• The UK's SMEs, especially the small number of high growth SMEs, are a crucial engine for growth.
• 99.9 per cent of the UK’s 4.5 million businesses are small or medium-sized, of which around 75% have no employees.
• Together, they are responsible for almost half of the £900 billion private sector output and 60 per cent, or almost 14 million, of private sector jobs.
• SMEs also account for almost half the net growth in jobs.

14 US UK France Germany
12
10
12.3
8
6
4
2
0
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
1. Total Early Stage Entrepreneurship Index : Proportion of the w orking-age population involved in starting or running a business (under 42 months old)
Source: GEM UK 2011
7.6
5.7
5.6
•The World Bank ranks the UK third in Europe, and in top seven globally (out of 183 countries) in terms of the ease of doing business
•In 2011, 7.6 per cent of UK adults were engaged in starting or running a new business
– above France and Germany, but behind the US
•In 2011 there were a record estimated 493,100 business start-ups in England and Wales – 12,700 (3%) more than in 2010.

Business start-ups, by region
Estimate, based on new business bank account openings in Great Britain, 2008-12
140,000
120,000
100,000
80,000
60,000
40,000
20,000
0
2008 2009 2010 2011 2012
Source: BankSearch start-ups data

High growth business in UK
Region
• They are small in number but play a key role
• UK compares well internationally in its percentage of high growth business
• Challenging to identify
W Midlands
E Midlands
Y&H
North West
E England
South West
South East
North East
London
% of high growth business
4.8
5.1
5.3
5.5
5.6
5.8
5.9
6.1
6.9
Source NESTA ‘Measuring Business growth 2009’

 Supportive UK environment for SMEs – some of the lowest entrepreneurship barriers of all OECD countries.
 Healthy percentage of high growth businesses.
 In some sectors, more productive than large businesses.
 Contribution of innovative SMEs to economic growth is strong.
 Smallest businesses are the biggest job creators.

Challenges
SME performance and activity is a key driver of the UK economy. If the UK is to promote growth, we need to support small businesses by addressing the challenges they face.
• Women and black ethnic groups underrepresented.
• Most ambitious SMEs more likely to grow but most modest in the steps to make good their ambition.
• Leadership and management weaknesses and internal capacity constraints.
• Market failures in areas of business support and access to finance.
• Barriers to innovation – innovative business more likely to grow.
• Weak at entering new markets and only one in four export.
• Most do not use the web to sell and secure efficiencies.
• Red tape

 Build growth capability among SMEs more generally, focusing on the market failures that hold SMEs back.
 Foster a more entrepreneurial society in the UK, by reducing barriers and supporting entrepreneurs.

Activities and links to other objectives
SME
–
To increase the provision of finance to businesses so that they can access finance at each stage of business development
–
Ensuring business financial readiness.
– Encouraging SMEs to export and to target new markets
– Strengthening local and national supply chains and improving productivity and manufacturing performance.
– Supporting those looking to start and grow a business through capability building.
–
Ensuring that there is an adequate supply of incubation (and grow on) space and support services where there is market failure.
Others
– Promoting the take-up and exploitation by SMEs and communities of emerging technologies and networks for the digital economy.
– Encouraging SMEs to innovate
–
Developing leadership and management skills.
–
Developing and recruiting a skilled workforce.
–
Developing better links between business and education partners

How will we measure success?
 From an overarching policy context
– increase in domestic and international sales for SMEs
– increase in SME GVA/productivity
– Increase in manufacturing productivity of SMEs
– increase in SME jobs created
– increase in graduate / postgraduate employment in SMEs
– increase in business survival rate (yrs)
– Increase in business density
 From a programme management context
– Number of enterprises receiving support
– Number of new business supported
– Number of new enterprises created
– Number of enterprises receiving grants
–
Number of enterprises receiving financial support
– Employment increase in supported enterprises

Match funding
 Changes in approach for national schemes and changes in the way business support is delivered.
– Integration of advice services as part of the Business Bank programme
– the Single Local Growth Fund
 Potential national match include
– UKTI for expanding on export related activity
– MAS for manufacturing support
– Growth Accelerator
– EIB for access to finance
– Adult Skills Budget for skills and lifelong learning
– Work Programme for employment and labour mobility
 Potential local match
– Universities
– Private sector match
– Local authorities

Principles
 What national schemes exist already, no need to duplicate
 The business support landscape – is it accessible?
– Signposting eg Growth Hub
– Working with other LEP areas
 Services and training that are demand –led
 How schemes can help social enterprises

 Does the suggested framework cover the issues you are looking to resolve?
 What information do you need from Government:
– before the detailed guidance is produced?
– in the detailed guidance?