Two-speed business support in the West of England

The West of England economy is renowned for its strengths in aerospace and professional services, with large firms often playing an important anchoring role. However, there is also a high concentration of small- and medium-sized enterprises (SMEs) that compete through specialisation across the region’s high-value sectors, as shown in our article: ‘What makes the West of England economy distinctive?’.

These SMEs are key to unlocking growth in the region, but they often depend on support from the wider business ecosystem, including accountants, investors, lawyers, advisers and mentors (OECD, 2021; British Business Bank, 2025: 19). This article therefore looks at how these ecosystems operate across the West of England and where businesses still face barriers.

Our findings are based on interviews with stakeholders and organisations that provide business support across the region, working with firms at different stages of development and across a range of sectors. We are not trying to prove that particular regional conditions directly cause businesses to succeed or fail. Instead, we look at the support that businesses need in the West of England, how they find it and where gaps or barriers remain.

Why does business support matter?

It is important to first consider why support is crucial for the firms that make up the region’s business environment. As one leader of a business incubator supporting the everyday economy explained:

for the smaller [businesses], they don't have huge resources at their fingertips, so they're reliant on experts to fill in some of the gaps, because you have to be a jack of all trades when you've got a small business… you need to be doing what you're good at, what you've set your business up to do, rather than trying to reinvent the wheel on things like HR or bookkeeping and accounting. A lot of the help and advice and training and grants that are available are really crucial to small businesses.

The day-to-day administrative requirements of starting and growing a business can create simple but important barriers. Although these are rarely discussed alongside innovation, the ways firms manage them can either enable or constrain the entrepreneurial activity needed to achieve growth. Business support therefore provides complementary infrastructure that allows firms to focus on their areas of expertise and devote more time to commercial development.

Within the everyday economy – the wide range of businesses that provide essential goods and services to local communities – publicly funded measures such as advice, training and grants can help small and new firms bridge the gap between founders’ sector-specific knowledge and the broader managerial and commercial capabilities needed to run a business (ERC, 2024). However, public support is only part of the picture. An innovation support worker at a deep-tech business development company noted that dense entrepreneurial clusters can also create favourable conditions for commercial business services to develop:

you're surrounded by professional services like lawyers and accountants and insurance people who are used to working [with] what you're doing. So it has its own support system [that] builds up because it's worth the time for these professionals to come in and provide some pro bono work with the hope that it builds up higher in some way.

In dense business populations in areas such as Bristol, South Gloucestershire and Bath, the needs of new and fast-growing firms create markets for specialist advisers. These advisers can then become part of the cluster itself, contributing to the commonly observed process of ‘agglomeration’, in which economic density attracts further firms and services to the area (Nathan and Overman, 2013). However, these benefits are not felt equally across the region.

A two-speed support ecosystem

Some sectors have greater accessibility to business support than others. Interviewees identified the technology clusters in Bristol and Bath as particular beneficiaries. As a banking and relationship manager specialising in technology sectors explained:

the technology and digital and probably creative industries you'd put into that as well — the startup and the scale up sort of ecosystem, so firms, professional services, academia, and public sector to an extent are fully formed, and everyone within that ecosystem kind of would know each other, broadly. If I was to map that across to a sector agnostic sort of startup or scale-up style comparison, I don't think it would be the same… that ecosystem effect is fragmented, and you get pockets of expertise

The issue is not that businesses outside these clusters have no support. The problem is that it can take longer to find the right people and organisations. This creates a ‘two-speed ecosystem’.

For businesses in the region’s established technology clusters, the connections are already there. A new business may quickly be introduced to an investor, accountant, lawyer or potential partner because these relationships already exist. This enables new entrepreneurs to move more rapidly from early stages of conceptualisation to commercial growth. For businesses in other sectors, those connections may be more fragmented. They may have to spend more time working out who can help them and how to access that support.

Beyond the direct claims of these participants, the same divide is suggested by the differences of their observations relative to their own specialisms. In the everyday economy our interviewee saw publicly funded support such as training and grants as crucial, whereas our respondent in a deep-tech environment observed the trend of agglomerating private sector services.

Finance is part of the picture

Access to finance, and the type of finance being accessed, helps to explain why support ecosystems develop unevenly across sectors.

In 2024, 46% of businesses across the South West used external finance, slightly above the UK average. However, a large proportion of this is debt financing, and venture capital and growth equity remains heavily concentrated in London and the South East. In the South West, deals fell by 11.5% in 2024, while the total value of deals fell by 17.2%, to £314 million (British Business Bank, 2025).

This can create an advantage for established technology clusters. Technology businesses, particularly software businesses, are more likely to fit the investment models used by venture capital firms. As one financial support professional explained:

There's a huge tech bias within investment for software... I don't think it's particularly a bias against the [creative] sector, but more a bias against businesses that aren't directly tech-centred.

This reinforces the notion of a ‘two-speed ecosystem’ as firms within established technology clusters can draw on both strong local networks and investment. Still, this does not mean that investors are deliberately excluding other sectors.

