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London SMEs lead in digital support as regional gap widens

Thu, 10th Jul 2025

Research from e-Residency has found that small and medium-sized enterprises (SMEs) based outside London are not enjoying the same access to digital support and resources as those in the capital.

Survey data show that while 67% of London SMEs are using mentoring, accelerator programmes, and digital tools, almost three-quarters (74%) of SMEs in the North East, West Midlands, and South West have no involvement in such initiatives.

Digital access gap

The study, which surveyed business owners across the UK, reveals a marked disparity in both awareness and use of government digital support schemes. In London, 96% of SMEs are aware of national digital adoption initiatives, with 62% using affordable tools or software schemes. By contrast, only 60% of regional SMEs are aware of such support, and just 24% report actively using these tools.

Improved digital infrastructure is identified as a significant growth driver for businesses in the capital, with 67% of London SMEs saying changes like high-speed internet and access to remote workspaces have positively impacted their business. This figure drops to 37% among SMEs outside London.

Growth and ambition

The research found 78% of London SMEs view themselves as established or growing, compared to 62% of regional SMEs. Access to mentoring, networks, and digital accelerators is concentrated in London, and shows a correlation with confidence and business optimism.

When considering sources of funding for digital infrastructure, location factors heavily in the approach of London firms. According to the study, 82% of London respondents said that being based in a major city was important for attracting funding, compared to 44% in other regions. 80% of London SMEs cited proximity to investors and accelerators as crucial, whereas just 47% of regional SMEs shared this perspective.

Business sector focus also plays a role, with 71% of London SMEs seeing themselves in high-growth sectors, as opposed to 45% in other parts of the UK.

Outside London, firms prioritise local resources; 75% of regional SMEs place strong emphasis on local infrastructure as a support for funding, and 69% on access to skilled local workers.

Support and confidence

Access to funding remains uneven. The research shows that 44% of regional SMEs believe their funding access is adequate, in contrast to 60% of those in London. Only 15% of regional SMEs say their access to funding is "very adequate," half the rate (31%) reported by their London counterparts.

Business networks are another area of difference, with 60% of London SMEs stating they have strong business partnerships, compared with 48% in the regions. Just one-third of London SMEs describe their network as "very strong."

The prospect of expanding overseas is also uneven. Three out of four London SMEs (76%) report actively considering cross-border business structures or establishing operations abroad to access digital services, while only 29% of regional SMEs who are not planning the same.

Quote from e-Residency

"The challenge isn't just access to digital tools, it's visibility, confidence and connection," said Liina Vahtras, Managing Director of e-Residency. "Founders in every corner of the UK have the talent and ambition to scale, but the path to digital growth still feels clearer in London. That's where tools like e-Residency play a levelling role, helping businesses tap into global opportunities without relocating or compromising on where they want to build."

Methodology

The study involved 252 UK business owners, directors, and managers in SMEs, surveyed via an independent agency. The sample was structured to be nationally representative with respect to a range of demographic and business characteristics.

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