Small and medium sized enterprises (SMEs) supply 80 per cent of the government's business taxes and rates, research for the Federation of Small Businesses (FSB) has said.
The sector is also responsible for 60 per cent of technology and process innovation said the FSB, despite only receiving three per cent of government business assistance.
The federation has called for greater recognition of the sector's contribution to both the country and to individual communities, and is working with Oxford academics to study SMEs' affect on local areas.
Around 57 per cent of all private-sector employment is estimated to be provided by small businesses, and around 40 per cent of small businesses now operate from private homes.
"At the human level, the economy is a kind of eco-system in which the participants, large or small, all interact with each other," said an FSB spokesperson.
"Therefore this study will not only benefit small businesses but all businesses and the communities they serve."
