New Wealth Gap Opens as Urban Small Firms Outpace Rural Rivals
Philip Thornton Economics Correspondent, The Independent (London, England)
THE politically-charged debate over the economic North-South divide conceals a wider gulf between business fortunes in urban and rural areas, according to new research.
The startling surge in activity among rural small and medium- sized enterprises (SME) that was central to the 1980s economy, has collapsed in the last decade.
Research by Cambridge University shows that differences in economic performance within the UK are more complex than a simple North-South split.
The conclusions will please the Government which has said there are areas of poverty and deprivation in the South and zones of economic success in the Midlands and the North.
David Keeble, of the university's Centre for Business Research, found there was no growth in employment by SMEs in rural areas between 1997 and 1999. Over the same period 1 million extra people found work in the wider economy.
In contrast the number employed in large towns between 1997 and 1999 rose 7.9 per cent, by 6.9 per cent in small towns and by 2.2 per cent in major cities. Growth rates were even stronger between 1994 and 1997. Dr Keeble said this was because the rural SME group contained a significantly higher proportion of declining or static enterprises compared with SMEs in large towns.
"The long-standing urban-rural shift of SME activity and employment in Britain appears to have ended in the second half of the 1990s," Dr Keeble said. …