Brighter business / Business clusters – what are they and how can they help small businesses?

Business clusters – what are they and how can they help small businesses?

28th June 2018

Small businesses may be missing a trick by not choosing to start their empires in business clusters, so says brand new research from Opus Energy.

A survey of 500 business owners found that the majority of small business owners took no time at all to decide where to start up their business – with two-fifths (40 per cent) choosing the most convenient location for them and over half (51 per cent) choosing the same place where they lived.

So are we missing out by not being based in a business cluster..?

What are business clusters?

Business clusters are a concentration of interconnected businesses, suppliers and institutions in a particular field. Think Silicon Valley in the US – like-minded companies gravitate together thanks to shared needs, and as a result, greater revenue gets poured into the local area with skilled workers coming together to drive expertise and innovate culture.

They’re a part of the UK’s history: our industrial past saw places like Nottingham become renowned for their lace-makers, or the legacy of Northampton and its shoemakers. Fast-forward to modern day and we have Hull, leaders in offshore wind, and Dundee, a centre of gaming innovation.

What are the benefits of business clusters?


The value of networking can never be underestimated – having peers on hand to review suppliers, give insight into industry trends and see where a partnership might be mutually beneficial is something that even the world of digital communication can’t fully replicate. These are all benefits that can save time and effort for your business in the long run.


Growth is important for many small businesses, but no more so than start-ups, for whom winning new business is imperative. Many businesses have succeeded by bring their proximity closer together – take the Toyota model, where suppliers cluster around the company’s factories, or cities where science hubs spring up near major universities.


Finally, hubs of innovation draw in skilled workers like magnets. Start-ups need to recruit wisely in early days, as poor hiring can be incredibly costly – both in terms of finances and time resources. Bringing your company to the bright and skilled workers instead of trying to entice them to come to you might be all you need to get a competitive edge in the crowded race to the top.

Is there a business cluster near me?

Almost definitely!

Visit our interactive Business Clusters map to see which industry clusters are thriving in your area, suss out the competition and research the best place to start a start-up.

Business clusters – what are they and how can they help small businesses? - ody Image