UK economy set for SME boost by 2020
11th November 2016 | News
Small and medium-sized enterprises (SMEs) based in the 10 biggest UK cities are expected to contribute up to £217bn to the national economy by 2020, according to a new study by specialist challenger bank, Hampshire Trust Bank.
The report, conducted in partnership with the Centre for Economics and Business Research (CEBR), suggests contributions from SMEs to the nation’s coffers will grow by 11 per cent from 2015 to 2020.
SMEs based in Leeds and Manchester are predicted to boost their value add to the UK economy by 15 per cent, with Bristol-based small firms forecast to increase their value to the economy by 14 per cent.
Although SMEs located in the capital are only expected to increase their value to the economy by 10 per cent, London tops the charts for total SME contributions to the UK economy, rising to £164bn by 2020 – more than three-quarters (76 per cent) of the total SME contribution to the national economy.
The number of SMEs operating in London is also expected to grow to more than half-a-million (534,035) by 2020, with potential growth driven by businesses in professional and administrative service sectors.
Mark Sismey-Durrant, chief executive, Hampshire Trust Bank, said: “Our report demonstrates the critical importance of SMEs as the engine room of the UK economy.
“Their sizeable contribution to the fortunes of the UK economy – growing to 27 per cent of total business contribution by 2020 – cannot be ignored.
“Our research with CEBR should be a source of optimism for the government and for employers as the strong future growth predicted suggests significant opportunity for investors, business owners and their employees.
“As the government prepares for the first Autumn Statement following the decision to leave the EU, I urge them to keep the spotlight on smaller companies by helping them to identify and achieve new business opportunities.”
Nina Skero, managing economist, CEBR, believes one of the biggest positives to come out of this latest report is the sustained increase in the number of SMEs operating outside of London.
“This study demonstrates there is a positive story to be told about the UK’s SMEs and it is encouraging to see such strong growth being mirrored outside of the capital,” said Skero.
“We expect the importance of SMEs to the country’s economy to increase in the coming years and hope this research will inspire business leaders across the UK to invest in their growth strategies.”
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