A fraction of small businesses in the UK play the biggest role in the country’s economic growth, a report has revealed.
With the UK back in recession, politicians and financial experts are looking at ways to boost the country’s struggling economy in the face of continuing job losses and turmoil in the eurozone.
But a report published by Santander Corporate Banking has found that less than 5% of small businesses in the UK play the biggest role in boosting the country’s economy.
Dubbed Growth Champions, this group of small businesses was found to be responsible for two thirds of all private sector employment – making them vital to the UK’s economy and its recovery.
“This research shows a small group of businesses make an extraordinary contribution to the UK economy,” said John Williams, Head of Santander’s Breakthrough programme.
“These Growth Champions demonstrate a fantastic ability to excel against the backdrop of difficult trading circumstances, delivering significant growth in both employment and net worth,” he added.
The research found that these small businesses fared better than most during the recession of 2007 and 2008, creating more than 170,000 jobs.
This is all the more impressive given the performance of many other similarly sized companies during the recession, shedding more than 400,000 jobs.
“Contrary to popular thinking, these champion businesses operate across a wide range of industry sectors and are spread evenly across the UK, proving that fast growth is not confined to the technology industry or the South East,” added Mr Williams.
The report looked at the growth patterns among businesses with a turnover of between £500,000 and £10 million, across a number of industry sectors.
The highest concentration was found in the social work sector, with 14.5% of Growth Champions coming from this area, followed by complementary medicine such as homeopathy with 11.4%, and architecture and engineering activities at 7.7%.
Santander has argued that by identifying common elements to these well-performing businesses, economic growth will be able to accelerate.
“Banks have a responsibility to support businesses to accelerate growth at all stages of their lifecycle,” said Mr Willams
“Using the common characteristics exhibited by Growth Champions, we can identify the fast-growth businesses of the future and provide the support they need to help them fulfil their potential,” he added.
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