Impact of Small Medium Enterprise on UK Economy

This document discusses the importance and impact of small and medium-sized enterprises (SMEs) on the economy of the UK. It explores how SMEs contribute to job creation, GDP growth, and overall economic development. Statistical analysis is used to highlight the significance of SMEs in driving economic growth.

Social entrepreneurship- These type of organisation are having a motto of creating
a better world through providing social services and basis amenities to deprived or
poor or helpless people. Social enterprises are focused on creating equality in
society and works for upliftment of vulnerable group. Save the children is a type
social entrepreneurship or NGO of UK which is making efforts for betterment of
children and aim at providing a safe environment for survival of children and
creating better education and economic opportunities for them (Gartner, 2019).
Types of typology
A group of people who are having similar characteristics and features are
termed as a typology. Entrepreneurship or entrepreneur can be classified into
various group or typology which are explained below:
Male entrepreneurs- The common features of male entrepreneurs are that
they enjoy taking risk and are always focused towards better growth and
expansion of business venture. Male entrepreneurs are more alert and aware about
recent technological change and keeps on making innovation and technological
improvements in its business venture. Male entrepreneurs mainly deals in large
construction organization or in IT firms where they get better opportunity to show
their skills and creativity (McMullen, 2019).
Female entrepreneurs- These type of entrepreneurs are more conservative and
avoid taking higher risks. Female entrepreneurs mainly operates a small business
and maintain a good relation with its customers and other stakeholders. Females
entrepreneurs are more responsible towards society and always try to fulfil their
corporate social responsibility and works for welfare of society and its
stakeholders (Pages, 2019). Female entrepreneurs are more attracted towards
fashion industry and small retail shops and mainly deals in clothing and other
fashion accessories.

Scale of
operation
Large company
operates at high
scales and have a
vast are of
operation and
mainly have a
large product
portfolio to attract
more customers.
Local and small
business mainly
operates at local
level and its
services are
limited to local
areas.
Scale of operation
of social
enterprises
depends upon the
numbers of
employees and
amount of charity
and donation.
Geographical
area served
They mainly
operates at
national level and
always have their
headquarters in
big metropolitan
city. They always
desires to expand
their business up
to global level to
get better market
share am to
attract more
customers.
Only a limited
geographical area
is served by these
organisation
mainly, up to a
district or city
level.
They are not
having any
geographical
limitation and
can operate at
local, national or
international
level as per the
the wish and
desires of
members.
Characteristics The main features
of large
companies
includes need of
huge amount of
finance and
resources and also
have a large
workforce
(Ratten, Costa
and Bogers,
2019).
Only a limited
amount of finance
and resources are
required to set up
a small or local
business.
Financial
requirements of
social enterprises
is meet through
charity and
donation thus,
does not create
any liability for
members.
Objective There main
objective is to
maximize its
profit and market
share.
Main motto of
small or local
business is earn
adequate amount
of profit for better
Main objective of
social
entrepreneurship
is to provide
welfare or social
P2) Similarities and difference between entrepreneurial ventures
Similarities between various type of entrepreneurial ventures (Large
company entrepreneurship, Small business entrepreneurship, Local business and
Social entrepreneurship) are as follows:
• All these ventures aims at timely achievement of their goals and targets
for which many factors are made by them (Pelz, 2019).
• All these organisation works for providing maximum satisfaction and
best services to its customers to make its business successful.
Difference between entrepreneurial ventures
Basis Large company
entrepreneurshi
p
Small and local
business
entrepreneurship
,
Social
entrepreneurshi
p
Importance in
economy
Large company
provide better
international or
global relation
which enhance
growth rate of an
economy.
Small and local
business have a
very crucial role
in development of
economy through
providing job
opportunity to
weaker section of
society.
Social
entrepreneurship
plays an
important role
maintaining
equality in
society or
economy.
Impact Large
organisations is
having a
significant
impact on growth
of nation as plays
an important role
in enhancing
foreign reserve of
an nation through
providing better
international
trade.
These
organisation
creates a positive
impact on
economy as
provide better
products and
services to local
people and also
generates new
opportunity of
employment at
local level.
It creates a
positive compact
on lives of
vulnerable and
poor people
through fulfilling
their basic needs
(Randolph, Li
and Daspit,
2019).
P1) Different types of entrepreneurial ventures
Entrepreneurship can be defined as a process of setting up of a business or
businesses, while considering and bearing all financial and other possible risk
with the purpose of attaining highest level of profit. In every business
environment different types of entrepreneurship or entrepreneurial venture are
their some of which are described below:
Large company entrepreneurship- These are large sized organisation which
require a large a amount of finance and other resources for their set up. Large
company entrepreneurship mainly operates at high scale their main motto is to
earn maximum amount of profit. For having proper growth and to maintain a
finite life cycle they are dependent on innovation and creativity so that new
product and better services can be provided to remain successful in market
through attracting more customers (Dominik and Banerji, 2019). Unilever and
Tesco are a good example of Large company entrepreneurship of UK which are
having a very good customer base and are also operating at international level.
Small business entrepreneurship- These organisation are relatively small in size
and thus, require only a limited amount of finance and other resources. An
organisation which is having less than 250 employees and operated and managed
by a single private individual or a group of small number individual is known as
small business entrepreneurship. These type of entrepreneurial ventures provide
a significant opportunity to financial weaker section of society to start or
establish a new business venture. Brightstar Financial is a example of small
business organisation of UK which is providing financial and insurance services
to its customers.
Local business- These are the companies or organisation which provides goods
and services to local population. These are mainly small sized organisation like a
local retailer shop, dairy shop, local saloon, etc. (Ferreira, Fernandes and Kraus,
2019). The main purpose of local business is to earn livelihood trough serving
local people thus, its start-up cost is very low and provide a chance of self
employment to local individuals. Hestory Men's Grooming is a local barber
which can be taken as a example of local business of UK providing its services
in Mayfair district of London .
Entrepreneurship and small business

