The UK’s efforts to level up its economy are under renewed scrutiny as a growing digital divide emerges between small businesses in London and those across the rest of the country.
According to new research released today by e-Residency, nearly three-quarters (74%) of SMEs outside the capital report having no access to digital support programmes such as mentoring or accelerators – compared to 67% of London-based SMEs actively using them.
The findings point to a widening opportunity gap driven by disparities in digital infrastructure, awareness of support schemes, and proximity to investment and business networks. While two-thirds of London SMEs say access to high-speed internet and remote working hubs has significantly boosted their growth, only 37% of regional SMEs report the same benefits.
The imbalance is also reflected in business confidence and growth trajectories. In the capital, 78% of SMEs describe their company as established or growing. That figure drops to 62% for those operating outside of London. The difference in digital engagement is stark: 96% of London SMEs are aware of national digital support schemes, with 62% using them. Outside London, awareness falls to 60%, with only 24% using available tools or software.
The research also sheds light on how location shapes strategic thinking. In London, the majority of SMEs cite their geographic location and access to investors as central to digital investment success – with 82% saying being in a major city helps attract funding. Only 44% of regional SMEs agree. Regional firms, by contrast, place greater importance on access to local infrastructure and talent pools.
Funding confidence mirrors this trend. Just 15% of regional SMEs rate their access to funding as “very adequate”, compared to 31% of London firms. Similarly, 60% of London SMEs report strong access to business partnerships, against 48% for regional founders.
With domestic resources limited, many London-based entrepreneurs are now exploring international opportunities to support their digital growth. Three in four (76%) say they are considering cross-border business structures to access better digital services and infrastructure, compared to just 29% of regional SMEs.
Liina Vahtras, Managing Director at e-Residency, said the research highlights the need for more inclusive digital support across the UK.
“Founders in every corner of the UK have the talent and ambition to scale, but the path to digital growth still feels clearer in London,” she said. “This isn’t just about internet speed or software – it’s about confidence, networks and visibility. That’s where tools like e-Residency can help level the playing field, enabling businesses to grow globally without leaving the communities they’re rooted in.”
The findings come at a critical time for small businesses already grappling with inflation, skills shortages and shifting customer expectations – reinforcing calls for targeted regional investment to close the digital opportunity gap.
Read more:
Digital divide widens as 74% of regional SMEs miss out on vital support