Creative ‘flat white sector’ becomes UK’s biggest growth driver

Josh Hall's picture
by Josh Hall

The so-called “flat white sector” has outstripped manufacturing to become the UK’s biggest driver of growth.

This is according to new research from the Centre for Economics and Business Research (CEBR), which uses the term to describe businesses such as marketing, film, and music that can be seen being conducted in coffee shops around places like East London’s Silicon Roundabout.

The flat white sector was responsible for 14.4 per cent of all gross value added in the UK economy during 2018, and almost half of recorded growth.

It also outperformed the economy as a whole, growing at a rate of 4.6 per cent during the year, or around three times average GDP growth.

Commenting on the research, the CEBR’s Douglas McWilliams said: “One of the most important parts of the sector is the digital marketing that results from the UK’s remarkably high share of online consumers’ and other expenditure.”

But he sounded a note of caution on the total impact of the flat white economy when compared with the large supply chains that grow up around traditional industry. “To be fair, industry generates much more knock-on activity still, which needs also to be taken into account,” he said.

While the creative and digital sector is booming, there are some risks to its continued expansion. The UK’s exit from the European Union will likely exert pressure on the sector, particularly in terms of staffing, while rising operating costs in major cities poses challenges for newer firms – but could see the sector expand outside of London.

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