The FINANCIAL -- Brexit’s threat to burgeoning small firms in Northern Ireland and less dynamic areas of England, Wales and Scotland is underscored in the latest annual health-check of the UK’s SMEs.
The UK Local Growth Dashboard 2018, published by the Enterprise Research Centre, paints a stark picture of the nation’s varied growth geography among small and medium-sized enterprises.
According to Aston University, Northern Ireland takes the top spot on many of the firm-level growth measures, while rural and coastal parts of England, Wales and Scotland display more sluggish activity. On productivity, job-creating firms in parts of the North of England and Midlands are outpacing the South in growing turnover faster than their headcount. Only 8.4% of job-creating firms in the UK have positive productivity growth.
The findings provide a grassroots dimension to previously-published UK government predictions on the impact of Brexit on regional economies. A no-deal exit from the EU, ERC academics suggest, could have a further detrimental effect on areas where the private sector is already showing a lack of dynamism.
Key findings from the report show that:
Northern Ireland has some of the UK’s fastest-growing and most productive firms. Outer Belfast and Eastern NI have the highest proportion of companies reaching their ‘first million’ within three years of start-up (3.3%). This is striking given NI’s comparatively high reliance on the public sector.
Northern Ireland also came top of the productivity rankings, with 11% of job-creating firms growing turnover faster than employment over the 2014-17 period (UK average 8.4%). The ‘Northern Powerhouse’ region also performed strongly on this measure, led by Greater Manchester and Greater Leeds.
Larger OECD-defined high-growth firms (average growth in employment of 20% or more over a three-year period and having at least 10 employees) are concentrated in a southern triangle bounded by Cambridge, Bristol and Brighton.
Start-up rates are highest in London and the wider South of England, with hotspots in the Midlands and North. Wales, Scotland and Northern Ireland show much lower start-up rates than England.
Coastal and rural parts of England in general show lower rates of business growth on most metrics compared to urban areas.
The UK’s 5.7m SMEs constitute over 99% of businesses, employing more than 16m people and have a combined annual turnover of £1.9trn, 51% of all private sector output.
The ERC is the UK’s leading source of independent research on the growth of SMEs.