UK Business Growth
A recent House of Commons report, compiling business statistics since the turn of the millennium, has shed some interesting light on how the UK business landscape has changed over the last 14 years. The number of private sector businesses has grown from around 3.4 million to just over 5.2 million, with the vast majority being SMEs. This rise suggests we are becoming more entrepreneurial and confident about starting out on our own.
UK Business Growth – Small Businesses Are Thriving in the UK
In 2014, there were over 5.2 million small businesses in the UK, with over 5 million of them classified as micro businesses—those employing 9 staff or fewer. These micro businesses accounted for an impressive £1,647 billion in turnover and employed 60% of the UK workforce. This underscores the significant contribution that SMEs make to the economy.
Interestingly, the proportion of small businesses employing staff has dropped from a third to about a quarter since 2000, suggesting that more businesses are opting to stay lean or use freelancers. Nevertheless, large businesses (those employing more than 250 people) still account for the majority of employment, contributing 53% of turnover.
Most regions in the UK (with the exception of Scotland, which saw a slight decline) have experienced an increase in the number of businesses being created. London and the South of the country, in particular, have seen the largest growth.
- Over 4.5 million of the UK’s SMEs are based in England, while Wales comes in second with just 213,000.
- The majority of these businesses operate in the service industry (73%), followed by the construction sector (18%).
- Within the service industry, retail and scientific/professional services were the largest sub-sectors, with 10% and 15% respectively.
Business Creation and Cessation
Another interesting statistic is the rate of business creation and cessation, which has remained fairly constant since 2000. In 2014, 346,000 new businesses started trading, while 238,000 ceased operations. This recent trend shows that the birth rate of businesses has outpaced the death rate. For example, in London alone, 84,000 businesses started trading in 2014, while 50,000 closed their doors.
Female Bosses with Growing Influence
While the number of women involved in running SMEs has increased over the last decade, the statistics reveal there’s still a long way to go before parity with their male counterparts is achieved.
In 2012, around 18% of SMEs were female-led, with this figure rising slightly to 19% for businesses that employed staff. This translates to about 860,000 female-led SMEs. Many of these ventures were new, which could suggest that women are becoming more active in the entrepreneurial space.
Companies equally led by both men and women accounted for an additional 23% of SMEs. This means that 42% of small to medium-sized businesses in the UK have significant female involvement. However, the number of women engaged in total early-stage entrepreneurial activity (TEA) still lags behind men, with 5% of women compared to 10.2% of men involved in such activities.
On a more positive note, the number of women sitting on company boards has continued to rise. In 2014, for the first time, there were no all-male boards in the UK. This shift suggests a growing move towards gender equality in leadership roles.
For more detailed insights into female involvement at the top levels of business, the Cranfield School of Management’s Female FTSE Board Report provides a comprehensive overview, including a ranking of FTSE 100 companies by their number of female board members. However, it’s worth noting that some of these positions may be ‘honorary’.
Why Is There Still a Low Female Presence?
Despite some progress, there’s still a striking disparity between male and female entrepreneurs. Why are there so few female business leaders? What barriers still exist for women trying to break into entrepreneurship? These are questions worth exploring if we are to achieve a more balanced business landscape.
Where are all the female entrepreneurs? And what can be done to encourage more women to take the leap into running their own businesses?