High growth small businesses (HGSBs) represent just 3.4% of the UK economy, but contribute more than 10 times that to UK growth, and between 2012 and 2013 generated more than two thirds of all the jobs created in the UK.
These are the startling findings of a report, recently produced for Octopus Investments by The Centre for Economics and Business Research (Cebr), which reveal how HGSBs (defined as companies with average annual growth of 20%+ over a three year period and annual turnover of between 1m and £20m) were responsible for over 35% of UK economic growth in 2013. The number of HGSBs in the UK increased by 18% between 2011 and 2013 to approximately 30,000, and it is this cohort that is doing a lot of the heavy lifting in Britain’s economic growth story.
Unsurprisingly, London and the South East account for more than two thirds of HGSBs (10,900 companies), while the industry sector that boasts the most HGSBs is Services, with 61% of the total. The reason most commonly cited for constraining growth of HGSBs: finding the right talent and skills in a highly competitive marketplace.