrepreneurship. 

This was highlighted in the lack of consideration for SMEs in the 2023 Spring Budget

In order to mitigate this, revisiting incentives for UK SMEs to digitalise is considered essential for the UK to compete. The digitalisation of UK exports, particularly through the Government’s Electronic Trade Documents Bill, could also help UK SMEs cut through friction to export to the rest of the world. 

Deann Evans, Director of EMEA Expansion comments: “It’s great to see the UK ranking fourth overall in spite of the challenging economic climate we’re in. However, as other nations bolster their support ecosystems, provisions need to be made if the UK is going to maintain its status as a leader amongst the G7 economies.” 

“The Shopify Entrepreneurship Index will serve as a barometer on the state of global entrepreneurship from the Shopify ecosystem,” continued Evans. “Providing policymakers with the insight they need to inform their decisions on how best to support entrepreneurial growth.”

Evans also lent her expertise in the ecommerce space to help judge the 2023 Startups 100 ecommerce awards. The 2024 index is now open for applications and is an excellent opportunity for you to showcase and celebrate your business to new audiences. See who made the grade last year here. 

For more information on how to apply, check out our top 5 tips to boost your Startup’s 100 entry. Alternatively, head here to apply now.

Interested in learning about some famous entrepreneur stories?

See: 10 famous entrepreneurs (and the key business lessons they demonstrate)

Written by:
Stephanie Lennox is the resident funding & finance expert at Startups: A successful startup founder in her own right, 2x bestselling author and business strategist, she covers everything from business grants and loans to venture capital and angel investing. With over 14 years of hands-on experience in the startup industry, Stephanie is passionate about how business owners can not only survive but thrive in the face of turbulent financial times and economic crises. With a background in media, publishing, finance and sales psychology, and an education at Oxford University, Stephanie has been featured on all things 'entrepreneur' in such prominent media outlets as The Bookseller, The Guardian, TimeOut, The Southbank Centre and ITV News, as well as several other national publications.

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