How is the Economy Growth in the UK?

Are Small Businesses Helping?

As well as being the major source of job creation in developed economies, small businesses are critical to driving economic growth through innovation and market expansion. There is growing evidence of the economic significance of the small proportion of businesses that exhibit high growth, in all regions of the country and in all industry sectors. The economic impact of increasing the population of high growth businesses, would be significant.
A few months after the start of the recession in 2008, unemployment started to rise sharply. When the global financial crisis hit, the unemployment rate was a little over 5% or 1.6 million.
Towards the end of 2009, with the UK coming out of its severest recession since the 1950s, it was almost a million higher at 2.5 million, or 8%. Unemployment peaked at almost 2.7 million at the end of 2011, its highest level for 17 years. Seeking release from unemployment and stagnant wages, more and more people have taken the plunge and started their own businesses.
Here are some reasons why new start-ups are on the increase:

• TV Shows such as The Apprentice and Dragon’s Den have been inspiring people to become entrepreneurs: inventing products and setting up their businesses, capitalising on their existing skills and work experiences.

• The government is actively encouraging people to start their own businesses, because the revenue generated by these start-ups are significant to the economy and can give create job opportunities. As a result there are lots of grant schemes available.

• Everyone has at least one sellable skill. They simply need to find a way to sell it.

• There are lots of websites, magazines and blogs which focus on helping you to start and run a business. Within these are also opportunities to attend business events, in which you can network and build relationships with business experts.

• You can get a mentor whose experience and knowledge can be a huge confidence boost as well as provide useful contacts and advice.

• The advancement of the internet means that you can now market and sell your services or products overseas, reaching whichever audience you choose to target.

• Start-ups can help each other. For example, a new business might need some free advertising in a magazine… Enter a new freelance writer trying to make a name in the industry: Put the two together and you get a writer with original content and interview under their belt and, if it’s published, the new business is being advertised in the form of an interesting article.

• There are businesses that exist purely to help other businesses grow, which creates a cycle of growth when they in turn are used by the companies requiring their services. For example, there are growth accelerator companies, marketing and media companies, printing businesses etc.

• There is a host of courses available for anyone to learn the skills required to run a business. They are made easy and accessible as they are run varying times of the week and month, online, as well as on campus.

• One business can generate income not only for the business itself but for other businesses – accountants, company formation houses, suppliers, distributes, designers, printing presses, website designers etc. At one point or another, every business will use the services of another business, thus increasing revenue to all involved in the chain.

UK Company Formation Figures 2012 / 2013
Here are the Companies House formation statistics for 2013 compared with those for the previous year.

• 517,210 companies were formed in 2013 compared with 479,545 in 2012.
• The only month in 2013 that saw fewer companies formed than its 2012 counterpart is March.
• April has the greatest difference between 2012 and 2013 with the latter forming 7,649 more companies.
• In 2012, March witnessed the most formations. In 2013, October takes the honours, followed by April.
• December saw the fewest formations over both years.

The Start-Up Tracker
The StartUp Tracker is an authoritative statistic showing how many businesses are being set up each day in the UK, offering regular and accessible insight into the growing self-starter trend for the first time.
Emma Jones, business expert and StartUp Britain co-founder said: “We’re seeing record numbers of people setting up a business. Our StartUp Tracker will offer a daily confidence boost to anyone thinking about starting up. We felt it was vitally important to capitalize on the emerging optimism in the start-up sector and our tracker statistics will not only make for interesting reading, we hope they will offer an Olympian boost to those who might find encouragement by finding out that they are not alone!”
Intuit has partnered with StartUps Britain to offer £20,000  to 11 new start-up companies. There will be ten winners of £1000 and one winner of the £10,000 grand prize. With incentives like this on the table, it’s no wonder start-ups are the rise.
Predictions for the Future

• According to a study by the Centre for Economics and Business Research (CEBR), China will overtake the US in 2028, with the UK to overtake Germany ‘around 2030’.

• The UK’s economy will be benefited by population growth, which will put it in a position to overtake France and then remove Germany from top-spot, the CEBR says.

• Earlier in December 2013, the British Chambers of Commerce predicted that in 2014 the UK economy will surpass its pre-recession peak.

• The UK is projected to become the world’s fifth largest economy in 2018 by overtaking France.

• But by 2028 the UK economy is expected to be only 3 per cent smaller than the German economy and is ‘likely’ to overtake Germany to become the largest Western European economy around 2030.

As of 3^rd March 2014, the number of new business start-ups since the New Year is 91462, which already is outstripping the figures in January and February 2013. Company formation agents and Companies house continue to see a steady increase in the amount of new companies forming. If this rate continues to rise at the level of last year, then 2014 is looking to be a very good year for economy growth.