big businesses drive the UK economy – but small can be beautiful too.
Much is made of the contribution of small businesses to the UK economy, and they are indeed important. However, there is also some overclaiming in this debate. For example, according to the Forum for Private Business “92 per cent of businesses in the UK are small”*. The problem is not so much that this impressive-sounding figure is wrong, more that it lacks context.
Looking from a different perspective, whilst the UK’s 6.7 thousand large private sector employers with 250 or more employees make up only 0.2 per cent of the total stock of businesses, they manage to employ 50.4 per cent of all UK employees and account for 55.8 per cent of turnover**.
The small business sector is very important, and should be cherished, but perhaps its also just worth remembering that 3/4 of small busineses are sole traders with no employees, and perhaps also that that large employers tend to pay higher salaries to their employees because success allows them to do so as part of their labour market strategy.
The recent rise of sole trader self-employment means that the number of private sector businesses in the UK has grown by 12.8 per cent since 2007, and the stock now stands at the record level of 4,794,105.
What is needed now is a sound economic recovery so that businesses of all sizes can enjoy greater prosperity – and can pass it on to their employees.