In this paper we analyse regional variations in the characteristics, performance, and growth of small and medium-sized manufacturing and business service enterprises in Britain, with particular reference to their impact on the ‘North—South divide’ in British regional economic development. Using a unique national survey of nearly 2000 smaller businesses, we identify regional differences in enterprise growth rates, market specialisation, innovation rates and research and development intensity, occupational structures, and labour-market problems. We also reveal differences in the frequency of use of government advisory agencies, and in the rating by firms in different regions of key competitive advantages and constraints on growth. These differences do not however conform to simple traditional stereotypes suggested by images of a declining North and a growing South. The implications of these findings both for understanding recent regional economic development in Britain and for policies such as those of local Training and Enterprise Councils are considered.
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