SME Analysis: UK Economy, Retail, Construction, and Global Role

This report delves into the pivotal role of Small and Medium Enterprises (SMEs) within the UK economy, investigating their contribution to GDP, employment, and innovation. It analyzes the concept of SMEs, their financial contributions, and the impact of political and economic factors. The report examines the specific influence of SMEs on sectors like retail and construction, providing data on employment, turnover, and the number of businesses. Furthermore, it compares the performance of SMEs in the UK with those in Sweden and Denmark. The report concludes that SMEs are crucial for economic growth and development, highlighting their adaptability and importance in both local and global contexts. It uses data and statistics to support its findings and highlights the challenges and opportunities for SMEs in the current economic landscape. This report emphasizes the importance of SMEs for the UK's economic stability and growth.

Project

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 2............................................................................................................................................1
Concept of SME..........................................................................................................................1
Role of SME and contribute in global economy.........................................................................4
SME impact on UK by Retail and Construction ........................................................................6
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
A project is an activity to meet the initiation of a specific product or services and
activities covers to achieve day to day activities which can not be defined into projects. It is great
opportunity for a company and individuals to accomplish objectives of business as well as non
business (Siskind and et.al, 2013). It help us make changes as per the requirement and organize
everything in proper manner to deduct probability of failure. SME is a term of business
segmenting where other businesses somewhere among the small office home office. A business
consultant wants to widen of their client so prepare a report where includes concept of SME,
growth and financial contribution of micro, small and medium private organisation. Additionally,
analysis of different factors that affect to development of the country.
TASK 2
Concept of SME
The small and medium size enterprise is that type company where work about 250 staff
members and engage with the world's most economies. It is considering as major source of
entrepreneurial skills, innovation and employment. The globalisation process affect by these
companies and often advanced with particular difficulties and problems (Concept of SME.
2019.).
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Financial contribution of micro, small and private organisation into UK economy
On the basis of statistics perform that Britons are introducing new enterprises in every
year. On the basis of 2016 there were about 5.5 million business from private sector, up by
97000 since 2015. The main reason to define increase in in granted business start-up loans and
grants. The large majority of businesses in the UK are small and medium businesses, where most
of the project less than to 250 staff members on the basis of European union standards. From last
three years, 60% SME enterprises take fund from external sources (Tomlinson and Fai, 2013) .
It is understand that small companies play essential role for the development of the
economy. They are helping to develop job and apply new innovation ideas regarding to different
types of products. As per the UK alone, they account for 99.3% of all private sector business in
the starting of 2016 and 99.9% were small or medium size. It is getting that total employment
about in SMEs however was 15.7 million and 60% of all private sector employment in the UK.
The annual turn over in combined manner of SMEs was 2.0 trillion which is about to 52% of all
private sector turnover. SME contribute to get growth in financial level because they are
providing employment to local people and invest money so as a result increase GDP of country.
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On the basis of 5 years data it is analysed that political factors of the UK impact on the
SME and contribute into 47% in the revenue in the UK economy, small, medium sized enterprise
have important role to encouragement productiveness. They need to support to intensify of
business and improve effectiveness (Calabrò and Mussolino, 2013).
After the Brexit most of the companies affected in effective manner that time political
factor affect to SME and understand the inflation rate which is increased continuously. The
trends increase of non employees but SME support to UK economy and support to all political
activities. As a result it will affect to The SME presents that SME important part of UK economy
because accounting for 99% of all UK firms and about 60% of total private sectors belongs from
employment. Political and economical directly affect but SME handle it properly and help to
develop UK economy in effective manner.
Role of SME and contribute in global economy
All over the world SME plays significant role in global economy for the development. In
present time it become high attention for the developing countries. Most the nations in transition
but also in the countries with developed economies. On the basis of market economies, SME
define as engine of economic development. For this provide regards to private ownership,
