SMEs to generate £16bn a year despite fears over Brexit, report predicts
Small and medium-sized businesses (SMEs) are set to generate £16 billion for the UK economy each year by 2020, despite Brexit, a new report shows.
Bristol, Leeds, the City of London, Birmingham and Brighton are tipped to see the biggest rise in SME growth over the next four years, according to research by Capital Economics and commissioned by energy firm npower.
Together, the top 15 cities with the best SME growth prospects are set to create a total of 200,000 new jobs by 2020, Capital Economics said.
That is despite fears over an economic slowdown in the wake of the EU referendum.
"Overall we expect that the impact of Brexit will be more modest than other commentators suggest and we expect all regions to grow by an average of more than 1% per annum in the next five years," Capital Economics said.
The economics analysis firm ranked UK cities by growth prospect scores, which were calculated using four metrics.
Those metrics considered the regional economic outlook, the change in the number of SMEs in the city since 2010, the share of fast-growing SME industries, and the quality of the business environment, which considered workforce skills, property costs and broadband speed.
In descending order, the top 15 UK cities expected to see the biggest rise in SME growth by 2020 are: The City of London, Bristol, Leeds, Birmingham, Brighton and Hove, Manchester, Nottingham, Leicester, Westminster, Liverpool, Derby, Oxford, St Albans, Southampton and Edinburgh.
The City of London is expected to benefit from a strong growth outlook, and access to a high-skilled workforce that is drawn by attractive living conditions. Over 36,000 jobs are set to be created in the city as a result, the report explains.
Meanwhile, small to medium-sized businesses are expected to contribute £11.1 billion per year to Bristol's economy by 2020 amid fast growth in the television, music, video and financial service industries.
Companies in those sectors are forecast to benefit from low business rates, good internet connection rates and an enterprise zone which provides tax breaks and government support.
Meanwhile, Leeds is set to see 4,000 jobs created and a £1.9 billion contribution to the economy per year by 2020, with SMEs benefiting from low property prices and access to the local airport.
Birmingham-based SMEs will contribute £13.8 billion per year to the local economy, with health and education identified as the city's fastest growing sectors.
Dale Murray, CBE & Board Advisor at the Centre for Entrepreneurs, said: "Growth of SMEs will be crucial to the British economy over the next five years as they create tens of thousands of jobs.
"Policy makers must recognise how vital business rates, living conditions and workforce skills are to attracting SMEs and do everything they can to support them."