The second edition of London Stock Exchange’s 1000 Companies to Inspire Britain report, celebrating and showcasing the UK’s most inspiring and dynamic scale-up businesses, was launched with much success at the beginning of March.
The publication is a significant part of London Stock Exchange’s broader campaign to support the UK’s ambitious companies in their growth journeys and to create an entrepreneurship revolution. It is these businesses that are vital to the UK’s prosperity, yet they still face significant hurdles in realising their achievements and often remain under celebrated and under recognised.
Once such hurdle London Stock Exchange feels strongly about helping these businesses overcome, is their dependence on bank and debt finance. Together with the wider business community, we are committed to educating and encouraging these businesses to look at equity financing as a viable source of long-term stable capital.
Together with the UK Government and business community, much progress has been made in diversifying the UK funding ladder for these firms but despite this, recent statistics from the British Bankers’ Association continue to highlight a trend amongst many businesses towards debt financing. Only three per cent of UK SMEs using equity finance, which is in stark contrast to the US, where over 70 percent of financing comes from various types of equity: angel investment, crowd-funding, venture capital, private equity, a stock market listing.
Aside from support through providing capital, simply celebrating and highlighting some of these businesses is also crucial in boosting their profile and helping them to further grow and develop. London Stock Exchange’s 1000 Companies to Inspire Britain report does exactly that. The result of positive collaboration between UK Government, financial market participants, investors, entrepreneurs and companies, it highlights the achievements of many of the UK’s most inspiring businesses.
The report is unique in its approach in identifying the UK’s high growth businesses. It looks at private and listed companies and focusses on metrics beyond short term revenue and profit growth, painting a more accurate portrayal of the wider economy. Not only is revenue growth over the last four years taken into account but also how companies have performed against their sector peers. This unique methodology reveals a community of UK businesses richer and more varied than we believe ever identified in any other exercise of this type.
Interesting trends have emerged one year further on from the financial crisis. Certainly a recovery being built on jobs: 50 recruitment firms made the list, a 100 per cent increase on the previous year. And a recovery not limited to London either, with over 75 per cent of the 1000 companies drawn from outside the capital.
Within the report, exactly a quarter of the 1000 companies operate in manufacturing, construction and engineering, and many within that group work at the very cutting edge of their industries. This is striking and a cause for celebration dispelling numerous myths around the UK economy, such as the demise of manufacturing.
Sectors such as IT, telecommunications and financial services remain very well represented and have been propelled by support networks such as TechCity UK, spearheaded by Joanna Shields. Its recent Tech Nation report was the first of its kind on the state of the UK’s digital economy, confirming that the sector has become a new but now integral part of the country’s growth. According to the report, digital employment is forecast to grow 5.4 per cent by 2020, higher than total job growth. Alongside the big sector shifts, intriguingly the report also tracks some of the nation’s changing tastes and hobbies: three Mexican restaurants make the list for the first time as does a high-end cycling clothing company.
What is evident from looking at this year’s report is that UK entrepreneurs continue to set up businesses that create jobs for the UK population and contribute to the continued economic recovery. We think it is important to celebrate that success and strive to create an environment that encourages innovation and helps the current crop of SMEs flourish and become the blue-chips of tomorrow.
We hope you are inspired.