A new report has shown that British cities have the highest density of ‘new work’ businesses in the creative, digital and professional sectors. These cosmopolitan destinations are among the absolute best for new start-ups and growing micro-enterprises which are in turn proving mutually beneficial for the cities’ respective economies.

What are new workbusinesses?

New work businesses comprise of small and medium-sized enterprises that are both innovative and highly skilled, and are typically found in the digital, creative and professional industries. While digital and professional sectors in Londonmodest in size and in the infancy of their development, these companies are packing a massive punch when it comes to important factors that influence the economy such as productivity, employment and pay. Small businesses are proving to be more and more vital in the ongoing economic recovery so it’s essential that ‘new work’ is nurtured.

Centre for Cities Small Business Outlook 2015 report

Leading think-tank, Centre for Cities released its 2015 Small Business Outlook report at the end of October and revealed that the ten UK cities with the most new work SMEs are also among those with the most successful productivity, job growth and pay. While things are looking bright across the board, there are a number of cities that have proved particularly instrumental in the cultivation of these ‘new work’ businesses.

The report, which analysed 64 cities across the UK, found that those which ranked highly on productivity, pay and employment has the biggest population of new work firms, i.e. those in the digital, creative and professional sectors. Oxford, Cambridge, Reading and London were among the most prolific, with the capital accounting for 29% of all new work businesses and being home to 30% of all digital SMEs in the country. Reading had the highest proportion of small technology and digital firms, and turned out to be the destination with the 7th highest proportion of graduate inhabitants.

According to Centre for Cities’ research, these new work enterprises seem to be cunningly positioning themselves geographically in destinations which grant them access to large talent pools. For example, cities with a high concentration of digital, creative and professional SMEs were also found to have prestigious universities, and the companies are working closely with these academic institutions.

The government should be prioritising new work

Chief executive of Centre for Cities, Alexandra Jones said: “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.

“For places to prosper and grow, they need to consider how they can build on their existing strengths to support the kinds of highly-skilled and agile firms found in creative and professional industries, as well as the traditional focus on attracting inward investment from big business and multinationals.”

She added: “Helping theses firms to grow should also be a top priority for the government in its efforts to rebalance the national economy, including the Northern Powerhouse initiative. Most importantly, 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 plans to let local governments 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.”

Jones then goes on to site an improvement in the digital infrastructure, a better tackling of skills-gaps within the workforce and increased support for those businesses wanting to trade internationally as ways in which this could be done. This would mean cities could make sure that they are in the best possible position to support the businesses which are offering the most effective routes to their long-term prosperity and growth.