Entrepreneurship and SME Management: UK Economic Impact Analysis

This report examines the role of Small to Medium Enterprises (SMEs) in the UK economy, highlighting their significant contribution to growth, employment, and financial stability. It discusses the concept of SMEs, their increasing presence in the UK, and their impact on various sectors, including hospitality, tourism, retail and construction. The report also addresses the challenges faced by SMEs, such as the financial crises and Brexit, and the government's supportive policies. Furthermore, it compares the impact of SMEs across different UK regions and EU countries, emphasizing their role in cultural development, technological innovation, and providing affordable products and services. The report concludes that SMEs are vital for the UK's economic development and globalization, offering opportunities for employment and financial stability.

Entrepreneurship and Small
Business Management

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 2............................................................................................................................................3
A: SME concept and its contribution in the growth and financially in UK Economy................3
B: Role of SME's and their contribution in country economy.....................................................6
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Entrepreneurship is actually a process which practices the business activities like
creating, organising, managing a business. It is the mindset of the person who created the
business idea, called entrepreneur. Initially it is started on small scale, which further appreciated
by consumer. This repost has the discussion on the small medium-sized enterprises (SME's) and
private sectors, their contribution in the growth. Further, discusses the SME's impact on the
country's economy.
TASK 2
A: SME concept and its contribution in the growth and financially in UK Economy.
SME stands for small to medium enterprises, in which the businesses are done at small
scale in terms of revenues, employees, assets. People take initiatives to start the business with
innovative ideas and by analysing the demands of the consumers. SME has lots of scope in
market as they provide the required products and services to the consumers at low prices and
good quality. Approximately 99.9% SMEs are established in UK (Hillary, 2017). They provide
large number of employment tot the people about 59.1%. it generates 49% revenue which
contribute to the country's economy.
According to these data analysis, UK has large number of SME presence which help
them country in growth and financially which further contribute to the economy of UK
(Wynarczyk and et.al., 2016).
Illustration 1: Employment%, business%, turnover% of SME's in UK

SME's Contribution In Growth and Financially
SMEs are increasing day by day in UK which affect their growth in many senses like
small businesses are established in local markets so thy know the demand of the consumers as
the daily interact with them. In comparison to large enterprises SME's are more successful, they
practices innovative ideas in the businesses, they market their product easily but in limited area.
As it is expanding vigorously many industries are included in it, as they have profits in it. For
example hospitality and tourism sector is increasing so the SME have established hotels,
restaurants at low budget which provide tourists quality products and services in low prices. As
the people interact with each other they exchange their thoughts which enhances their knowledge
(Zhou, 2016). SMEs are working continuously, it brings changes in the culture, languages,
fashion, technology innovation etc. all these changes help the country to know different culture
and tradition, As they have done analysis of the market they know about the requirement for
people so according to that thy can implement change in their strategies easily with no huge
investment or issues. It has low marketing cost for their products as they don't invest in
advertising or promotional activities.
SMEs main objective is to earn the profit which help them financially. So basically SMEs
are giving growth to the country in terms of socially, legally, financially change (Sundiman and
et.al., 2019.). It brings scope for many people to earn money for their livelihood.

People in UK suffered from the financial crises during recession period they had lost their
jobs, it increases unemployment in the country. It slows down the economic growth of the
country. During the Brexit, country faced lots of issues related to the change in policies,
legislation, financial crises, bad economy, unstable political condition, so this make the
instability in the market (Trianni, Cagno and Farné, 2016). But after the Brexit the government
of UK made policies in favour of the SMEs, as they have lower their taxation, decreases in
import and export duties, it creates a revolution in the country so that people take the advantage
of such changes, flexible environment for them. More people are preferred to join SME. The
factors such as population of labour, capital, technology advancement, resources, laws affect the
economic growth. Basically it relates to economic and political factors like policies, procedures,
resources, investment capital etc. influence the development of SMEs.
Illustration 2: Growth in UK businesses in the private sector by number of employees

So government organise programmes for financial aid to SME because it is major factor
to access the fund in SME development. Provides necessary informations, educational programs
for spreading awareness about the small businesses, it includes business trainings, also organise
seminars for the SMEs which is hosted by young and working entrepreneurs (Rizos and et.al.,
2016). Train them to improve management skills, communications kills, to support them.
Government of UK encourage these sectors, if they help the people it returns in taxation form
which help the country. As they analysed the contribution of SME and private companies in
economic growth.
B: Role of SME's and their contribution in country economy.
SMEs and private sectors are expanding faster in market.
Roles Of SME's
 It plays major role in contribution to economy for the development of the country.
 It helps in cultural development
 Technology innovation (Cowling and et.al., 2015)
 Provide the essential for the mass consumption with their products and services.
 Affordable for all customer segment by minimising the prices.
 Providing employment. Increases the suppliers and vendors in local market.
Illustration 3: Share of SME's in UK market

Compare The Impact Of SME's In Two UK Region
In UK has great impact of SME's in their own way, like they contribute into country's
economy, bring the rationale changes in country.
London Ireland
 5000000 SME's in 5005000 companies.
 There are 1563 small businesses per
10000 population.
 It gives jobs 239000 people.
 It develops the tradition.
 It brings vast social changes
(Georgiadis and Pitelis, 2016).
 It makes the affordable products for all
in comparison of the branded items.
 It is 133000 businesses holding in
market.
 It gives 36000 jobs to the population.
 It changes the culture.
 It develops the mentality of the people
for equality.

