Posted: Tue 23rd May 2023
The UK is fourth in the world and second among G7 countries in a new ranking of how entrepreneurship impacts economies.
According to the analysis of 40 countries by Shopify, UK entrepreneurs using the ecommerce service generated £28.8bn of business activity in 2022 and £14.3bn in GDP impact in 2022.
The report also found that UK entrepreneurs grew exports by 8% with £3.2bn of goods sold internationally. This was second only to the US where companies generated $7.3bn in export sales.
On employment, UK businesses supported almost 200,000 jobs and when it comes to location, the analysis found 60% of UK entrepreneurs are based in rural areas and 40% urban. This shows how digital technology means that where a business is based is not a barrier to growth.
The need to support UK entrepreneurs
Although the UK ranked fourth in the world for GDP impact in 2021, the figure was a 1% decline compared to 2021. The UK's business activity number also fell by 1.1%.
The report warned that with other countries boosting their entrepreneurial activity, the UK needs to focus on supporting small business owners to maintain its global ranking.
Deann Evans, director of EMEA expansion and partnerships at Shopify, said:
"As other nations bolster their support ecosystems, provisions need to be made if the UK is going to maintain its status as a leader amongst the G7 economies."
Also commenting on the analysis, Jack Kennedy, UK economist at Indeed, said:
"Though there is growing optimism that the UK will avoid recession this year, there are signs of a softening labour market, so opportunities to enable entrepreneurship, support jobs and encourage economic growth are a welcome sign both nationally and globally.
"Entrepreneurship is key to small business growth, which is critical as these companies make up a significant part of the UK economy."
Entrepreneurs' global impact
Topping the global league of entrepreneurs' economic impact was the US followed by Lithuania and Romania. The Czech Republic was in fifth place.
In total, business owners around the world supported 5.2m jobs in 2022, an increase of 8.3% on the year before, with exports rising 7% to £27.7bn.
In addition, entrepreneurs globally contributed $229.3bn (£184.63bn) to GDP (8.8% increase) and $490.5bn (£425.52bn) in economic activity (8.6% increase).