More than 3,000 new jobs created every week by these businesses across the UK
A tiny group of UK companies are punching well above their weight showing they can be a significant force in driving the country’s economic growth, increasing UK productivity, skills and employment, according to a report published today.
One in every five new jobs in the UK and more than 20 per cent of economic growth was created by high growth small businesses between 2015 and 2016. Representing less than 1 per cent of UK business, these 22,074 companies created on average more than 3,000 new jobs each week.
The Octopus High Growth Small Business Report 2018, commissioned by Octopus Group (Octopus) and produced by the Centre for Economics and Business Research (Cebr), highlights the significant economic value of the UK’s fastest growing smaller companies. HGSBs are defined as companies with more than 20 per cent average annual growth over three years, and between £1 and £20 million of annual turnover.
Overall it is estimated that HGSBs contributed £62bn to the UK economy every year, equivalent to £1.2 billion every week. The report revealed that HGSBs are significantly more productive than the average business creating an additional two months of economic output every year compared to the average UK business.
However, this year’s report, the third edition of the publication, revealed that the UK is failing to realise the full potential of these businesses. HGSBs are waning in number and their economic output fell by 9 per cent year on year with 90 per cent of them stating that they face some form of skills shortage. By comparison only 17 per cent of UK average business cited experiencing skill shortages.
The report found overwhelming evidence that skills shortages, digital infrastructure and poor transport links are preventing HGSBs from achieving their full potential.
- 61 per cent of HGSBs believe technical or practical skills to be difficult to obtain when hiring staff
- 60 per cent of HGSBs consider talent shortages to be important or very important constraint to their business growth
- One in three HGSBs consider digital infrastructure to be one of the biggest constraints to the growth of their business
- 53 per cent of HGSBs in London say poor transport links with other regions is a hindrance to their business
Chris Hulatt, co-founder of Octopus Group, comments:“It’s abundantly clear that, despite being small in number, high growth small businesses are disproportionately important to our economic growth, especially as Britain looks to a future outside of the European Union. We need to ensure that they are given every opportunity to flourish and grow. By championing these businesses and implementing the right policies to unlock their growth potential, they can continue to boost employment and productivity across the country.
“At Octopus we have first-hand experience of seeing the economic and social difference these companies are making. The Government has done a great job in supporting entrepreneurship in the UK but more needs to be done to tackle some of the growing challenges these businesses face.
“The Chancellor made clear in the Spring Statement that he is committed to the UK being a beacon of enterprise and innovation. High growth small businesses illustrate the benefits of supporting an entrepreneurial economy, and we are pleased that our report once again shines a light on these remarkable businesses that are bringing jobs and prosperity to all parts of the country.”