As per the research conducted by Winning Pitch Plc., presently UK has severe shortage of high growth SMEs. This condition is very alarming and may continue or may even invigorate the ailing economy.
High growth SMEs are identified as those businesses that have over ten employees, and can generate a turnover of £1 million within their first three years, or that already have turn over of £0.5 million and are predicted to grow by 20 per cent year-on-year for the next three years. These SMEs contribute dramatically to regional economic wealth. They are also thought to create 70 percent of jobs in any given geographical location.
According to the analysis made by the researchers, the research identified 88,220 potential High Growth SMEs (22 per cent of SMEs), which, through funding and business support, could become high growth businesses, increasing turnover exponentially and accelerating the employment rate.
This report also identified the areas having highest number of High Growh SMEs. It found that London had the highest percentage of High Growth SMEs (seven per cent) and potential gazelles (15.2 per cent) when compared to other UK regions, while Yorkshire and Humber, Scotland and the East Midlands, each had the second highest percentage of gazelles (5.5 per cent). The South East was third in the UK for number of gazelles, but second in terms of potential high growth companies (13.7 per cent). Wales had the lowest percentage of both gazelles (4.3 per cent) and potential gazelles (three per cent).
Another, Index of The Plus-quoted company’s, HiQ, a metric designed to map the percentage of high growth businesses within each of the UK’s local authority areas, has revealed that high growth SMEs account for just 5.4 per cent (22,262) of the country’s 409,773 SMEs.
Before the research was conducted, the Office of National Statistics (ONS) reported that Britain’s economic output shrank a further 0.4 per cent between July and September, completing 18 months of uninterrupted negative growth ,totalling almost six per cent of the economy.