Entrepreneurs across ten major British cities will generate £241bn a year by 2025, according to new findings that indicate the growing status of the small business economy.
The study, compiled jointly by challenger lender Hamphire Bank Trust and the Centre for Economics and Business Research (CEBR) think tank, suggested that the economic value of small firms would increase by almost a fifth over the nine-year period.
The findings also hinted at a slight rebalance of the economy away from London, with entrepreneurs in Greater Manchester and Leeds adding over a quarter to their current economic value by 2025 – the fastest growth out of the ten most productive cities.
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Bristol sat third in table, as small business owners confidently predicted they would add £1bn onto the £4bn generated in 2016.
At £181bn, small business owners in the capital would still be worth ten times that of those in Greater Manchester in 2025. However, the study also uncovered the impact of Brexit on growth expectations, seen most strongly in London.
Overall, a third of survey respondents believed their profit potential had been pegged back since the EU referendum in June 2016. In London, closer to half believed Brexit would have a detrimental impact on their business.
2016 to 2025 forecast of Britain’s small business economy
|City||2016 contribution||2025 contribution|| Per cent change
2016 – 2025
|Greater Manchester||£13bn (£13,373,718,500)||£17bn (£16,835,047,500)||26 per cent|
|Leeds||£5bn (£5,435,544,700)||£7bn (£6,844,605,500)||26 per cent|
|Bristol||£4bn (£3,839,627,800)||£5bn (£4,741,697,300)||23 per cent|
|London||£152bn (£152,164,339,800)||£181bn (£180,972,040,900)||19 per cent|
|Tyneside||£5bn (£5,187,149,100)||£6bn (£6,170,773,300)||19 per cent|
|Birmingham||£6bn (£6,426,096,700)||£8bn (£7,612,653,900)||18 per cent|
|Edinburgh||£4bn (£4,450,399,200)||£5bn (£5,253,973,100)||18 per cent|
|Glasgow||£5bn (£5,157,719,900)||£6bn (£6,103,088,100)||18 per cent|
|Cardiff||£3bn (£2,602,141,500)||£3bn (£3,007,878,100)||16 per cent|
|Sheffield||£3bn (£3,457,445,600)||£4bn (£3,933,334,100)||14 per cent|
|Total||£202bn (£202,094,182,800)||£241bn (£241,475,091,800)||19 per cent|
The same study was undertaken in 2016, when the small business economy was forecast to be worth £217bn by 2020. At £219bn, the latest analysis proved owners had upped their growth ambitions.
Commenting on the findings, Mark Sismey-Durrant, chief executive at Hampshire Trust Bank, said the strong growth forecasts served as a “critical reminder” of how important the small business economy was to the UK’s success.
“We also should note from our study the lowering in confidence amongst some SMEs,” he warned.
“If the UK is to be prosperous as we move away from the European Union, we need the government to keep the spotlight on smaller companies by creating conditions which will support their continued growth, as our research demonstrates how much we need these companies to develop and achieve their ambitions.”
Meanwhile, Nina Skero, managing economist at CEBR, welcomed the growing value of small companies to regions across the country.
“This study demonstrates how SMEs are making a vital contribution to city economies across the UK,” she said.
“The importance of SMEs is on the rise, therefore we hope this research will boost confidence among business leaders in the UK so they may continue to support job creation and capitalise on opportunities for growth.”
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