Commentary by Tim Hames, Director General, British Private Equity & Venture Capital Association
It is difficult to believe this is already the fifth edition of this brilliant initiative. Of course, the world today looks a rather different place compared to 2013, but what has not changed is the absolutely vital role that SMEs play in the UK economy and society, and their deserved recognition in this publication.
Small and medium-sized enterprises are more than just numbers in a Treasury press release or economic paper: they are employers, revenue generators and community and social fixtures. There are estimated to be in excess of 5.687 million SMEs in the UK, employing more than 16 million people and generating a turnover of £1.9bn. Yes – it tends to be the larger companies that get much of the attention, and their contribution to British life is, of course, significant, but the SMEs show the real anatomy of a nation.
This is why SMEs not only require the continued support of politicians and regulators and the like, but they are also the reason why more needs to be done to ensure that the UK remains one of the most attractive places in the world to start, run and invest in a business. Our membership, currently topping 700 – a BVCA record – includes 300 private equity and venture capital fund managers. Over the past five years, they have invested £27bn into more than 3,800 UK companies. The overwhelming majority of these – 86% to be precise – were SMEs.
These, clearly, are not insignificant numbers and it is absolutely imperative that the channels of funding are open and flowing freely. Yet access to finance is a long-standing problem for SMEs, be they start-ups, scaleups or beyond, and it is one recognised by the Government, most explicitly seen in the Patient Capital Review and released alongside the Autumn Budget in 2017.
It was a welcome development and one that could have a transformative impact on the SME funding environment, and help even more entrepreneurs, founders, owners and business leaders to fulfil their ambitions and spearhead the next generation of economic growth.
And, it is towards that future that I commend this report and London Stock Exchange Group’s wider support for high-growth companies.
To pick just 1,000 enterprises is an immensely challenging task; those featured within represent some of very best the UK has to offer.