Report shows rural businesses more profitable than urban
22nd Jun 2017
New analysis of rural firms in the English regions shows rural businesses to be significantly more likely to be profitable than businesses in urban areas. The report published by the Centre for Rural Economy and Newcastle University Business School, entitled ‘Small Rural Firms in English Regions: Analysis and Key findings from UK Longitudinal Small Business Survey, 2015’ (March 2017).
The report states:
“England’s rural firms are significantly more likely to be profitable, but have lower annual £turnover, than businesses in urban areas outside of London. This finding emerges from our rural-urban analysis of 13,403 small firms in England, including 3,555 rural firms, interviewed for the UK Small Business Survey in 2015. It cannot be explained or attributed to oft-rehearsed differences between rural and urban economies, as the analysis controlled for differences in sectors, size, age and other business characteristics of rural and urban areas.
“Although rural and urban firms share many plans and expectations for future growth, rural firms were significantly stronger exporters of goods and services, were more likely to have introduced new or improved goods in their businesses, and were more able to secure external funds, especially for capital investments in machinery and buildings, than were businesses in urban England. “
“Nevertheless, there is also clear evidence of Untapped rural potential (for example, more rural firms have goods or services suitable for exporting than which currently export), Weaknesses (for example, rural firms are less likely to expect to grow their workforce) and Obstacles to business success, particularly Regulations or red tape, Staff recruitment and skills, and Taxes, rates and NI. that concern significantly more rural than urban firms.”
Professor Jeremy Phillipson said: “To achieve spatially-balanced and inclusive economic growth, we encourage central and local government agencies, Local Enterprise Partnerships and business support organisations to examine this evidence on rural businesses’ strengths, aspirations, and weaknesses in devising their economic strategies and plans.”