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Entrepreneurialism is booming in the UK

Written by Adam Pescod on Wednesday, 23 October 2013. Posted in Growth, Finance

New government figures reveal that people operating as sole traders or in partnership now account for three-quarters of UK’s private businesses

Entrepreneurialism is booming in the UK

Much has been said about how the UK’s small- to medium-sized enterprises (SMEs) hold the key to our economic future. Indeed, the fostering of an entrepreneurial culture among the British population has been firmly on the government’s agenda for a while now – and is obviously something we champion here at Elite Business. Therefore, it will come as no surprise to learn that figures released today by the Department for Business Innovation and Skills (BIS) offer some fairly positive sounds about the way things are going on this front. 

The headline figure from its Business Population Estimates (BPE) for the UK and Regions 2013 is that there are now a record 4.9 million private sector businesses in the UK, an increase of 102,000 since the start of 2012 and 447,000 – almost 10% – since 2010. And for those wondering why our SMEs are so important, it’s probably worth taking note of the fact they currently account for 99% of these 4.9 million businesses, employing an estimated 14.4 million people, coming in at 59.3% of private sector employment. In monetary terms, their estimated combined turnover of £1.6bn accounts for 48.1% of private sector turnover. Taking it further still, we find that small businesses alone (those with 0 to 49 employees) account for 47% of private sector employment and 33.1% of private sector turnover. 

However, the statistic that really caught our eye relates to the proportion of firms that currently have no employees – defined as either sole proprietorships and partnerships comprising only the self-employed owner-manager(s) or companies comprising only one employee director. The number of such firms in the UK now totals 3,684,740, representing a rather sizeable 75.3% of all private businesses. Putting things in further perspective, this number has grown by a staggering 1.3 million or 56% since the start of 2000. 

Of course, there is one fairly prominent explanation for this, which the government puts forward in its report. The economic downturn and resulting tough labour conditions may well have led people who have been made redundant to go their own way, as opposed to dipping back into the job market. However, as a self-professed champion of start-ups, we would like to think that with the right levels of support in place, these plucky souls will have a fair crack at seeing their bravery and ambition rewarded to the extent that they can become our next generation of business leaders.

Business secretary Vince Cable commented: “Today’s figures are a timely reminder of the number of people willing to try their hand at business. They also show an encouraging regional story with the figures for the North West and Yorkshire and the Humber particularly positive.” 

For those of you intrigued by Cable’s specific praise of these two regions, it is certainly hard not to be impressed by their resilience in the face of adversity. The North West can proudly boast having the fourth highest number of businesses (481,000) amongst the UK’s country and regions, and was equal sixth with the West Midlands in terms of its business density rate with 835 businesses per 10,000 adults. Meanwhile, Yorkshire and the Humber has the second highest share of private sector businesses in the construction sector at 20.2%, with only the South West ranking higher in this regard, albeit by a mere 0.1%. 

It is probably fitting to conclude with a smack of realism from enterprise minister Matt Hancock, who said: “There is much more to do, not least to make it easier to employ people and create jobs, like with the new £2000 Employment Allowance that from April will cut tax on jobs in every company, large and small."

It’s a start at least – and with a little bit more help along the way, we’re confident that our smallest of businesses can confidently lead Old Blighty on a new and exciting path to entrepreneurial greatness.  

About the Author

Adam Pescod

Adam Pescod

EB's former editor, Pescod was tasked with ensuring these hallowed pages are rich with excellent, engaging and error-free stories, all written with the entrepreneur in mind. Pescod previously plied his trade penning pieces about pubs and pints. He is also a sucker for alliteration. 

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