Divide between small firms in London and North will double by 2025
New survey sheds doubt on government's "Northern Powerhouse" plans with companies in the capital far more optimistic about future revenues
Despite the government’s “Northern Powerhouse” proposal to boost economic growth in the North, the divide between small businesses in London and the North is set to more than double over the next 10 years – according to new research by Everline.
The report found that small businesses in the capital are significantly more optimistic about their growth prospects and expect revenues to increase by an average of 44% by 2025– rising to £528,000 from £162,000.
In comparison, businesses in the North are expecting average growth of just 33%, or £263,000 from £65,000 over the same period while a fifth expect no increase at all.
Business leaders in the South (outside of London) are the most pessimistic about their future growth prospects, with a staggering 24% predicting zero turnover by 2025. On average, small businesses in this region only expect 33% growth, followed by growth predictions of 31% in the Midlands and 37% in Scotland.
By sector, businesses in media, marketing, PR and sales were the most confident about future propsects, predicting revenue to increase by over 45% by 2025.
Digital skills differences is thought to be a contributing factor to the growth gap between London and the North with 36% of small businesses in the North dedicating only a fraction of their financial resources to activities such as e-commerce, with no plans to increase online expenditure over the coming decade.
Russell Gould, chief operating officer of Everline, commented: “With the average turnover of small businesses in London already more than 80% higher than that of other regions, businesses in the capital look set to move further ahead of the rest of Britain.
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“This is particularly telling given the government’s commitment to devolving more powers to the regions and creating small business hubs outside of the capital. Although small business growth has increased dramatically in the last 10 years, it’s clear […] that more needs to be done to encourage a similar decade of growth and instill confidence in our small business network, especially outside of London.”