Xavier Rolet: How Stock Exchange is unlocking Yorkshire’s business potential

Chancellor George Osborne has staked his reputation on the Northern Powerhouse.
Chancellor George Osborne has staked his reputation on the Northern Powerhouse.
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TODAY, London Stock Exchange launches the third edition of its flagship 1000 Companies to Inspire Britain report: an annual celebration of the fastest-growing and most dynamic small and medium-sized enterprises (SMEs) in the UK.

As well as identifying 1,000 inspiring companies, including 79 from Yorkshire, the publication demonstrates the continued strength of British business and the thriving entrepreneurial spirit taking hold across the country.

In the last few years there has been a radical culture change in our attitude towards entrepreneurship and small firms. Even five years ago there was relatively little effort to inspire and encourage people to consider entrepreneurship as a viable career choice.

But together with Government, entrepreneurs, the broader advisory community and investors, we are helping to change that perception and creating an ecosystem to support these businesses in their journey from ‘start-up to stardom. ’

It is these businesses that create higher paying jobs, boost tax intake, create wealth and a competitive advantage for Britain for generations to come. They also create an economy better able to adapt to change.

UK policy makers understand the power of entrepreneurialism and continue to take steps to promote this across the UK. Tech City’s Upscale and Future Fifty programmes, providing entrepreneurs with access to expertise within Government and the private sector, along with the abolition of Stamp Duty on small cap shares and allowing AIM shares to be held in ISAs, are all letting UK businesses foster greater innovation and growth.

Our report continues to receive cross-party support from leading politicians including Chancellor George Osborne and John Swinney MSP, Scotland’s Deputy First Minister and Cabinet Secretary for Finance, Constitution and the Economy.

And, to mark the launch of the publication this morning, Business Secretary Sajid Javid and 40 of the company CEOs to open trading, including John Marren, CEO of Barnsley-based Company Shop.

Looking at the report in more detail, the 1,000 companies we have identified are growing at an average of 50 per cent a year, a staggering rate given the recent tepidness of global growth.

Around 78 per cent are headquartered outside London, demonstrating that Britain’s economic future is not reliant on the South East.

There are 79 companies represented from Yorkshire and the Humber, an increase of five per cent since last year.

The average turnover growth of these firms also continues to rise, now at 55 per cent, compared to 52 percent in 2015. In fact, 22 per cent of local companies made the report for a second time running, proving they are not a flash in the pan.

Sector diversity also continues to be impressive. From video games developers to specialist construction firms and a leading coffee sourcing and roasting business, there are a variety of Yorkshire businesses in the spotlight.

Featured in the publication, Wakefield-based video games publisher Team 17, best known for creating the Worms and Alien Breed video games, discusses how it plans to quadruple its turnover and likely double its headcount in the next five years.

But raising the national awareness of these businesses and their contribution to the UK economy is not enough. We know that for many financing remains a hurdle and creating opportunities to bring them together with investors, the business community and politicians is instrumental to supporting measures that increase access to finance, of all types, not just bank lending, for SMEs and growth companies.

Bank lending will always be an important source of finance – it has helped countless businesses up and down the country.

Thankfully, banks are starting to lend again to SMEs, but they should not be the only source of finance and for high growth companies like these 1000, we believe there is a better option.

We need to unleash the power of equity finance – where people seek investment to grow their business either through individual investors, Venture Capitalists, on the markets or through crowdfunding and peer to peer platforms – in return for a stake in that business.

The report demonstrates the UK is home to hundreds of inspiring smaller businesses, and this is thanks in part to a determined focus to make it easier for UK entrepreneurs and young companies to flourish at home.

These 1,000 companies and stories are proof of all that the country has to offer.

We know they hold the key to unlocking more innovation, more jobs and more opportunities. We will do all we can to make sure they and the hundreds more from across Yorkshire and the UK receive the support they deserve.

Xavier Rolet is chief executive of the London Stock Exchange Group.