SMEs Contribution to the UK Economy: An In-Depth Analysis

This report provides an analysis of the impact of small and medium-sized enterprises (SMEs) on the UK economy, comparing their influence with that of micro and large businesses. It highlights the significant role SMEs play in job creation, innovation, and overall economic development. The report uses data and statistics to illustrate the turnover and employment contributions of different business sizes, emphasizing the importance of micro and small enterprises in driving economic growth through innovative ideas and advanced technology. It also discusses the impact of SMEs at various levels, including regional, national, and international, noting their ability to compete with larger organizations, contribute to government tax revenue, and generate foreign income through exports. The report concludes that SMEs are vital to the UK's economic prosperity, focusing on their creative and innovative approaches to business and their role in providing employment opportunities.

V
The impact of SMEs on the Economy
Introduction
The fact-sheet will outline the impact of small, medium and large enterprises on national economy. The
interpretation has been done with relevant facts and data that exhibits the impact on economy. It
demonstrates the comparison between the influences that micro, small, medium and large businesses
have on the nation's economy.
Interpretation and analysis of the relevant information to know the impact of
SMEs on economy.
In corporate sector, it has been sensed that micro, small, medium and large enterprises possesses a
significant role within the development of UK' economy. These enterprises help in creating employment
opportunities for the people living in a country. They help in bringing innovative and fiscal
dependencies in the company. The following is the discussion on different types of enterprises:
Small business: These enterprises are relatively privately owned businesses in which number
of employees are few and generate low revenues for the business. This is the concept of start-ups and
self-employment. In this category, entrepreneurs differ as per the size, number of employees, nation and
so on. The number of employees are generally less than 50.
Micro business: These enterprises have low annual revenues and sales and also not more than
five employees are involved in the business. Most commonly used examples are computer services,
catering and so forth. These businesses rely on different sectors of the nation.
Medium businesses: These are businesses in which amount of employees are approx. 250 who
work together for the purpose of rising yearly income, sales and revenues. These fiscal assets of the
company are basically investors and lenders and for this, they have right to make business choices.
Large business: These enterprises runs their business at international level for the purpose of
boosting business efficiency and productivity and supports in attaining a better place in the making of
products and services as it assists in attaining sustainable profits suitably.
From the above figures, it is analysed that micro businesses are offering almost 96% of their con
to the national economy in comparison with medium and large enterprises. It is also sensed th
enterprises are evolving 15% of the job opportunities in the country while, large businesses ar
40% and medium enterprises are contributing 15% to the country. Lastly, large enterprises have
turnover rate i.e. 48% against small or medium enterprises.
The micro and small enterprises carries a vital place in the development of economy by utilising
and innovative ideas, advanced technology and much more. These elements influence the op
activities of the business and supports in attaining business sustainability, together with profitabili
dynamic environment of business.
The importance of micro and small enterprises is that it helps in increasing employment opportun
highly contribute in the economic development. It affects the national economy which brings pr
relevant data with facts and figures. As per this concept, it is supportive in exhibiting the enterpris
purpose to grow private sector and also rises the number of employment for the country.
Additionally, these enterprises does not allow much likelihood in the employment of qualified wo
rather they employ less qualified and skilled employees in their business and emphasise on p
training to them to be fit in the position of job. Due to this fact, employee engagement rises in the
and less skilled employees contribute their efforts in the attainment of productivity and economi
of the business environment.
.
Figure 1 Business statistics

Appraise impacts of different businesses on different levels (international,
national, regional, local).
In UK, SMEs provides diverse influence on the national economy in different levels. In regional
level, these enterprises can complete with other organisations by offering similar kind of goods
and services that can fit into customers’ demand. They hire individuals in their business with
low salaries because of the restriction in financial resources (Jabeen and et.al., 2019). In national
level, small and medium enterprises can spread their business into diverse part of the country
and increase revenue which helps in giving higher tax return to the government. In international
level, small and medium enterprises export their goods and services in many countries. It helps
in receiving foreign money for the business.
Conclusion
The conclusion is that small and medium enterprises plays a huge role in the overall
development of the national economy in comparison with the large enterprises in UK. There are
number of small and medium enterprises found in UK which favours economy than a large
organization. Large enterprises mainly focus on their business expansion and earn foreign
money in the way of contributing to the economy.
References
Adian, I. and et.al., 2020. Small and Medium Enterprises in the Pandemic: Impact, Responses
and the Role of Development Finance. The World Bank.
Nguyen, H.T. and Le, V., 2019. Network ties and export propensity of Vietnamese small and
medium enterprises. Asia Pacific Business Review, 25(1), pp.100-122.
Chouki, M. and et.al., 2022. Barriers to information technology adoption within small and
medium enterprises: A systematic literature review. Emerging Issues And Trends In Innovation
And Technology Management, pp.369-412.
Khanzode, A.G. and et.al., 2021. Modeling the Industry 4.0 adoption for sustainable production
in Micro, Small & Medium Enterprises. Journal of Cleaner Production, 279, p.123489.
Jabeen, F. and et.al., 2019. Determinants of innovation decisions among Emirati female-owned
small and medium enterprises. International Journal of Gender and Entrepreneurship.
As per the mentioned report, it has been said that micro, small and medium sized enterprises are
effective in the contribution of economy. For example, micro business lends more than £800 billion
turnover in the 2018. With an addition to this, small enterprises contributed £600 billion in the
category. Hence, it could express the success of micro enterprises and its extent of turnover and
employment, as the others are efficacious in the regards of increasing the scope and fast rise the levels.
Figure 2 Business Statistics
Using relevant data and statistics, compare the differences between micro-,
small- medium and large business and their impact on the economy.
This has been identified that in UK, there are number of small and medium enterprises in comparison
with large companies. Small and medium enterprises captured a big amount of market share in every
sector and industry while contributing to the development of economy. Large business enterprises
make high profit solely by making and delivery high quality products and services to their customers.
This can be done because of their established brand position. These large enterprises spread their
business all over the world which benefits to earn foreign money. These kind of enterprises cover
several operational activities and employ high number of employees which is fluctuate from other
businesses. On the other side, small and medium enterprises highly focusing on providing creative and
innovative goods in services to gain customers’ attention and increase their growth of business. They
recruit good amount of people in their business while exporting high volume products and services in