Just 1pc of businesses create 36pc of growth
Two in three new jobs (68%) were created by that 1%, totalling more than 250,000 jobs.
The companies, which are defined in the report as ‘high growth small businesses’ (HGSBs), have an annual turnover between £1m and £20m with average annual growth greater than 20% over a 3-year period.
Simon Rogerson, chief executive of Octopus, said: “This report shows just how vital these companies are to our economy – they are not just the lifeblood but the lifeline to our economic growth and recovery.
“We often hear about the value and importance of enterprise and high growth companies but for the first time this report quantifies the sheer size of the contribution made by these companies.”
There are currently 30,000 high growth small businesses in the UK following an 18% rise from 2011 to 2013.
John Allan, national chairman of the Federation of Small Businesses, said: “These findings underline the critical role small businesses play in the UK economy.
“The report shows that some small firms play a disproportionately large role in creating growth, innovation and new jobs.
“It highlights how important it is for policy makers to give their backing to small businesses and endeavour to create a business support environment that allows these businesses to grow and prosper.
“A key element to this will be making sure businesses, wherever they are located, have access to a range of finance options to support their ambitions to grow.”
More than one third of HGSBs are located in London and the South East, with almost one in 25 workers in the capital employed by a HGSB.
Vince Cable MP, secretary of state for business, innovation and skills, added: “Government recognises that a small percentage of firms generate a disproportionate amount of innovation and employment growth.”