Digital division expands as 74% of regional SMEs missed important support
The UK’s efforts to boost the economy are under scrutiny as there is an increasing digital divide between small businesses in London and small businesses in other parts of the country.
Nearly three-quarters of small and medium-sized businesses outside the capital report (74%) have no access to digital support plans, such as guidance or accelerators – according to a new study released today by e-residents – and by contrast, 67% of London-based small and medium-sized businesses will actively use them.
The findings show that the opportunity gap widens due to digital infrastructure differences, awareness of support programs, and differences in proximity to investment and business networks. While two-thirds of London’s SMEs say access to high-speed internet and remote work hubs significantly improves their growth, only 37% of regions reported the same benefits.
Imbalance is also reflected in business confidence and growth trajectory. In the capital, 78% of SMEs describe their companies as being established or growing. For those outside London, that number dropped to 62%. The difference in digital participation is obvious: 96% of London SMEs are aware of national digital support programs, and 62% use them. Outside London, awareness dropped to 60%, and only 24% used tools or software available.
The study also sheds light on how position shapes strategic thinking. In London, most SMEs place their geographical location and access to investors at the heart of digital investment success – 82% of whom say it helps attract money in a major city. Only 44% of regional SMEs agreed. By contrast, regional companies place more emphasis on access to local infrastructure and talent pools.
Funding confidence reflects this trend. Only 15% of regional SMEs see their access to funding as “very suitable”, while London companies have 31%. Similarly, 60% of London SMEs reported strong opportunities with business partnerships, while 48% of regional founders.
With limited domestic resources, many London-based entrepreneurs are now exploring international opportunities to support their digital growth. Three-quarters (76%) said they are considering cross-border business structures to access better digital services and infrastructure, while only 29% of regional SMEs.
Liina Vahtras, managing director of e-residents, said the study highlights the need for more inclusive digital support in the UK.
“Founders in every corner of the UK have talent and ambitions of scale, but in London, the path to digital growth remains clearer,” she said. “This involves not only internet speed or software, but also confidence, networking and visibility. It’s a tool like electronic dwelling that can help the competitive environment, enabling businesses to grow globally without leaving the communities in which they are rooted.”
These findings are at critical moments, for small businesses that have struggled to cope with inflation, skills shortages and client expectations, strengthened calls for targeted regional investments to close the digital opportunity gap.
