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Business ownership in the UK, 2011

Only 1% of registered businesses in the UK Business Economy in 2011 were foreign-owned but these businesses contributed 28% of value added

This short story uses a snapshot of ONS’s Annual Business Survey (ABS) to look at the contribution that foreign-owned registered businesses (20.9 Kb Pdf) in the UK make to the UK Business Economy, and their country of ownership.

In 2011, only 1% of registered businesses in the UK Business Economy were foreign-owned (20.9 Kb Pdf) however these foreign-owned businesses contributed 28% of total UK approximate Gross Value Added (aGVA, or simply “value added”) (20.9 Kb Pdf) (see Figure 1).

One reason for this is that foreign-owned businesses are more likely to be large in terms of employment and, on average, larger businesses add more value to the UK Business Economy than smaller businesses.

Micro businesses (those with fewer than 10 in employment) were the least likely to be foreign-owned. Around 0.5% of micro registered businesses were foreign-owned and these businesses contributed 5% of value added.

This contrasts with large businesses (those with 250 or more in employment), where around 28% of registered businesses were foreign-owned and these businesses contributed 40% of value added (see Figure 1).

Figure 1: Contributions of foreign-owned registered businesses to the UK Business Economy by employment size, 2011

Figure 1: Contributions of foreign-owned registered businesses to the UK Business Economy by employment size, 2011
Source: Office for National Statistics

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Regardless of employment size, the contribution of foreign-owned businesses to value added remained larger than their contribution to the number of businesses.

This suggests that average value added per business was higher for foreign-owned businesses than for UK-owned businesses, although as employment increases, the relative gap between value added per business contributed by UK- and foreign-owned businesses decreases.

Production saw the largest contribution from foreign-owned registered businesses

Regardless of industry sector, the contribution of foreign-owned registered businesses to value added was larger than their contribution to the number of businesses (see Figure 2). This may be partly explained by the different types of activity being undertaken by UK- and foreign-owned businesses within the industry sectors.

The Construction sector (20.9 Kb Pdf)  had the smallest proportion of foreign-owned businesses, where 0.3% of registered businesses were foreign-owned but these businesses contributed around 7% of value added. This contrasts with the Production sector (20.9 Kb Pdf) , where around 3% of registered businesses were foreign-owned but these businesses contributed around 46% of value added (see Figure 2).

Figure 2: Contributions of foreign-owned registered businesses to the UK Business Economy by industry sector, 2011

Figure 2: Contributions of foreign-owned registered businesses to the UK Business Economy by industry sector, 2011
Source: Office for National Statistics

Notes:

  1. The Production sector includes Agriculture (part), forestry and fishing.

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The majority of foreign-owned registered businesses in the UK Business Economy were European-owned

Of the foreign-owned registered businesses in the UK Business Economy, 53% were European-owned. Of all the continents, America (North and South combined) had the second highest share of ownership, accounting for 34% of foreign-owned businesses in the UK. These continents accounted for a similar share of foreign-owned value added; 50% for Europe and 40% for America.

Of all foreign countries, the United States of America had the highest share of ownership, accounting for 26% of foreign-owned registered businesses in the UK. It also accounted for the highest share of value added produced by foreign-owned businesses in the UK (32%).

The rest of the top 10 foreign countries contributing to value added in the UK Business Economy were: France, Germany, Netherlands, Switzerland, Spain, Japan, Canada, Jersey and Luxembourg.

 

More information by continent and country of ownership is available in the accompanying infographic.

All the estimates in this release are experimental. Users are asked to take this into account when interpreting the data.

For the data behind this short story, please see the data tables (156 Kb Excel sheet) .

Background notes can be found on the ONS website (20.9 Kb Pdf) .

This short story is intended as a one-off piece of analysis with the 2011 ABS. However, please contact us if you think that similar analyses for future years would be useful to you, or if you want to provide comments on this short story.

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