P4) Importance of small business and business start up in growth of economy
Importance of small business and business start up in growth of economy
can be understood from following pints:
At national level- One of the main problem faced by all the economise or
nation is related with high rate of unemployment as larger organisation are not
capable of providing employment to all individuals especially at local level.
Thus, small business and new businesses start up solving this problem of
unemployment though providing better chance and opportunity of new
employment. Only a limited amount of resources and finance required to start a
new small business which can be easily affordable by any individual. The risk of
failure is of a small business is also low as compared to a large organisation as
different types of tax benefits and rebate are provided to small business (Satar
and John, 2019). Thus at national level, small business is important for
generation of better employment opportunity to solve the problem of
unemployment. It also improves the productivity and GDP of a nation.
At local level- Small and local business playing an important role in
preserving local art and culture through providing a better opportunity to local
artists to start their own business. Small business are also providing better quality
product to local people at relative low price. Thus, it cab said at local level small
business are necessary to improve the standard of living of local people through
providing better product and more revenue by creating opportunity of self
employment.
P3) Statistical analysis of impact of small medium enterprise on economy of UK
Small and medium sized industry plays an important role in development
and growth of an economy. They increase the number of job opportunities in an
economy and also enhance the productivity or growth level (Runyan and Covin,
2019). Small business facilitates better growth rate and GDP of a nation which
increases its financial strength and helps in building a strong economy. Use of
following data and statistical graph is made to evaluate the importance and impact
of small medium enterprise on economy of UK.
(Source 1 : Percentage of employment, turnover and businesses in
different sector of UK,2016)
From the above graph it is clear that small companies plays a significant
role in growth of UK economy. In UK, small business account for 99.3% of all
private sector at the start of 2016, and 99.9% were SMEs. It can be analysed or
evaluate from above bar graph that small businesses are playing a crucial role in
growth and development of economy of UK. It is clear from above graph that
99.3% part of all private sector organisation is formed by small businesses where
as large business accounts for only 0.1%. Small businesses are also having an
important role in creating more employment opportunity as SME accounts for
15.7 million jobs which is 60% of all jobs in private sector. Not only this, the
annuls turnover of all the SME of UK is £1.8 trillion which is almost half of total
turnover of UK (UK SME Data, Stats & Charts. 2017). Thus, it can be said that
SME is having a very important and vital role in growth of economy of UK (UK
SME Data, Stats & Charts, 2017).