The Creation, Location and Growth of Small Business Service Firms in the United Kingdom

Since 1980 the United Kingdom has experienced very rapid growth in firms and employment in information-intensive business services. This paper documents the scale, nature and geography of this growth, with particular reference to small and new firms in management consultancy and market research. Business service growth has contributed powerfully to the UK's North-South divide, being focused on London and the outer South East. The findings of a detailed survey of small business service firms suggest that such firms are important for national and regional economic growth. The growth of small firms reflects a variety of forces rather than any single factor, but is centred on increased demand for specialised expertise and information. Entrepreneurs setting up new small firms are predominantly motivated by the perceived benefits of independence and financial gain.