City centres see the largest clustering of economic activity. Despite accounting for just 0.08 per cent of land, they were home to 8 per cent of businesses and 14 per cent of jobs in 2015. And despite their much smaller land area, they had 40 per cent more jobs than the rural economy.
This clustering is most acute for services-exporting firms:
- 11 per cent of these businesses are located in city centres, increasing to 25 per cent for employment.
- This is especially the case for high-skilled jobs in services exporters – we estimate that 32 per cent of Britain’s high-skilled jobs were located in city centres.
Businesses in cities, on average, are larger than elsewhere. Services exporters and local services businesses are largest in city centres, while goods exporters are largest in the suburbs of cities.
Foreign-owned businesses show an even greater preference for an urban location:
- 30 per cent of foreign-owned services-exporting firms were based in city centres in 2015, compared to 11 per cent for all businesses in this sector.
- Meanwhile foreign-owned goods exporters tended to prefer a suburban location – 40 per cent were based in suburbs in 2015, compared to 28 per cent of all businesses in this sector.