Reading is a magnet for innovative businesses says new report
15th September 2023
A new report, ‘Innovation hotspots, Clustering the New Economy’, by thinktank Centre for Cities, identifies ‘hotspots’ of promising cutting-edge business activity across the country with Reading ranking 2nd in the UK as a location favoured by innovation-based companies.
Reading had the second highest number of New Economy Firms (NEF) per 10,000 population, only ranking behind Cambridge and outperforming London and all the UK’s major cities, creating a powerful cluster of dynamic businesses locally.
Clustering occurs, the report states, because there are benefits to co-location – especially among complex, knowledge-intensive activities – which come from related firms sharing infrastructure and access to workers. Co-location also allows the development of robust supply chains and knowledge spill-over effects rooted in the exchange of knowledge within and between firms.
The long-standing attractions of Reading as a place to locate a business have been instrumental in evolving clusters of innovative businesses across a number of sectors, according to the report: Reading’s location and excellent transport connectivity; highly-skilled workforce; a long-standing investment in Reading of large high-technology employers; the impact of the research-intensive University of Reading in attracting ideas and talent to Reading; these all play a part in establishing Reading as one of the places to establish a new innovative business.
While NEFs account for a small share of the overall UK economy, firms in hotspots punch above their weight, say the report authors. The report assesses that, together, clustered NEFs are worth around 1 per cent of national output and 200,000 jobs, despite accounting for 0.6 per cent of businesses and 0.1 per cent of land.
The report also assesses that hotspots are almost always melting pots of different sectors with the impact of place and the benefits that places offer to businesses being a key driving force in location decisions by businesses. Reading’s economy reflects that narrative with innovation in sectors ranging from cloud security to pharmaceuticals, energy to finance, retail to communications.
Nigel Horton-Baker, Chief Executive of REDA, said: “Reading, with its strong knowledge-based economic base and global University presence, is a magnet for innovative businesses. The access to a deep pool of skilled workers and an established network of knowledge-based businesses in a brilliantly-connected business location is what makes Reading so attractive.
“New smaller firms have followed the larger players to take advantage of the local skilled workforce and networking, creating clusters of innovative businesses in many sectors from IT and digital tech to finance and bio-pharma in Reading. The role of the University of Reading and its Thames Valley Science Park will help drive the next phase of this business clustering with new clusters developing in the film sector around Shinfield Studios and the museum and academic sectors, with the relocation of parts of the British Museum, Natural History Museum and Kew Gardens to the Science Park.”
While Reading is a relatively small business location in geographical terms compared to the UK’s biggest cities, its proximity to London and Heathrow and excellent transport connections makes it effectively larger and more successful than its resident population size would suggest.
Nigel Horton-Baker concluded: “As with our cluster economy, Reading punches above its weight nationally and this is a great opportunity for Reading moving forward towards our 2050 Vision to build on our undoubted reputation as an’ Innovation Hotspot’ to attract even more new cutting-edge business activity from across the country and the world to share in Reading’s economic success.”
The full report can be read at Innovation-hotspots-September-2023.pdf
