UK knowledge economy booms as new businesses appear at four times quicker than average

Sector that included fintech and aerospace outstripping wider business growth at fastest rate seen, says report by professional services firm Procorre.

The speed at which new businesses are cropping up from the knowledge economy is now four times higher than the average across all other sectors, according to research by professional services firm Procorre.

The figures suggest the number of knowledge economy businesses has jumped from 225,000 to 266,400 in the past five years – an increase of 18.4%.

Across the same period the total number of businesses in the UK has increased from 2,341,900 to 2,448,700 – only a 4.6% growth rate.

The knowledge economy is based on intellectual capital, and includes sectors such a pharmaceuticals, FinTech, film and TV production and aerospace.

It excludes sectors that are more dependent on physical inputs such as agriculture, more basic manufacturing and hospitality, among others.

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Wiktor Podgorski, relationship manager at Procorre, stressed the importance of the knowledge economy as it “includes many of the most strategically important and potentially higher margin businesses, so it is important that we are seeing this growth”.

“The government has played a successful and very helpful role in stimulating the knowledge based economy by granting relatively generous R&D tax credits,” he continued.

“This has kept the necessary investment in product development relatively strong – although we still lag behind some of our European peers on this measure.

“The knowledge based economy is seen as creating much higher quality and better paid jobs than other sectors so growth in this sector does bring concrete benefits for the UK.”

But he warned the businesses from the much-hailed sector that they could not rest on their laurels and “cannot be complacent about the threat to their business from new entrants”.

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Praseeda Nair

Kellen Rempel

Praseeda was Editor for GrowthBusiness.co.uk from 2016 to 2018.

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