Two-thirds of London-based SMEs (67%) are actively using digital support programmes to help run their business – from mentoring to accelerator initiatives – compared to far fewer peers in regions like the North East, West Midlands, and South West. In fact, nearly three-quarters of regional SMEs (74%) report no involvement in these initiatives at all, highlighting a growing disparity in access and engagement.

The research lands as UK small businesses face mounting pressure from inflation and fast-changing customer expectations. While progress is underway, the uneven distribution of resources suggests that where a business is based often still defines what it can become.

Digital advantage is driving growth, but not evenly

SMEs with access to digital infrastructure and visible support are more likely to grow – and those conditions are far more common in London than elsewhere in the UK. In the capital, 78% of SMEs describe their business as established or growing, compared to 62% outside London – reflecting a broader imbalance in access to essential tools and systems.

Digital infrastructure plays a central role. Two-thirds of London SMEs (67%) say improvements like high-speed internet and remote work hubs have had a significant impact on growth – nearly double the 37% of regional SMEs who say the same.

The divide also extends to awareness and uptake of government-backed digital support. In London, 96% of SMEs are aware of national digital adoption initiatives, and 62% are actively using affordable digital tools or software schemes. Outside the capital, awareness of digital adoption support drops to 60%, and only 24% are currently making use of tools available.

Where you build shapes how you think about growth

Perceptions of what drives digital investment vary widely depending on where a business is based. When asked which factors help attract funding for digital infrastructure, London SMEs consistently prioritise location, visibility and access to networks:

• 82% say being in a major city is important for securing funding, compared to 44% of regional SMEs
• 80% of London firms highlight proximity to investors and accelerators as a key advantage, versus 47% elsewhere across the UK
• 71% believe operating in a high-growth or “hot” sector gives them an edge, compared to 45% of regional peers

Outside the capital, SMEs place more emphasis on practical enablers like local infrastructure and talent. For example, 75% of regional firms see strong infrastructure as important for securing funding, and 69% cite access to skilled talent. These findings suggest that London businesses are more likely to view their environment as a built-in asset, while many regional firms focus on making the most of what’s locally available.

Support gaps are holding SMEs back

Beneath the surface of digital adoption lies a broader support challenge – one that shapes how confident SMEs feel about their ability to grow. While digital infrastructure is essential, many founders also point to the importance of funding, talent and business networks.

44% of SMEs outside London say they have adequate access to funding, compared to 60% in the capital. Confidence in that access is even lower: just 15% of regional firms rate their access to funding as “very adequate,” half the rate seen in London (31%).

Access to networks also shows variation. In London, 60% of SMEs feel they have adequate access to business partnerships, with 33% describing it as very strong. That falls to 48% among regional founders, suggesting they may be building with fewer local touchpoints.

Some SMEs are now looking beyond the UK to fill these gaps. When asked about cross-border business structures – such as setting up operations abroad to access digital services – 76% of London SMEs say they’re considering it, compared to just 29% of regional firms who aren’t planning to explore the option. The data points to confidence among London businesses, while regional founders may be more focused on local challenges first.

“The challenge isn’t just access to digital tools, it’s visibility, confidence and connection,” said Liina Vahtras, Managing Director, e-Residency. “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. That’s where tools like e-Residency play a levelling role, helping businesses tap into global opportunities without relocating or compromising on where they want to build.”

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