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Funding the growth economy to kickstart an investment-led recovery
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What is the growth economy?
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Why is it critical?
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Why is it urgent?
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Solutions
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Download the report
What is the growth economy?
The growth economy is a major employer across all UK regions. Growth economy companies underpin all sectors of the UK economy, and are particularly prevalent in business services and industrial manufacturing. Growth rates for these companies tend to be fastest in financial services, infrastructure and technology.
£2.5-100m
Growth economy companies report turnover of between £2.5-100 million.
Crucially, PwC found that growth economy companies are likely to play a significant role in tackling some of the society-wide problems that have been identified by the government as the UK’s “grand challenges”. These include:
- Artificial intelligence
- Clean growth
- The ageing society
- The future of mobility
The growth economy supports all regions of the UK
21400
There were 21,400 growth economy companies across the UK in 2018.
67
%
The growth economy is regionally dispersed with two thirds of companies based outside Greater London.
Percentage of growth economy companies by region.
- North West – 11%
- South East – 11%
- West Midlands – 8%
- East – 8%
- North East – 7%
- East Midlands – 6%
- South West – 6%
- Scotland – 6%
- Wales – 2%
- Northern Ireland – 2%
Why the growth economy is so critical?
Britain’s success post-Brexit depends on the vitality of its growth economy, and the vibrancy of its most successful small and medium-sized businesses.
The government has done well in protecting jobs since Covid-19 struck in March, but the response to the pandemic now requires different action from the state – not to intervene heavily, but to help to unlock a supportive environment in which growth economy companies can flourish and power future growth.
How much the growth economy businesses matter to the UK economy
£
434
bn
Total turnover of the growth economy was £434 billion in 2018.
This made up 20% of UK GDP in 2018, £434bn of £2,144.3bn.
Rather, alongside separate measures to address the threat of rising unemployment, the state needs to help companies to help themselves, by breaking down barriers to acquiring the equity they so badly need.
Central to this is smart regulatory thinking, involving, most immediately, the long-promised liberalisation of pensions regulation. This development would help to transform us into a nation of investors in the growth economy.
25
%
A quarter of growth economy companies operate in one or more of the four areas outlined as “grand challenges” by the government.
Growth economy companies see larger profits and growth.
4
%
The annual growth of the growth economy was 4% between 2013-18 compared to 2% annual GDP growth in the period.
Why supporting the growth economy is so urgent
COVID-19 response
There are many reasons why we must act urgently to support the growth economy. The most pressing is the scale of the recession that Covid-19 has inflicted on the UK.
Brexit
The recession also comes at a time when the UK is negotiating its exit from the European Union. A disorderly Brexit has the potential to create further disruption of the funding landscape for the growth economy.
In the current environment, the growth economy, with its agility and ingenuity, is exactly what is needed to spearhead and respond to change – but it urgently needs funding.
Solutions needed for the future of the growth economy.
Britain’s success post-Brexit depends on the vitality of its growth economy, and the vibrancy of its most successful small and medium-sized businesses.
In Britain, these companies face traditional, structural problems in securing the funds they need – not only compared to larger companies, but also compared to their peers in other countries.
To find out more about the solutions needed for the future of the growth economy download the report.
Funding the growth economy to kickstart an investment-led recovery
This report examines the history of the funding landscape for small and medium-sized businesses in the UK, gauges the economic impact of the Covid-19 crisis, and lays out a detailed plan for an investment-led recovery.
Download nowThe experts behind the report
Sir Anthony Seldon
Stephen Welton
Bill Winters
Catherine Clarke
Dame Nancy Rothwell
David Prior
David Willetts
Diane Noble
Douglas Fint
Irene Graham
Jim O'Neill
John Fingleton
Karan Bilimoria
Lucy Armstrong
Martin Vander Veyer
Martin Wolf
Matthias Klaes
Nigel Rudd
Peter Read
Richard Seebohm
Robert Gardner
Rohan Silva
Rupert Harrison
Sherry Coutu
Sir Jon Symonds
