Business parks offer some benefits to certain types of new economic activity, but those in the suburbs of cities are more popular than those located in more remote locations.
Business and science parks were a particularly popular policy tool in the 1990s and 2000s -with Regional Development Agencies in particular being fans of them -but there’s been very little analysis of the types of firms such parks attract. Our At the Frontier report shows that as a group, business parks are popular among cutting edge businesses in the new economy, but this depends on both the types of new economic activity and the location of the park.
Let’s first deal with location. While not as popular as city centres, business parks in the suburbs of cities serve as clusters of the new economy. They account for 0.5 per cent of all land in England and Wales, but 4.4 per cent of UK businesses and 6.2 per cent of all new economy firms. However, their popularity drops off the further the parks are from urban areas. Figure 1 shows that those in hinterlands are less attractive than suburban ones – they account for a greater share of land but a lower share of new economy firms. That said, they do still have a higher share of new economy firms than businesses overall, suggesting they are disproportionately attractive to this part of the economy. This is not the case for parks in deep rural areas, which are home to a tiny fraction of new economy businesses.
Source: The Data City; Census (2011); ONS (2021). Park-related areas based on 2011 workplace-based area classification from the ONS. It includes business parks, industrial units, science and business parks or regional businesses centres.
If we look at the nature of activity, we can see that these parks are particularly attractive to non-services new economy businesses. For instance, around 15 per cent of all firms specialising in sensors and advanced materials are based in these locations (Figure 2), compared to less than 6.5 per cent of companies in digital creative industries and omics (life sciences that include genomics and metabolomics) which tend to cluster in city centres. Within business parks in deep rural areas, energy management firms are the most prevalent new economy industry, but these places accommodate just 0.7 per cent of the whole sector (in total 11 per cent are on business parks).
Source: The Data City; Census (2011); ONS (2021). Park-related areas based on 2011 workplace-based area classification from the ONS. It includes business parks, industrial units, science and business parks or regional businesses centres.
These patterns result from the benefits that business parks in different locations offer. Suburban parks are likely to be much more popular than deep rural ones because they offer access to much larger pools of workers to employ from. They also appeal to companies in sensors and advanced materials much more than digital creative industries because the nature of what they do means that face-to-face interactions with other firms – a benefit offered by city centres – is less important for their business (indeed, if they are working on a product that they ultimately want to patent then sharing information with other companies would actually be harmful for their business).
This suggests that business parks play a complementary role to city centres in attracting and growing the new economy in cities. However, they are a much less effective policy tool outside of urban areas. Both local and national government should reflect on this in any future decisions to fund the further creation of business and science parks.
This analysis is based on our latest report At the frontier: The geography of the UK’s new economy which you can read via the link below.
This report maps out the current geography of the new economy and calls for the creation of a £14.5 billion growth package to build innovation districts in Birmingham, Glasgow and Manchester.
This latest podcast episode unpacks the findings of our latest report published with HSBC UK which maps out the current geography of the new economy.
Centre for Cities calls on Government to invest £14.5bn to build city innovation zones in Birmingham, Glasgow, and Manchester in order to kickstart the new economy.
The UK’s new economy clusters in cities in the Greater South East with Cambridge, Reading and Milton Keynes leading the pack.
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