SME influence continues to grow

Small and medium sized firms are exerting ever-increasing influence on the UK economy, according to latest figures from the Department of Trade and Industry's Small Business Service (SBS).

The SBS statistics, which provide an overview of SME performance in 2002, showed that small businesses – those employing less that 50 people – accounted for a staggering 37% of the £2,200 billion of turnover generated by UK firms last year.

Although the percentage of small businesses trading in the economy remained even at 99.1%, this represents a substantial increase on the 31.2% of revenue contributed by such firms in 2001. With medium sized businesses (50-249 employees) chipping in a further 15%, SME’s are now responsible for more than 50% of the turnover total.

2002 figures also revealed a slight increase in small businesses employment rates, with 43.7% of all workers (compared with 43.4% in 2001) being employed by small firms. This was in spite of a 1.3% rise in the number of firms with no employees, sole traders and single director companies for instance.

Large businesses (250 employees+) continue to hold a dominant position, however. Despite just 0.2% of UK firms falling into this category, they employee 44.4% of the workforce and generate 48% of total revenue.

As in previous years, small businesses continue to be the main employers in industries such as agriculture (94.6%) and construction (73.5%), wielding far less influence in areas including finance (14.7%) and transport and communication (29.8%).

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