Frontier Economics has completed a new study examining the impact of digital microbusinesses on local economic outcomes in the UK.

Building on findings from our 2023 report, The Impact of Digital Microbusinesses on Local Economic Outcomes in the UK, this research uses updated data from GoDaddy’s Venture Forward initiative to address critical gaps in understanding digital microbusiness density and its effects on local economies. The study applies advanced modelling techniques, including panel regression and random forest analysis, to explore key economic indicators.
Our latest study strengthens the evidence base, showing a strong positive association between digital microbusiness density and local economic performance. 

Key findings from our report include:

• Jobs density: There is a strong statistical association between microbusiness density and prediction of jobs density. Each additional digital microbusiness per resident is linked to an increase of 5 jobs per resident.
• Median annual pay: There is a strong correlation between microbusiness density and median annual pay. A 10% rise in digital microbusiness density is associated with a £320 increase in annual pay for full-time workers.
• Microbusiness density: Our random forest analysis highlights there is a strong correlation between microbusiness density and higher GPD.

Some of the key highlights from GoDaddy Venture Forward 2024 report (UK) include: 

• Size of microbusinesses: 84% of Microbusinesses in the UK have fewer than 10 employees.
• Serial entrepreneurs: 1 in 3 entrepreneurs own more than one business.
• Closing the gender gap: 37% of Microbusinesses are women-owned.

From our study, it is clear that digital microbusinesses help to drive local economic growth, showing strong associations with job creation, higher pay, and economic activity. While no causal links were established, future research should expand data, explore long-term trends, and examine broader dimensions to deepen our understanding of their impact.

You can read our full study here.