Enterprise & Small Business Management: Impact of SMEs on UK Economy

This report examines the impact of small and micro businesses on the UK economy, evaluating the contribution of SMEs to growth and financial stability. It explores factors influencing the growth of SME enterprises, highlighting their role in national economic development and the importance of startups in the social economy. The report compares the impact of SMEs across different industries within the UK and contrasts their contributions with those in other EU countries like Italy. Ultimately, the report concludes that SMEs significantly benefit the UK economy by providing employment, driving innovation, and fulfilling consumer needs, supported by various government initiatives.

Enterprise and Small
Business Management

TABLE OF CONTENT
Introduction
Impact of small and micro business on economy of UK
Evaluation of contribution of SME in growth and financial
contribution to UK economy
 Factors that influence growth of SME enterprise in UK
Role of SME and their contribution in nation economy
Importance of small and start up business in growth of
social economy
Conclusion
 References

INTRODUCTION
Entrepreneurship included various activities and steps that are
taken by individual to start business in order to earn specific
amount of profit by taking specific amount of financial risk.
Management plays important role in both small and large
enterprise by effectively organising, making arrangement of
sufficient resources that are required for achievement of
company objectives.

Impact of small and micro business on economy of UK
Small enterprises are business that hires individual or employees less that large organisation and have
limited number of resource, capital run independently by sole proprietors or partners. It employees
people between 10-50 while micro business have employees ranging between 0-10 working together for
meeting requirements of few individual in the society. On the other hand medium enterprise have
employees 50-250 and operates with one of the main objectives to grow and expand its business
operation by fulfilling needs of various customers.

Factors that influence growth of SME enterprise in UK
Political factors: Government of UK have made various policies and procedure to
encourage or initiate SME to start or operate their business so that economy can grow and
people can live better lifestyles.
SME are backbone of UK and global economy so they have made various rules, regulation
in order to protect them so that local communities can get maximum benefits.

Comparison of impact of UK on different industries
 It can be illustrated that there are highest number of
business in construction business of UK as compared to
retail industry.
 Retail industry have total business around 9.33% that is
employing 18.4% of individual in private sectors thus
contribution in 33.7% of turnover in UK.

Role of SME and their contribution in nation economy
 SME plays important roles in growth and
development of economy through providing
employment to large number of individual.
It also helps in making life of people better
by offering them necessary products and
services at reasonable rates.
Therefore various contribution of SME to
national economy can be illustrated as:

Comparison of impact of SME on two EU
countries
 94.8% of business in Italy is driven by SME and it have
employees more than half workforces that is 47.5% in
private sectors and contributing in overall turnover of €675
million.
 There are 200,000 small firm that hires 3.5 employees and
adding value in GDP of country approximately €141,535.
At the same time medium size enterprise that hired
employees ranging between 20-259 have produce turnover
of €538,593 and employees 21,962.

Importance of small and start up business in growth of
social economy
 Small and start up business helps in
generating lot of job, enhancing overall
productivity and turnover of economy
thus adding value to GDP of UK
economy.
 Start-up and small enterprise also helps in
bringing new innovation and creative
ideas so that customer’s requirements can
be satisfied in best possible manner.

CONCLUSION
It can be concluded from above report that SME enterprise have
various impact on UK economy that provide maximum benefits to
individual.
SME helps in fulfilling need and requirements of various
individual in best possible manner by offering them products at
minimum prices.
It can also be stated that government have taken various steps for
growth and development of economy.

References
Kiew Heong Yap, A. and Yap, S. T., 2018. COSO enterprise risk
management: small-medium enterprises evidence. Asia-Pacific
Management Accounting Journal (APMAJ), 13(2). pp.83-111.
Hänninen, K. and et.al., 2016. EXPLORING THE MICRO-
ENTERPRISE RESEARCH GAP. In ICSB World Conference
Proceedings (pp. 1-5). International Council for Small Business (ICSB).
Alomari, I.A. and et.al., 2018. Effect of enterprise resource planning
systems and forms of management control on firm’s competitive
advantage. Asian Journal of Accounting and Governance, 9. pp.87-98.
Online
UK SME Data, stats and charts, 2020, [Online]. Available Through:<
https://www.merchantsavvy.co.uk/uk-sme-data-stats-charts/>.