The number of UK start-up businesses saw record growth in 2003, according to the government's Small Business Service.
The number of enterprises in the UK rose by 200,000 compared with 2002. This is the biggest increase since records began in 1995.
Of the total number - almost four million - only 6,000 firms fell outside the SME space, with 99.2 per cent classified as small (with fewer than 49 employees). SMEs accounted for almost 60 per cent of UK employment and 52.4 per cent of turnover in 2003.
Nigel Griffiths, minister for small business, said: "Small and medium-sized businesses are the engine room of the UK economy.
"This growth bears out the government's commitment to the SME sector, through the Small Business Service providing a strong voice for small firms within government, to Business Links providing quality support and advice to enable firms to expand."
The news was welcomed by the channel, for whom the SME sector has been highly lucrative in the tough past few years, especially as firms have become more technology-driven.
Ian Snadden, director SME and channel at vendor Fujitsu Siemens Computers, said SMEs are a key IT market, and claimed that the channel is vital for this sector.
"SMEs account for more than 30 per cent of our UK business," he said. "They are particularly important for the channel, because SMEs need resellers more than anybody. They are their IT departments.
"During the past three or four years, when the enterprise market went quiet, the IT market was well supported by SMEs."
Snadden said the number of new start-ups is a sign of increased confidence. "It is a sign that there is an ability to grow a profitable business," he said.
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