Why speed matters

Although support services are not wholly inaccessible to other sectors, the networks and relative ease of accessing investment in the technology sector can make a noticeable difference to how quickly a new business can get help. One deep-tech innovation support worker described the situation in this way:

So you can meet almost everybody you need to meet within that ecosystem quite quickly… and for startups, speed is quite important. So if I walked in tomorrow as a fintech, sooner or later you'll meet all the right people you need to… you could do that within a couple of weeks.

Several interviewees made a similar point: having support available is not enough. Businesses also need to be able to find it quickly.

This is particularly important for small and early-stage businesses as some entrepreneurs have gaps in their knowledge of general business requirements. They also often operate under tight financial conditions and cannot afford to spend a long time searching for advice, finance or specialist expertise. Delays in accessing advice and finance that enable fast decision-making can therefore significantly impact firm survival (OECD, 2021).

Businesses in less visible sectors can face a difference experience. An SME support professional working with manufacturing businesses explained that much of their role involves simply helping businesses discover what support is available:

I think the opportunities are there and the infrastructure is there. I find that our team have to do a lot of signposting to businesses, and some that are really well established… we have to do quite a lot of that signposting, and there's quite a lot of: “Oh, we didn't know that existed, that support existed”. I think it's there. I think people or businesses around the region don't necessarily know that it's there though.

Conclusion: What does this mean for the West of England?

The region has strong business support networks, particularly around its established technology and creative sectors. These networks bring together businesses, investors, professional advisers and other organisations, helping firms find the expertise and finance they need quickly.

However, our interviews suggest that this support ecosystem operates at two speeds. Technology-oriented firms can often navigate a well-connected network of professional services, investment and growth support. Firms in other sectors may face a more fragmented system, even where support formally exists. They can spend more time finding the right advice, understanding what support is available and making the connections they need.

There is also a difference in where this support comes from. High-value businesses in established technology clusters can attract private-sector investment in their development, including specialist advice, mentoring and sometimes pro bono support. Businesses in less developed clusters are more likely to rely on publicly funded organisations to identify and signpost the support that already exists.

This risks reinforcing the divide. Businesses in established clusters can benefit from a dynamic environment in which support is readily available, while businesses elsewhere can become more dependent on public services to navigate a fragmented network. Over time, this could make it harder for businesses outside the region’s strongest clusters to develop the networks they need to grow.

Where access to specialist advisers is limited, policymakers should therefore consider how to encourage more private-sector professional services to engage with businesses in emerging or under-represented sectors. Measures such as accredited recognition through social value frameworks or matched funding reduce the costs and risks for professional services firms of providing support. This could help expand access to legal advice, mentoring, professional networks and pro bono support.

The aim should not be to recreate the technology ecosystem everywhere. Rather, it should be to make it easier for businesses outside the strongest clusters to access the expertise and networks they need. Improving these connections could reduce the time it takes for entrepreneurs to find the right support and help more businesses overcome barriers to development.

However, there is an important caveat to consider. Not every business wants or needs to become a high-growth business. The contribution of smaller businesses extends beyond productivity and growth. As one leader of a business incubator supporting the everyday economy observed:

Productivity is obviously important, but I think businesses who are feeding their families and putting food on the table and actually are living a good and happy life is just as important... don't forget the 97% of businesses that just are running a shop, they are important in the supply chain. They're buying goods, they are employing people, they're spending locally. That local spend is really important.

Policymakers should recognise the wider economic and social contribution of businesses that operate successfully at a smaller scale. Frameworks for growth should not aim to turn every micro-enterprise into a growth firm, but to ensure that businesses with the potential and ambition to grow are not held back by barriers that can be addressed through better access to advice, finance and networks.

References

British Business Bank. (2025). ‘Nations and Regions Tracker’. Available online at: https://www.british-business-bank.co.uk/about/research-and-publications/nations-and-regions-tracker-2025

Enterprise Research Centre [ERC]. (2024). ‘The State of Small Business Britain 2024: Rising to the challenge’. Available online at: https://www.enterpriseresearch.ac.uk/wp-content/uploads/2025/03/The-State-of-Small-Business-Britain-2024-Final-1.pdf

Nathan, M. and Overman, H. (2013). ‘Agglomeration, Clusters, and Industrial Policy’, Oxford Review of Economic Policy. 29(2), 383–404. Available online at: https://academic.oup.com/oxrep/article-abstract/29/2/383/523704

Organisation for Economic Co-operation and Development [OECD]. (2021). ‘Business advice for entrepreneurship and small firms’. OECD SME and Entrepreneurship Papers No. 23. Available online at: https://www.oecd.org/en/publications/business-advice-for-entrepreneurship-and-small-firms_299705ad-en.html

Disclaimer: Futures West, a partner organisation of the Brunel Centre, is affiliated with Business West – a company that among other services provides business support in the region. To limit organisational bias, representatives of Business West were not interviewed for this research.