One in every three new jobs created by high-growth UK small businesses
There are now over 22,000 small firms in the UK with turnover of between £1m to £20m and 20% year-on-year growth
One in every three new jobs in the UK last year was created by high-growth small businesses (HGSBs); defined as small companies with turnover of between £1m to £20m and 20% year-on-year growth since over the last three years.
The finding comes from a new report by Octopus Investments which claims that this “group of UK companies are punching above their weight by making a significant contribution to economic growth.”
The report suggests that there are now 22, 470 HGSBs in the UK, contributing 20% of economic growth and 4,500 new jobs on average each week in 2014 – three times more than the entire FTSE 100.
However, the economic contribution of HGSBs is regional and sector specific.
Almost three in every five of these companies comes from outside London while areas such as Northern Ireland, Wales and the North East are more reliant on HGSBs for their economic growth. 65% of HGSBs come from the services sector while just 10% are technology companies.
Octopus has called on the government to target a 25% increase in the number of HGSBs across every UK region by 2020; a target which, if reached, would create an additional 170,000 new jobs and £22.5bn turnover.
Simon Rogerson, CEO of Octopus, commented: “High growth small businesses are a national opportunity – they can be found in every region of the UK and across every sector but are all too easily lost within the broader small business universe.
“We need to do everything we can to enable them to thrive as they are proving that they are not just a London and South East story. There is a real need for more of these extraordinary businesses to exist across the country to bring prosperity and growth to every region.”
Sajid Javid MP, secretary of state for business, innovation and skills, continuedL
“Raising our economy's productivity depends on supporting the growth of new and existing businesses.The Octopus High Growth Small Business Report 2015 gives us valuable insight into the growth potential of many small businesses.”