Tech firms to lead fightback from pandemic as London ‘will emerge strongest part of UK’

London's powerhouse economy is set to emerge from the lockdown in stronger shape than other regions of the country, a report claims today.

The capital is home to a higher proportion of companies — mainly in the tech sector — that will have flourished during the pandemic than any other part of the UK, it says.

Analysis from consultancy Beauhurst, which has been used to help shape government policy, shows that 17 per cent of the London businesses surveyed will be “potentially positively impacted”.

Companies seen as benefiting include those involved in online voice and video communication, and delivering education and health over the internet, known respectively as EdTech and eHealth. London has the highest proportion of firms in these sectors. The South-west, Wales and Scotland have the lowest and are most vulnerable.

The report adds: “A drop in footfall endangers less technology-driven sectors. Most notably, the leisure and entertainment industry is massively under threat, with 20 per cent of companies severely impacted and 34 per cent critically impacted. Other traditional sectors, including retail and industrials, are far more likely to be moderately impacted. The survival of these companies will heavily depend on the length of time that lockdown measures remain in place.”

Analysts at Beauhurst looked at more than 28,000 fast-growing companies around the UK. It ranked the impact of the lockdown on them from “potentially positive” to “permanent closure”.

It found that 615,000 jobs in start-up and fast-growing companies are at “severe” or “critical” risk, about 22 per cent of the total. Just over half of all high-growth companies are in an “at risk” category, and 17 per cent in the severe or critical categories

Beauhurst’s Henry Whorwood said: “These firms will be integral to the UK’s productivity as we enter recovery, so it’s crucial interventions proposed by the Government reach these companies.”