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12 Sep 2016

Small companies have driven UK employment boom since 2010

The employment boom witnessed in the UK over the past five years has largely been driven by small businesses, This is Money reports.

According to the findings of a recent study conducted by research company Capital Economics and energy group Npower, small companies accounted for almost four-fifths of the rise in private sector jobs since 2010.

Small companies were responsible for 1.9 million new jobs during a time when employment in the UK rose by 2.5 million. This growth was particularly robust among the self-employed market, with an additional 900,000 new one-person businesses being established during the five-year period.

It is estimated that small- and medium- sized companies will add a further 200,000 extra jobs in the run-up to 2020, generating some £16 billion for the national economy.

In terms of location, the City of London has been the hotbed for small firms over the last five years – and is expected to provide an additional 36,000 jobs in the coming five years. Manchester was another key hotpoint in previous years, but Bristol, Leeds, Birmingham and Brighton all look set to make their mark in the near future.

The report looked at which cities were most likely to see rapid growth among small companies, measuring key factors such as local workforce skills, property costs and even broadband speeds.

Commenting on the findings, Dale Murray CBE - board adviser at the Centre for Entrepreneurs and non-executive director for the Department for Business, Energy & Industrial Strategy – noted that growth among these businesses in particular would be essential for the British economy over the coming years, creating thousands of jobs in the process.

“Policy makers must recognise how vital business rates, living conditions and workforce skills are to attracting small firms and do everything they can do support them,” he urged.

Small companies provide jobs for 16.8 million individuals in the UK – more than half the total national workforce.

Copyright M2 Bespoke 2016

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