The Competitiveness of Business Services and Regional Development: Evidence from Scotland and the South East of England

This paper presents a matched-pairs analysis of the competitive performance of business service companies in Scotland and the South East of England. Value added per person is one-quarter higher in the English firms and a significantly higher proportion of them (49 per cent) have introduced a new service during the previous five years compared with 34 per cent of Scottish businesses. The latter were also more likely to function as multi-service companies reflecting the greater demand in Scotland for a more generalised service offering. The English service businesses also achieved a much greater degree of export orientation. The paper reviews various supply- and demand-side causes of the performance differences and the implications of potential policy responses are considered.