Nottingham, 2 December 2010 — New analysis published today by Experian® reveals that out of all the jobs created by small and medium sized enterprises in the UK over the last 10 years, 4.4 million were created by fewer than 10 per cent of SMEs. According to Experian’s analysis, these ‘champion’ high-growth firms created two thirds of all the jobs within the SME community and identifying and nurturing potential champions holds the key to driving economic growth.
Against a backdrop where the Government is establishing Local Enterprise Partnerships, Growth Hubs and Regional Growth Funds, the analysis published today in Experian’s latest Insight Report identifies the characteristics of SME champions, where they are located in the UK, where future champions will emerge and how their numbers can be increased.
Experian’s extensive analysis – spanning the last decade and encompassing over 1.5 million private sector businesses – challenges current thinking about the level of emphasis placed on fast-growth sectors and regions. The report also provides groundbreaking insight on how to pinpoint the real drivers of future economic growth.
Key findings from ‘Tomorrow’s Champions: finding the small business engines for economic growth’, include:
Job creation - “Punching above their weight”
The Midlands and the North – two incubators for future ‘champions’
Figure 1: Breakdown of area and potential champions.
Survival of the fastest: the facts
It is not all about growth industries
Charlotte Hogg, Managing Director of Experian UK & Ireland, said: “All eyes are on private sector SMEs to drive growth, but encouraging them to take the risks associated with growth at a time when they are focussing on survival will be a challenge. Our analysis tells that less than 10 per cent of SMEs firms have created millions of jobs in the last decade. The challenge for Government is how to identify budding ‘champions’ and give them the support they need while still helping support the rest of the SME population who are the bedrock of the economy.
Our research shows that support focus should not be on just sectors. For Government, it will be key to ensure that the new Local Enterprise Partnerships and Regional Growth Fund do not over emphasise the high tech or green sectors because champions can exist in all sectors.
It is also not about regions. Some of the least resilient areas in the UK have some of the highest levels of potential champions - driven by a need to innovate.
The key to driving rapid employment lies in the ability to identify potential champions – new and old – that share the same DNA as the 10 per cent that have fuelled employment over a ten year period. Our research shows that it absolutely matters who leads the business, and their experience, and it matters whether that business is linked with other high growth companies, and whether or not they have an international focus.”
For a copy of the report, please visit http://www.experian.co.uk/insight-reports/index.html
Ms Serj Heera
0115 992 2773/07837 652169
Overview of methodology
Experian’s research into the UK’s fast growth champion businesses uses data from Companies House looking at businesses that have been trading since 2000 as well as field research conducted by directory based companies.
The research is focused on a universe of 1.5 million businesses where employment data was available. Non-limited businesses and large companies with more than 10,000 employees were not included.
Several consecutive three-year periods between 2000 and 2009 were examined. The characteristics of businesses that experienced high growth within any of the three year periods were identified and included in a model to help distinguish those that would go on to achieve high growth from the remainder.
Experian is the leading global information services company, providing data and analytical tools to clients in more than 90 countries. The company helps businesses to manage credit risk, prevent fraud, target marketing offers and automate decision making. Experian also helps individuals to check their credit report and credit score, and protect against identity theft.
Experian plc is listed on the London Stock Exchange (EXPN) and is a constituent of the FTSE 100 index. Total revenue for the year ended 31 March 2010 was $3.9 billion. Experian employs approximately 15,000 people in 40 countries and has its corporate headquarters in Dublin, Ireland, with operational headquarters in Nottingham, UK; Costa Mesa, California; and São Paulo, Brazil.
For more information, visit http://www.experianplc.com.