New figures from the Office for National Statistics released today show that the UK economy grew by 0.4% in August, the first full month after the lifting of Coronavirus restrictions on businesses and services. The rise comes as estimates from the International Monetary Fund put economic growth predictions at 6.8% for the year of 2021, outpacing both the Eurozone and the US.
These figures have been greeted as positive news by both economists and business owners hoping for further growth in the coming months. A large part of this community are small and medium sized businesses, which make up 99.9% of private sector firms and employ nearly 60% of the workforce, of which over 800,000 were founded in 2020 in the midst of the strictest restrictions and lockdowns.
The importance of this section of businesses to the UK economy is therefore clear, with SMEs hiring at a rate three times higher than larger rivals prior to the pandemic and creating Unicorns at a rate of over one a week. They are also key to the UK's trade balance sheet, with thousands exporting all around the world. Investors have seemingly recognised this too, with 16% planning to back startups and SMEs in the next year according to IW Capital's research.
Luke Davis, CEO of IW Capital discusses the importance of SMEs to the UK economy:
"There is a significant desire to startup and go it alone, which looks set to continue in 2021 and beyond as the desire to support small firms grows from the point of view of both consumers and investors, as our research shows. I believe that the success of the SMEs of the UK and the economy as a whole are inexorably linked, especially over the next few years.
"There is a huge amount of talent and ambition in Britain's entrepreneurial ecosystem and helping them to grow and innovate should be high on the government's agenda. The figures released today provide a solid point on which to build, there are, of course, challenges to overcome but after working with SMEs for over a decade I know they will overcome them.”