Regional entrepreneurs running small and medium sized businesses are vital to national recovery, two separate reports have shown.
In the wake of claims that northern companies are financing southern recovery, a survey by professional services provider Ernst & Young found that dedicated and enthusiastic northern bosses increased company turnover by 24 per cent last year — beating their southern counterparts by a full five points.
Companies based in London and the South achieved a growth figure of 19 per cent, the survey of finalists in its Entrepreneur of the Year competition found. Scotland fared little better, achieving 17.1 per cent, with the Midlands — traditionally the power-house of the British economy — managing just 12 per cent.
Of almost 130 nationwide businesses sampled, northern bosses were also the most optimistic about recovery with 83 per cent expecting a “significant” turnaround. Forty-three per cent of Scottish firms also had a positive outlook, with 36 per cent of those in London and the South and 30 per cent in the Midlands expecting improvement.
But while the North lead on growth the survey showed that Scottish entrepreneurs were creating significantly more new jobs, with almost 70 per cent adding to their workforce last year. The national average for job growth was just 17.2 per cent.
“The importance of entrepreneurs in leading the economic recovery is clear, with their contribution to the growth, revenue and jobs vastly ahead of the economy in general.
“Innovative and fast-growing businesses have helped the UK regions to become world players in many industries,” said Ernst & Young director Simon Whiteside.
Echoing the optimism, the Yorkshire Bank has claimed that almost every small and medium sized North-East business planned to expand during the coming year. A staggering 98 per cent of the region’s managers saw 2014 as a period of “real recovery”.
Of those, 86 per cent claimed that keeping pace with demand was driving investment, with more than three-quarters feeling optimistic about the future. Half of all bosses felt there were now no barriers to them making financial investments.
“These are encouraging results,” admitted Yorkshire Bank’s regional director Alan Young. “As the majority of UK companies are small and medium sized businesses, this has to be good for the economy as a whole. It’s important that we recognise and understand that there are still barriers to growth for some businesses.
“Access to funding has changed across the market place,” he added, “but it is available to well-managed companies with strong plans for growth.”
Those North-East firms that are securing new capital are spending it on three distinct areas, the bank’s research has shown. Half said they would be investing in technology and upgrading equipment, with an equal number using the money on staff training. Almost 40 per cent prioritised new product development.
Conducted as part of Yorkshire Bank’s Business Week, the survey showed that the region’s small and medium sized businesses invested 13 per cent of turnover on growth. Expanded across the UK that would average £34,000 per company and be worth up to £160bn to the British economy.