Large number of SME's are circulating in the UK which provides growth to the nation in
terms of stable economy, financially, socially as it provides employment to large amount of
people in the country which solves the national issue for the government. On the other hand it
makes the better life for women as they can do part-time jobs in SME or private sectors, the
made strong financially (Lai, Saridakis and Blackburn, 2015). Youth are also engaging it
different innovative ideas. It has good impact on the country. But still it needs to improve in
several ways.
Compare The Impact Of SME's For UK Utilising Two Different Industries
SME in different sectors has large market share. It is more than large organisations. In
construction, agriculture, retail industries it is growing tremendously. So its contribution is very
high.
Retail Sector Construction sector
 It opens new doors for them. It has
556000 small businesses which
provides 19% of employment and 34%
for turnover which is very high and it
increases with public demands. It decreases the prices of products,
groceries and gives competition to big
organisations like Tesco and down their
market (Storey, 2016).
 There are 990000 SME's which gives
8% employment and generates 8%
turnover.
 So small businesses takes lead and big
organisations are out of market because
they charge very high in construction,
like malls, complexes, hotels etc. SME
has reliable construction rate, so they
grow in this industry.
Compare The Impact Of SME's For Two EU Countries.
In EU countries, SME's are spreading faster in the market.
Germany Austria
 It has 2532000 small medium-sized
business.
 It provides 19% employment to the
 Country has 567000 SMEs.
 It gives 14% employment in the
country.

people.
 It enhances the import and export of the
goods in the country.
 People are more attracted for quality
products, as they go for only branded
items, SME's changes their psychology
in terms to use local products and
services at affordable prices (Cowling
and et.al., 2015).
SME's are giving more opportunities to the people in EU countries for growth. As it
becomes stable in the country and help them to increase their share in market (Zhou, 2016). It
involves technology innovations, it opens the door for bringing more employment, start-ups. So
government provides facilities to SME for expansion globally.
CONCLUSION
Accoridng to the report it is cleared that small-medium sized enterprises are very helpful
in every aspect for the countries. In UK the SME's are developing very faster, people of the
country are accepting the new SME trend because it provides employment to large population of
the country and helps them to overcome from the financial crises. It supports the economy of the
country which is rising due to increase in SME's in their country. It brings vast changes in
culture and political trend. Comparison of EU countries, in which impact of SME's are discussed.
So that is cleared that SME's share in global market is increasing. Every country is adopting
small businesses which affect them positively and help them to enhance globalisation.

REFERENCES
Books and Journal
Hillary, R., 2017. Small and medium-sized enterprises and the environment: business
imperatives. Routledge.
Wynarczyk, P., and et.al., 2016. Managerial labour markets in small and medium-sized
enterprises. Routledge.
Zhou, B., 2016. Lean principles, practices, and impacts: a study on small and medium-sized
enterprises (SMEs). Annals of Operations Research. 241(1-2). pp.457-474.
Sundiman, D., and et.al., 2019. Knowledge management key factors: an empirical research on
small and medium-sized enterprises in Indonesia. International Journal of Business and
Systems Research. 13(2). pp.139-161.
Trianni, A., Cagno, E. and Farné, S., 2016. Barriers, drivers and decision-making process for
industrial energy efficiency: A broad study among manufacturing small and medium-
sized enterprises. Applied Energy. 162, pp.1537-1551.
Rizos, V., and et.al., 2016. Implementation of circular economy business models by small and
medium-sized enterprises (SMEs): Barriers and enablers. Sustainability. 8(11). p.1212.
Cowling, M., and et.al., 2015. What really happens to small and medium-sized enterprises in a
global economic recession? UK evidence on sales and job dynamics. International Small
Business Journal. 33(5). pp.488-513.
Georgiadis, A. and Pitelis, C. N., 2016. The impact of employees' and managers' training on the
performance of small‐and medium‐sized enterprises: Evidence from a randomized
natural experiment in the UK service sector. British Journal of Industrial
Relations. 54(2). pp.409-421.
Lai, Y., Saridakis, G. and Blackburn, R., 2015. Job Stress in the United Kingdom: Are Small and
Medium‐Sized Enterprises and Large Enterprises Different?. Stress and Health. 31(3).
pp.222-235.
Storey, D. J., 2016. Understanding the small business sector. Routledge.