By Jonathan London on 15th June 2015

Micro-businesses ‘driving productivity in UK economy’

A new report has highlighted the increasingly critical role that self-employed people starting their own micro-businesses are playing in driving growth for the UK economy.

Compiled by the Royal Society for the Encouragement of Arts, Manufactures and Commerce (RSA), in collaboration with Etsy, the Second Age of Small report has called on the British business community to recognise the positive impact these smaller firms are making nationwide.

According to the analysis, the number of micro-businesses – meaning firms with up to nine employees – has shot up by 50 per cent over the last 15 years, with their performance challenging conventional assumptions that the growth of the small business community would be accompanied by an economic decline, or the creation of lower-quality jobs.

In fact, micro-businesses are outperforming larger competitors in 12 of the UK’s 19 fastest-growing sectors, delivering higher productivity in areas such as health, education and social work, while staff satisfaction also tends to be higher.

According to the Global Entrepreneurship Monitor, 80 per cent of people think entrepreneurs have a high level of respect in society, while 55 per cent believe most people see starting a business as a good career choice.

Key drivers of this trend include the advent of new technology that make it easier than ever to start up a company, as well as a reduction in bureaucratic burdens by successive governments to make life easier for smaller organisations.

Meanwhile, the shift in the UK economy from a manufacturing focus to a service-oriented model has also suited micro-businesses, which are better placed to deliver tailored, responsive and close relationships with their clients than large monolithic corporations.

Benedict Dellot, senior researcher at the RSA, said: “Our research has shown that micro-businesses can thrive under the right conditions and provide far greater value to the UK economy than previously thought. We should not fear the second age of small – rather, we should celebrate its coming.”

Jonathan London Written by Jonathan London

Was this article helpful?


Although we attempt to ensure that the Information contained in this publication is accurate and up-to-date at the date of publication it may not be comprehensive, we accept no liability for the results of any action taken on the basis of the information they contain and any implied warranties, including but not limited to the implied warranties of satisfactory quality, fitness for a particular purpose, non-infringement and accuracy are excluded to the extent that they may be excluded as a matter of law.

Share this blog

View our latest blogs

Take a look at our recent blogs below.

We’re here to help

Discuss your business and accountancy
needs in detail with our friendly team with
absolutely no obligation.

Call our friendly team on 0808 168 0422 or

Request a call back

(Open 8.30am to 5.30pm Monday to Friday)

Emily Ewin New Client Manager
Emily Ewin New Client Manager