A majority of UK small businesses are expecting to grow in 2011, a study by Barclays shows, reinforcing faith in smaller businesses’ ability to drive economic growth.

The studied by Barclays Business and Kingston University Small Business Research Centre showed 66 per cent anticipated their business growing next year, with 35 per cent entering new markets and 34 per cent looking to strengthen existing client relationships to potentially increase sales.

Showing a forward-thinking outlook, two-thirds of respondents to the survey of 1000 small and medium-sized businesses said they intended to at least maintain investment in innovation.

Travers Clarke-Walker, director of Barclays Business, said: “The importance of SMEs (small and medium sized enterprises) has been acknowledged for some time, but never more so than now, with their performance forming a central component of the recovery, its speed and outcome.”

Professor Robert Blackburn from Kingston University said the report – The year ahead: a view from Britain’s small businesses – showed SMEs were able to make a ‘significant contribution’ to the economy in terms of employment, sales and innovation.

“However, it is worth noting that whilst owner-managers are proactive in terms of planning for survival, development and growth, their success is partly dependent on the level of demand in the economy for their goods and services,” he added.

Manufacturing, transport and communications, and financial services sectors were identified as leading the way in terms of growth, optimism and employment.

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