entrepreneurial feeling along with its flexibility and adaptability as well as their expectation to
react regarding to challenges and fluctuated environment. SME contributes in the manner of
sustainable growth as well as in employment coevals in specific way.
SME impact on London and Wales & Northern Ireland
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Small and medium enterprises plays a significant role in the development of an economy and has
done for the UK as well. SME's contribute to the 47% of revenue to the UK. In Wales &
Northern Ireland, SME has contributed to 60% of all jobs, 51% of total turnover In gross value
added generated by private sector and 70% of jobs in private sector were created. In London, the
major impact on internal economy of the capital city is earmarked by the fact that alone SME
generated 2 million jobs in London. There are 5.7 million SMEs in UK (2018) making 96% of
Uks total businesses (Mateev Poutziouris and Ivanov, 2013) . In London there are 1,563 SMEs
per 10,000 residents, Wales has 774 SMEs per 10,000 residents, whereas Northern Ireland
accounts 897 SMEs per 10 thousand (2018). In the year 2017, London had the business birth rate
of 15% and death rate at 14% as compared to Wales which had lower percent as 14% birth rate
and 10% death rate. In 2017, largest number of business births took place in London at 92000
and deaths at 86000. Start up rate taken on per capita basis points shows 71% start up formation
rate in London which is much higher than the national average, Northern Ireland had had 50% of
the national average and Wales falls very short of the average which shows very contradictory
statements about the two regions.
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SME impact on UK by Retail and Construction
In the year 2018, Construction industry had 992 per thousands businesses making a national
percentage of 17% in the economy. Its share in providing employment stands at 8% and had a
turnover rate of 8%. Whereas, Retail sector had only 556 per thousands business at the rate of
10% of the economy. It provided employment at the rate of 19% which is way high than
construction industry at 34% turnover rate. A wide number of workers engaged in construction
industry are self employed which although increases the number of entities but doesn't account in
number of people employed in the sector (Sok, Cass and Sok, 2013). In early 2018, retail sector
had an economic output of 92.8 billion pounds, employment provided was 2.8 million and there
constituted around 319,000 retail businesses in the UK. It has a retail sales of 395 billion pounds
at the stores level and online sales accounted for 18% of all retail sales combined. Construction
industry had an economic output of 113 billion pounds at the rate of 6%, creating 2.4 million
jobs at the rate of 7% and 1.0 million businesses at the rate of 17%. In UK, south east has
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maximum number of jobs in construction at 368 per thousands and lowest in Northern Ireland
which has only 56 jobs per thousands.
SME impact on Sweden and Denmark – EU countries
Between years 2012-2018, Swedish SMEs had a very prominent growth and performed way
better than the large businesses. SMEs value addition is 13.0% as compared to 3.8% for large
businesses. Employment growth rate is 5.4% whereas large firms had only 1.2%. from 2015-16
the SMEs rate of employment and value addition rose by 1.6% and 4.2% respectively. It is
forecast to rise by 10.3% till late 2018 and early 2019. and employment rate is forecast to rise by
4.0%. Whereas for Denmark, Its value added increased by 6.6% and employment grew by 5.1%.
Large business firms grew very proportionately with a value addition of 23.1% and employment
whopped to 11.1%. The Denmark's SME is optimistic in future. Value added of SME is expected
to increase by 9.4% in 2018. As a result around 39,700 jobs are expected to be created by SME
till the year end.
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CONCLUSION
As per the above report it is concluded that SME plays significant role into UK economy
because it can help to increase GDP and development. It supports to innovation and increase
employability. After the Brexit political factor and economical factor influence to SME in
negative manner but after some time it will set as per the requirement of economy. It can impact
on the UK region, different countries as well as EU countries.
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REFERENCES
Siskind, C .E. and et.al, 2013. A review of genetic counseling for Charcot Marie Tooth disease
(CMT). Journal of genetic counseling. 22(4). pp.422-436.
Tomlinson, P. R. and Fai, F. M., 2013. The nature of SME co-operation and innovation: A multi-
scalar and multi-dimensional analysis. International Journal of Production Economics.
141(1). pp.316-326.
Calabrò, A. and Mussolino, D., 2013. How do boards of directors contribute to family SME
export intensity? The role of formal and informal governance mechanisms. Journal of
Management & Governance. 17(2). pp.363-403.
Mateev, M., Poutziouris, P. and Ivanov, K., 2013. On the determinants of SME capital structure
in Central and Eastern Europe: A dynamic panel analysis. Research in International
Business and Finance. 27(1). pp.28-51.
Sok, P., O’Cass, A. and Sok, K. M., 2013. Achieving superior SME performance: Overarching
role of marketing, innovation, and learning capabilities. Australasian Marketing
Journal (AMJ). 21(3). pp.161-167.
Online
Concept of SME. 2019. [Online]. Available through:
<https://link.springer.com/chapter/10.1007/978-3-540-93956-6_14>
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