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Businesses Leading Britain: Fastest growing medium-sized businesses contribute 9% of UK GDP
8 December 2014
- Revenue of the 1,000 Businesses Leading Britain hits £158bn;
- Employment at these firms up by 182,000 in three years;
- Rebalancing under way as North West, East and East Midlands lead the shift away from London;
- Nearly three quarters of companies from just three sectors: consumer business, business & professional services and manufacturing;
- Government urged to do more to maximise and replicate the impact of these overachievers.
The 1,000 fastest growing medium-sized businesses* in Britain generated £158bn in revenues last year, according to a new report by Deloitte. Businesses Leading Britain: A new lens on growth reveals that this group of high performing companies now account for 9.2% of GDP, up from 7.9% in 2011, despite forming less than 1% of the total UK business population. In 2013, they made an economic contribution of £2.46 for every person in the country, an increase from £2.02 in 2011.
Over this period, these companies increased headcount by 181,780 through a combination of job creation and acquisition activity. On average, the 1,000 businesses added 60 people each year between 2011 and 2013. By contrast, total new employment in the UK increased by 400,000.
Pat Loftus, head of private markets at Deloitte, said: “The UK economy is recovering. Growth has returned and businesses are expanding, creating jobs and increasing investment. Much of that growth has come from a small number of fast-growing businesses. These companies have collectively increased revenue by around £30bn in three years, provided a major boost to employment and are contributing to the rebalancing of the UK economy at both a regional and sector level. Such businesses are the engine room of the UK economy and future prosperity will be heavily influenced by their continued success.”
The second annual Businesses Leading Britain report finds that 649 of the 1,000 fastest growing medium-sized companies are based outside London and the South East. This is a 10% increase on the 590 companies in last year’s analysis. The report also provides evidence of emerging regional powerhouses with the North West (8), East of England (4) and East Midlands (4) featuring strongly amongst the 50 fastest growing businesses.
There are also signs of a slight rebalancing in terms of the sector focus of these companies. Almost three-quarters of the 1,000 businesses come from just three sectors: consumer business, business & professional services and manufacturing. The number of companies from these sectors that are among the very fastest growing in our report is also increasing disproportionately. There are 46 financial services companies in the analysis, a small decline from last year when there were 54.
Chris Gentle, head of insight at Deloitte UK, added: “Given its extensive exposure to the international economy, London is always likely to contribute the largest number of companies in our analysis. However, there are positive stories all over the country and the integral role these fast growing businesses play in the economic development of the regions should not be underplayed. In the East Midlands and Wales for example, these companies increased headcount by more than 50%, whilst the 21 companies based in the North East more than doubled their employment figures.”
The Rt Hon Vince Cable MP, Secretary of State for Business, Innovation and Skills, said:
“I welcome the work that Deloitte is doing to champion the important role Medium Sized Businesses play in their local economies and their strategic importance to the UK. The report demonstrates the importance of the Government’s Industrial Strategy to our efforts to rebalance as it shows that the fastest growing ‘businesses leading Britain’ are in the North West and the East Midlands in the manufacturing and technology sectors. The success story is clear.”
As this report illustrates, medium-sized businesses have been vital to the UK’s economic recovery. However, whilst significant attention is paid to the smaller end of ‘SME’ or to the titans of industry at the top of the market, medium-sized companies are sometimes overlooked. Through Businesses Leading Britain, Deloitte has made a number of recommendations to Government to help maximise the impact of these overachievers and to replicate their success across other businesses. These recommendations include:
- Government, working with the business community, should give more attention to medium-sized business. In particular, the Government should examine whether public data can be used more effectively, including Companies House, export and tax data, to understand this section of the business population.
- The business community and Government should work together to ensure that there is advice and support for leaders of medium-sized businesses, enhancing the reach and offering of existing programmes put in place by Local Enterprise Partnerships, UKTI and other agencies representing business interests.
- The Government should appoint a Minister to ‘champion’ the interests of medium-sized businesses, building on the successful work of the current Minister of State for Trade and Investment, to overcome the perception that Government support is mostly for small or very large businesses.
Notes to editors
*Businesses included in our analysis have generated between £30m and £1bn in revenue in each of 2011, 2012 and 2013. They have been profitable and employed a minimum of 10 people in each of these years. They must not be listed as a controlled subsidiary of another company in this analysis.
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The information contained in this press release is correct at the time of going to press.
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