Current enterprise policy is too generic to provide effective support to London’s smaller businesses. That is the conclusion of a new report published today by Centre for Cities in partnership with Workspace Group.
The research, Size Matters: The importance of small firms in London’s economy, focuses on the make-up of small businesses in London, currently UK’s most enterprising city, to highlight the increasing importance of those smaller firms that trade with other businesses. Nearly a fifth of the Capital’s smaller firms are business facing and the report highlights that this group of businesses has the greatest potential to make a major contribution to future jobs growth. The majority of these firms are located in London’s core and out to the west.
The number of small businesses in the UK’s cities has grown by 43 per cent since the year 2000, yet the report warns that small businesses in the capital are facing significant challenges. The success and expansion of London’s core, constraints on space and rising rents mean that there is a real danger that London’s small firms will no longer be able to access locations that provide vital links to other businesses and transport infrastructure. This could have consequences for the Capital’s future growth potential as smaller businesses may not be able to continue to grow at their current pace.
The report makes recommendations to address this issue. It calls on the GLA, London Boroughs and Government to work with businesses and representative bodies to enable small, business-facing, firms to continue to locate in London’s core and to the West near Heathrow. For example, this means ensuring that spare public sector property assets are used to provide space and services particularly in central local authorities to smaller firms on flexible and affordable terms.
The report also sets out how other measures should be used to support smaller firms, including targeting a portion of London’s ‘super-connected cities’ funding to deliver the digital infrastructure and IT services that small businesses need to succeed in central London and its fringes.
Alexandra Jones, Chief Executive of Centre for Cities said:
“Our research shows that many of London’s small firms make a vital contribution to the Capital’s economy. To maximise the potential of these businesses to grow, and to ensure the Capital continues to create jobs at the rate we need, London’s politicians, officers and business leaders must ensure that policies are in place to encourage and support these firms to locate where they can benefit from access to existing markets.”
Workspace Group, a company that provides business premises to around 4,000 businesses, supported the Centre for Cities on the publication of the report. Jamie Hopkins, Chief Executive of Workspace said:
“The small business sector is a very large market, within the SME sector are the fastest growing companies within the economy. It is these firms which are the major contributors to the London economy. At Workspace, we are right at the heart of this supporting a large number of those in the fastest growing and largest sector in London’s economy.
“It is these businesses that should be the focus of government policy. Local authorities have an important role to play but they must be realistic about what they can achieve alone; public-private partnerships are critical to delivering business growth and local regeneration.”