22nd August 2019

Small Business

Even in the current crisis, the environment and climate for business, and in particular small business, in the UK is generally better than in continental Europe.
There is less bureaucrocracy, less red tape and more informality overall.

A few figures will give an indication of that favourable climate.
There are currently 4.3 million SMEs (Small and Medium Enterprises) in the UK, with a total turnover of £1,200 billion.
More than half of the British employed population work for them.

"When unemployment in Britain goes down, it is because Small and Medium Enterprises hire more people."

Most of them are small businesses, defined as having 1-49 employees. Only 26,000 of them are medium sized, with 50-250 employees.

The effect of this army of relatively minor enterprises on the country's employment levels is in fact very big: when unemployment in Britain goes down, it is because SMEs hire more people.

If the environment for small business in the UK is generally good, at this moment it is even more favourable.
The proportion of the country's workforce employed by SMEs grew last year to its highest level in 9 years: 58.5% of the national workforce, that is 12.9 million people.
In the last 7 years, SMEs have increased in number by 300,000.
The annual Global Entrepreneurship Monitor (Gem) for last year places the UK ahead of Germany, Italy and France for entrepreneurial activity.

As for regional diversity, the traditional gap between North and South is narrowing.
Three regions: the northeast, East Midlands, and Yorkshire and Humberside, made significant progress last year.

The landscape of UK working life and commercial activity has changed a lot and is still changing.
More and more people than ever before prefer to work for themselves, often from home, because of the new lifestyle, for instance because women now work more than in previous times, but women generally are more in need of flexible work hours and part-time occupations, which give them more time to look after their kids.

"There are 6 million self-employed people in the UK, and growing" says Richard Duvall, CEO of Zopa, a kind of public exchange that matches borrowers and lenders. "They are everyday entrepreneurs: freelancers, consultants, people changing careers or starting their own business, and they are not being well served by the mainstream banks.
"The high street banks have a very 1970s system of credit assessment, that only really works for salaried people."

In the last few decades, many changes have occurred. Job for life is not so much a possibility now as it was in the 60s and 70s.



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