Economic Situation

Department for Business, Innovation and Skills written question – answered on 9th November 2015.

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Photo of Adam Afriyie Adam Afriyie Chair, Parliamentary Office of Science and Technology

To ask the Secretary of State for Business, Innovation and Skills, what estimate he has made of the contribution of (a) crowdfunding businesses, (b) peer-to-peer lending businesses and (c) big data businesses to the UK economy.

Photo of Anna Soubry Anna Soubry The Minister of State, Department for Business, Innovation and Skills

The state of equity investment in small businesses was assessed by the British Business Bank in March this year. Their report shows an overall increase in equity investment to small firms in each of the past four years, with both the number of deals and the total amount invested showing a clear upward trend. The contribution from crowdfunding has grown strongly since 2012. By the third quarter of 2014, deal numbers exceeded those of private equity, accounting for almost one-third of seed funding deals in the first half of 2014.

The Peer-to-Peer Finance Association publishes quarterly performance data, which show net new lending to small businesses of £91m in Q3 2015. According to NESTA, peer-to-peer lending in the UK grew at a rate of 250% annually between 2012 and 2014. The growth of the UK peer-to-peer lending sector has been facilitated by a responsive and flexible regulatory regime that recognises the importance of a competitive and diverse market for business finance.

The Centre for Economics and Business Research estimates that the big data market could benefit the UK economy by up to £216 billion between 2012 and 2017. Research by NESTA has also found that UK companies making greater use of online customer data are up to 13% more productive than their peers.

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