Business Services in the UK

This chapter examines business services’ impressive recent record in raising its share of value added and employment in the UK. It considers the sector’s productivity performance, including how business services can have a positive impact on the productivity of the wider economy through the services they provide. It also considers the contribution business service firms are making to UK manufacturing and concludes with a discussion of the level of concentration in these sectors.

All industries in this table are grouped within 2 digit divisions in the Standard Industrial Classification (SIC), and where possible industries are further broken down to a 3 or 4 digit level. Different SIC groupings are quite varied in size by definition, and direct comparisons may at times have limitations. Some groupings within the business services sector are more homogenous than others. The industries contained in the 74 group, ‘other business activities’, are the most diverse. They include a number of well-known professional services (legal and accounting) alongside industrial cleaning and labour recruitment. The 74 category also contains a group entitled ‘miscellaneous business activities’, which in turn has a further category entitled ‘other business activities’ (SIC 74.87). This category includes many important businesses including speciality design activities, conference organisation and brokerage activities and it alone has a GVA of over £15 billion.

Five industry groupings within the sector each generated more than £15 billion in GVA in 2004 – other software consultancy and supply (SIC 72.22), legal (SIC 74.11), architectural and engineering activities (SIC 74.2), labour recruitment (SIC 74.5), and within the miscellaneous group ‘other business activities’ (SIC 74.87). In terms of employment, five industries also provided more than a third of a million jobs – labour recruitment, industrial cleaning, other business activities, architectural and engineering activities, and other software consultancy and supply. The five sectors with the highest numbers of enterprises were other business activities, business and management consultancy, architectural and engineering design, other software consultancy and supply (each with more than 50,000 enterprises), and other computer related activities (with around 32,000).