Chris Biggs, Partner at consultancy and accounting disruptor Theta Global Advisors, discusses why SMEs are at the heart of the fastest UK economic growth in decades.
UK economic growth forecast is full of optimism
Huge growth in consumer confidence, new business generation rates, and hiring plans leave small businesses integral as economy flourishes.
- 19% of UK workers who work at a small business have won previously inaccessible, large clients and grown as a business through Covid (3,687,000)
- Two thirds (66%) of Brits say that their trust in small businesses and service providers has grown during the pandemic (29,607,000)
Today, EY Item Club have announced upgraded economic forecasts for the UK following a stronger start to 2021 than expected, predicting the fastest growth the nation has seen since WWII. Throughout the pandemic, small businesses have had to be agile, adapting to working from home, the need for flexible working, and taking advantage of the opportunities the pandemic and our increasingly digital age have presented. The success of small businesses as a result of this, along with their position employing three fifths of the UK's workforce and a growth rate three times that of any other business type pre-pandemic positions them as integral to this rapid growth we have seen thus far.
Small businesses play a crucial role
This confidence in and on the part of small businesses and firms is further supported by research from Theta Global Advisors, a consultancy and accounting disruptor showing small business success during Covid-19. Research from Theta shows that small businesses that were nimble enough to adapt throughout lockdown saw tangible success, with 19% of small businesses having won previously inaccessible large clients and growing exponentially as a result.
Furthermore, consumer confidence in small businesses and service providers has increased dramatically, and more than a fifth (22%) of decision makers in this sphere are now looking to hire more employees and consultants this year to keep up with and continue the business growth trajectory they have seen since the pandemic began. Thus, despite the initial setbacks we saw at the beginning of the pandemic, we can see not only that SMEs are confident as we go forward, but how they have excelled during Covid-19. Their success has resulted in both consumer confidence and industry confidence, providing for the UK's economic recovery at a rate far beyond economist expectations, rivalling the success the UK saw as we came out of WWII.
- 66% of Brits say that their trust in small businesses and service providers has grown during the pandemic (29,607,000)
- More than a fifth (22%) of decision makers are looking to hire more employees or consultants this year in order to grow (2,561,000)
- 19% of UK workers at small businesses have won previously inaccessible, large clients and grown as a business throughout Covid-19 (3,687,000)
(nationally representative research carried out across a body of 2100 respondents, in full compliance with British Polling Council guidelines)
Chris Biggs, Partner at Theta Global Advisors - a consultancy and accounting disruptor - comments on the unprecedented success of small businesses in the last year and how this has seen 2021 exceed expectations for the UK's economic recovery as a result:
“With companies adopting new policies and a substantial number of SMEs planning to expand in 2021, it seems that as we saw over Covid-19, 2021 is an optimum time to be a small business. New business generation rates are at the highest they have ever been for many small businesses across a variety of industries, and this is proving to have significant impacts on the UK's economic recovery, boosting it beyond expectations.
To small businesses, this is great news, with increased public support and new, large clients allowing them to change the landscape and culture in their industries previously dictated by corporate giants. This unprecedented growth and influence comes at an opportune time for the UK economy as we return to a degree of normalcy. With SMEs accounting for three fifths of employment in the UK, their success is having ripple effects, employing more staff and giving our economy a much-needed boost.
In our concerns for what the future looks like for businesses with lockdowns, returning to offices, and economic recovery, we must not forget the success, innovation and resilience of small businesses in the UK. We need to continue to support these SMEs on their current growth trajectory, as the public have been doing more and more over lockdown. Our support of small businesses and their own confidence in their ability to grow is helping to see unemployment rates fall, and will be crucial in our return to a degree of normalcy and continuing our current trajectory of economic recovery."