UK entrepreneurs provide welcome boost for job creation and drive recovery But market conditions and access to funding remain a concern
London, Monday 14 May 2012: UK entrepreneurs have grown sales by 20% year on year and created a major boost to demonstrate their key role in rejuvenating the UK economy, according to new figures compiled by Ernst & Young.
The findings, based on the finalists of Ernst & Young UK Entrepreneur Of The Year Awards, show that leading entrepreneurs achieved 23% employment growth at their companies in two years across the UK. The number of jobs created by the 151 finalists rose from 51,561 to 63, 618 between 2009 and 2011.
The entrepreneurs have innovated and created jobs in sectors from sushi restaurants, to construction, and clean-technology, in parts of the country suffering stubbornly low employment rates. In Scotland, entrepreneurs doubled their staff, while in London and the South it rose by 43%; the North by 24%; and the Midlands by 8%.
Despite the role in job creation, entrepreneurs still felt they were being held back on this front – with 22% saying a key challenge is not being able to recruit skilled employees.
The findings suggest that entrepreneurs are providing a major impetus to employment after official data showed unemployment falling in the three months to February. The entrepreneurs have seen revenue growth rates of 20% in the past two years.
Stuart Watson, UK Entrepreneur Of The Year Leader, said: “Dynamic businesses, led by entrepreneurs with the energy and insight to drive their businesses forward, have demonstrated that they are a major factor in rejuvenating the UK economy
“However there is a sense that they are achieving these results despite serious issues around talents and skills shortages which need to be tackled.”
Fears about a slow economic recovery remain the biggest concern for entrepreneurs, with 28% citing this as their key challenge. Linked to this is a concern over rising costs (13%). Meanwhile, one in five remain concerned about lack of access to funding, while regulatory burdens seemed to have eased –only cited as a concern by 17% of entrepreneurs. Following the Budget, concerns about rates of tax, ranked as the highest priority last year, did not feature among entrepreneurs’ concerns.
Home or away?
The survey of entrepreneurs found that 28% of entrepreneurs are concentrating on penetrating and consolidating existing markets, compared to 21% looking to international expansion. For entrepreneurs looking abroad the focus remained on revenue growth in the Americas, which almost doubled over two years. Increase in revenue growth from Asia grew by 144%. The combined revenue of Asia Pacific and the Americas was £556million.
Stuart Watson continued:
“Recent changes in the Budget such as changing the 50p tax rate for their top employees, the improvements to the Enterprise Management Incentive and the lower corporate tax rates have helped entrepreneurs. Despite this, there remains some sharp lack of confidence about economic recovery among this crucial demographic.
“It also shows that the export strategy requires further impetus, with many remaining focused on staying at home or in existing markets. Though one in five entrepreneurs is focused on exports, this is still behind the EU average of one in four. The stories we are seeing however suggest that those who are looking abroad are having enormous successes.”