Report: Analyzing the Impact of SMEs on the UK Economy

This report provides an analysis of the impact of small and medium-sized enterprises (SMEs) on the UK economy. It begins by defining SMEs and outlining factors that stimulate their growth, including social, economic, and political influences. The report examines SME trends over the past five years, highlighting growth rates and survival rates. It then compares the performance of SMEs across different UK regions, specifically focusing on London and the West Midlands. Furthermore, the report analyzes the impact of SMEs in various industries, contrasting the education and music sectors. Finally, the report compares the SME landscape in the UK with that of Romania and the Czech Republic, providing a comprehensive overview of the sector's contribution to the economy.

SMALL BUSINESS IMPACT
ON UK ECONOMY

TABLE OF CONTENTS
INTRODUCTION
CONCPET OF SME
FACTORS THAT STIMULATE SME
ANALYSIS FOR PAST 5 YEARS
COMPARIOSN FOR TWO UK REGIONS
COMPARISON FOR TWO INDUSTRIES
COMPARISON FOR TWO EU COUNTRIES
CONCLUSION
REFERENCES

INTRODUCTION
 SMEs are an important part in the overall development of the economy today
and this presentation will evaluate the different trends and figures that are
associated with their development and expansion in UK.

CONCPET OF SME
 Small and Medium sized enterprises (SMEs) are those companies where the
number of employees are less than 250 and the annual turnover must not
exceed the limit of £ 50 million.
 The SME’s are usually based on an innovative or new idea and increase the
employment at a local level as the area of operation is also limited in
comparison.

FACTORS THAT STIMULATE SME
 Social Factors:
 Social factors have a positive influence over the growth and prevalence of
SME’s in the UK’s economy. However, the different factors of education level
or immigration level can affect negatively as well.

CONT.
Economic Factors:
The economic factors have also proved to be favourable
for UK where the growth of the economy has been
consistently rising in the recent years.
Political Factors:
The political stability in UK has been well maintained
thus creating a positive influence for the increased growth
of SMEs.

ANALYSIS FOR PAST 5 YEARS
The overall growth in the number of SMEs in UK has
grown significantly in UK as the flexibility that is
available in the conduction of the different business
function and completion of different duties as well.

CONT.
It can be observed that the number of business related to SME
has increased significantly in the last years, but the overall
survival rate has been lower where the survival rate for SME
that have started after 2013 has been as low as 42.4%.
However, the rate of increase has been still with a growing
percentage where the overall increase in the number of SMEs
have been from the rate of 4.3 to 5.2.
The 50% of SME’s of that operate in UK tend to fail however
as the overall resources that are available to these SMEs is
comparatively limited and the targeted customer base is also
restricted.

COMPARIOSN FOR TWO UK REGIONS
London has an approximate number of 1544 businesses
currently on every 10000 adults that fall under the
category of SMEs.
Since the economy of London sis a never stopping one
and the growth has been the fastest in this region, the
increase in the number of SMEs in London has been at the
highest rate of 52%.

CONT.
The west midlands on the other hand are not a very
prominent area of growth. The growth here has only been
by an estimated 34% only.
In West Midland, the growth of the SMEs has been for an
approximate 7% which is much better than the negative
rates that are being shown by the other areas such as north
east, east midland etc

COMPARISON FOR TWO INDUSTRIES
 In the year 2019 alone, there were around 306915 new educational institutes
that were opened in UK at a smaller scale of operation.
 These collectively constitute a 5.23% of the total number of small businesses
that were opened and are operating in UK.

CONT.
The music industry is also a widespread business in its
own but rather than having a separate category of its own,
it is included under the arts, entertainment and recreation
industry.
In this industry, only 289885 new businesses were opened
in 2019 and the overall contribution of these new SMEs
account for an approximate 4.94% only in the total
businesses.