Business

Less than 1% of north's business provides over half of economic growth

High growth small businesses (HGSBs) in Northern Ireland made up less than 1 per cent of local business, yet were responsible for more than half (51 per cent) of economic growth
High growth small businesses (HGSBs) in Northern Ireland made up less than 1 per cent of local business, yet were responsible for more than half (51 per cent) of economic growth High growth small businesses (HGSBs) in Northern Ireland made up less than 1 per cent of local business, yet were responsible for more than half (51 per cent) of economic growth

A TINY group of thriving businesses in the north account for more than half of Northern Ireland's economic growth, new figures show.

The Octopus High Growth Small Business Report 2018 has revealed that strong growing small businesses are driving productivity growth - contributing more than six months of additional economic output every year in comparison to an average business in the north.

The research, commissioned by Octopus Group and produced by the Centre for Economics and Business Research (Cebr) , shows that high growth small businesses (HGSBs) in Northern Ireland made up less than 1 per cent of local business, yet were responsible for more than half (51 per cent) of economic growth in the region. This is despite Northern Ireland having the fewest number of HGSBs in the UK (389).

A HGSB is defined as a business generating revenues of between £1m and £20m a year and who have grown in excess of 20 per cent each year over the three-year period to date. The north is more reliant on HGSBs for economic growth than any other region in the UK according to the new figures, while HGSBs are 57 per cent more productive than the average business

In the UK as a whole HGSBs were 18 per cent productive than the average business, contributing to 22 per cent of economic growth and creating more than one in five new jobs.

In spite of the clear value of HGSBs to the local economy, evidence has been found that barriers to growth are preventing them from achieving their full potential.

A total of 90 per cent of HGSBs in the UK reported skills shortages, while over half (55 per cent) consider digital infrastructure an important constraint to growth. A total of 45 per cent of HGSBs consider transport as an inpediment to growth.

Co-founder of Octopus Group, Chris Hulatt said high growth small businesses in Northern Ireland must be given every opportunity to flourish and grow.

“The potential is clearly huge, and we know that if you champion these businesses and implement policies to support them, they can provide a real boost in terms of jobs and productivity to our regional economies.”

"The Government has done a great job in supporting entrepreneurship in the UK but more needs to be done to tackle some of the growing challenges these businesses face."