Small businesses in the creative and digital industries are an increasingly crucial part of the economy in the UK’s major cities, a new report has revealed.
The research, carried out by the Centre for Cities think tank, found that these companies play a key role in driving jobs growth and productivity.
While the importance of small businesses generally is common knowledge, this survey is among the first to look specifically at the so-called “new work” SMEs.
The Small Business Outlook 2015 report confirmed that the growth of these industries is outstripping traditional sectors, such as manufacturing and construction.
Alexandra Jones, chief executive of Centre for Cities, said the importance of SMEs should not be understated and it was important that politicians recognised their role in the wider economy.
“In recent decades, small innovative firms, taking advantage of technological advances, have started to play an increasingly important role in driving jobs growth, wages and productivity in UK cities,” she said.
“The Government needs to give cities greater control over skills, infrastructure and spending, to help them become more responsive to the needs of local businesses.
“The Government’s plan to let local government keep business rates is a welcome step towards giving cities more of the tools and flexibility they need to support local businesses. Local leaders should use these powers to create a better environment for innovative firms to thrive in, especially in places which have seen slow growth.”
Among the cities where “new work” firms are flourishing are London, Oxford, Reading and Cambridge. Although the statistics suggest that many of these industries remain concentrated in the South East and more should be done to encourage firms in other parts of the country.