Some £16 billion will be generated annually by the British cities which have the best growth prospects for SMEs, with more than 200,000 jobs created by 2020 in the UK economy, according to a report by npower Business and Capital Economics.
SMEs are already keeping more than half of people in the UK in work, with 16.8 million people clocking in to one daily.
This size business accounts for almost four fifths of the increase in private sector employment since 2010, contributing significantly to the UK economy and employment growth.
Capital Economics expects the British economy to grow at an average of around 2 per cent over the next five years, despite the dampened national growth forecasts following the recent vote to leave the EU.
The npower Business SME Growth Forecast Index has identified the City of London, Bristol, Leeds, Birmingham, Brighton and Hove, and Manchester as the cities with best potential for SMEs in the next five years. Workforce skills, property costs, government policy and broadband speed are just some of the key factors that influence the underlying business environment that is vital for supporting SME growth.
Top cities for SME growth prospects
The cities cited as having the best growth prospects include the City of London, whose SMEs will be set to thrive due to a strong economic growth outlook, access to a highly skilled workforce and because of attractive living conditions in the region.
Bristol is another top prospect, with fast-growing SME industries including television, video and music production and financial services support.
SMEs in Leeds gain from relatively low business rates and property prices and access to a local airport. The city has existing clusters in three of the ten fastest growing industries (office administration, finance support services and other professional and technical sectors).
Philip Scholes, head of npower Business says, ‘SMEs are critical for future economic growth in the UK. These businesses have been the backbone of the country in recent years and, as this research shows, there is significant opportunity for them to grow further over the next few years.
Dale Murray, CBE and Board Adviser at the Centre for Entrepreneurs adds, ‘The report highlights the fantastic opportunities around the UK for entrepreneurs to start new businesses and to expand existing ones.’