'Enterprise army' to drive UK economic growth

IN: Business news

It will take as many as 300,000 new small and medium-sized enterprises (SMEs) to restore the UK economy to its pre-recession high, a new report has found.

The average SME entrepreneur already contributes nearly £130,000 to the economy each year, according to the 'Valuable Assets' research provided by commercial insurer RSA.

SMEs are already responsible for providing more than half (52 per cent) of private sector gross value added to the economy, the study compiled by the Centre for Economics and Business Research found.

In the last two years, SMEs in the information and communication technology sector have enjoyed growth of 20 per cent, along with one per cent growth in manufacturing.

As the report suggests, manufacturing should benefit from chancellor George Osborne's decision to raise the cap on the annual investment allowance to £250,000, alongside pledged increases in export finance facilities.

SME director at RSA Tara Kneafsey said: "Our study shows that an 'enterprise army' will be the driving force for growth, providing a much-needed shot in the arm for the UK economy."

However, she noted that challenges, as well as opportunities, come with growth.

Figures in the report show that the number of large businesses in the last decade has declined 11 per cent, but there has been a 35 per cent surge in SMEs over the same period "showing the growing strength of the burgeoning SME population".

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