Businesses based in central London lose about 50,000 working days and £37m a year because of slow internet, a new report has suggested.
The Centre for Economics and Business Research (CEBR) analysed more than 400,000 small and medium-sized enterprises (SMEs) and their broadband capabilities, finding that many were being hindered by issues with their Internet connection.
Surprisingly, tech companies based around London’s Silicon Roundabout, the new technology heart of the city in east London, have been among the most affected.
"The fact that central London has the highest concentration of SMEs suffering from low broadband speeds has implications for productivity in London's economy,” Colm Sheehy, senior economist at CEBR, said.
City of London based businesses reported the average broadband speed just about 11.2 Mbps, compared to the London average of 20.5 Mbps. Those based east of the City, near the Silicon Roundabout, have reported even worse figures, which may come as a surprise as this area of east London in known as a technology hub, a frequent base of start-ups developing new digital technology applications.
"Our new technology start-up has faced many business challenges since launching but we never thought broadband would be one of them,” said Paul Dolman-Darrall, founder of Gamevy, a gaming consultancy based in east London that creates playable quiz shows.
"Despite residing in an office on the edge of EC1, a mere two minutes from the City of London, we were unable to get fibre-optic broadband. As a company of 10 people requiring heavy data usage this was absolutely ludicrous.”
But the trend is not confined to London. A recent report by the Federation of Small Businesses (FSB) suggested that due to its below-average internet speed, the UK's broadband was not "fit for purpose".
CEBR's report found that 50,400 days were wasted by businesses in London waiting for installation of broadband, time that cost enterprises more than £37m.
London is working to become a greater hub during the technology boom, with the capital hosting its first Technology Week earlier this year, which was launched by Mayor Boris Johnson, and something that he described as wanting to be "bigger than Fashion Week" in the long-term.
Deputy mayor Kit Malthouse has also previously described the technology sector as "central" to future economic policy.