Aberdeen tops list for new work freelancers and SMEs

Monday 19 October 2015

When we think of hotspots for creative, digital small businesses and freelancers, many people’s minds will be drawn to well-known trend-setting districts such as Shoreditch in London or Manchester’s Northern Quarter.

However, a new report from the think tank Centre for Cities has suggested that the highest concentrations of so-called “new work” contractors and small to medium-sized enterprises (SMEs) are to be found in some rather more unexpected places.

The annual Small Business Outlook report revealed that Aberdeen was the top location for small companies and one-person enterprises in the creative, digital and professional sectors, followed by Reading and Cambridge. More populous cities such as London also made the top ten.

Cities with high levels of new work companies are also more likely to have high average wages and productivity across all sectors, suggesting these businesses are benefitting their wider communities as well as the people who work for them. Five of the cities in the top ten also were amongst the highest performers when it came to job creation.

Jason Eatock, head of SME at Zurich (which supported the research), said: “This report is a fascinating insight into the development of one of the most exciting and rapidly growing sectors for the UK. It describes how creative, or ‘new work’, SMEs are playing a huge part in the UK’s ever-changing business environment.

“But we must also pay attention to the report’s findings of economic disparity between UK regions, and continue to provide the support that SMEs need as they encounter new risks whilst they evolve and grow.”

Aberdeen’s popularity may come as something of a surprise, since the city has recently been hit by a decline in the North Sea drilling activities, which has translated into a slowdown for other sectors in the area that catered to the needs of rig workers and oil and gas contractors.

The growth of new work businesses and contractors outside of traditional centres such as London has prompted some to suggest that the government should consider expanding its existing devolution plans to ensure that as many areas as possible are able to take advantages

Commenting on the report’s findings, Centre for Cities’ chief executive Alexandra Jones said: “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 plan 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.”

“By doing so, cities can ensure they are in the strongest position to support the kinds of businesses which offer the best route to long-term growth and prosperity.”

The business rates devolution to which Ms Jones is referring will come into force by 2020.

By Victoria McDonnell

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