Professional and business services

The UK is a prominent provider of professional and business services (PBS) and is recognized as a worldwide hub for pioneering innovations in business process outsourcing (BPO).

The professional and business services (PBS) sector is one of the largest and most successful industries in the UK, employing 14% of the workforce. This sector benefits from access to highly skilled professionals, and its ongoing technological innovations drive high growth, offering opportunities for both existing players and new entrants. The UK government collaborates closely with the sector to attract and nurture top talent from various fields, including accountants, architects, lawyers, engineers, recruitment specialists, advertisers, administrators, and consultants.

Opportunity highlights

Net Zero and Environmental Services

The UK government’s commitment to a greener recovery and its target of reducing emissions by 78% by 2035, inclusive of international aviation and shipping emissions, highlights the importance of environmental, social, and governance (ESG) principles in the country. The UK’s environmental consultancy market, which reached £2.2 billion in revenue for 2021-2022, is expected to continue growing at a compound annual rate of 2.1% over the next five years. This sector plays a vital role in helping the broader economy meet net-zero targets by offering services such as energy-efficient building design and legal advice for green projects.

Digital Transformation

The digital transformation, driven by technologies like cloud computing, robotics, artificial intelligence (AI), and big data, is revolutionizing various sub-sectors within professional and business services (PBS). Innovative companies specializing in areas like HRtech, legaltech, and regtech are thriving in this transformative landscape. With abundant capital availability, significant growth potential, and access to global professional services providers, the UK is an attractive destination for new entrants in these emerging sectors. The country’s technological prowess and access to a talented workforce further bolster its appeal.

Business Process Innovation

Technological innovation, accelerated by the pandemic, is leading to improvements in productivity, streamlined processes, resilient supply chains, and expanded outsourced business operations. The UK has established itself as Europe’s leading location for business process management, offering ample opportunities for international firms to set up innovation centers. These centers can drive digital business transformation for clients and leverage the UK’s global reputation and skilled workforce.

International Professional Services

The UK is a dominant player in international professional services, ranking as the world’s second-largest exporter of business services. The country is home to five of the top 15 global law firms and three of the “Big 4” global accountancy and consultancy firms. The UK serves as an ideal base for international professional services firms, supported by new services and digitally-focused free trade agreements (FTAs) and trading frameworks. London’s status as the world’s premier international financial center further enhances the country’s appeal in this sector.

Commercial maturity

The professional and business services (PBS) sector is a vital component of the UK economy, contributing significantly to the country’s Gross Value Added (GVA). With approximately 635,585 registered PBS enterprises, this sector employs 4.6 million people and generates a combined turnover of £464.9 billion. It also plays a key role in driving exports, with a total value of £96 billion.

The size and significance of the PBS sector make it integral to the overall UK economy. The UK government recognizes its importance and is actively working to connect the various sub-sectors and their representative bodies to strategic national initiatives such as those related to innovation, skills development, and policy areas like the Levelling Up and Net Zero agendas.

UK assets

The UK boasts several significant clusters of professional and business services (PBS) activity across various regions:

South of England

London is home to all of the top 50 law firms, reflecting the international recognition and prestige of English Law.

Midlands

Birmingham features a prominent accounting cluster and hosts a rapidly growing ProfTech supercluster, which is driving market disruption and technology adoption. The city-region has more business, finance, and law graduates than any other outside of London. The Midlands also houses some of Europe’s largest legal, accountancy, and management consultancy firms, employing 75,600 professionals.

North East

The North East has a thriving cluster of business process outsourcing (BPO) and shared services centres (SSC). It hosts operations by some of the industry’s giants, including Concentrix, Res-Q, Sitel, Teleperformance, and Accenture. In Manchester, the legal services sector is highly significant, featuring firms such as DLA Piper, Eversheds Sutherland, and Latham & Watkins.

Scotland

Edinburgh boasts a robust PBS ecosystem and is recognized as a growth sector in Scotland’s Economic Strategy. The country aims to capitalize on its existing comparative advantage and enhance productivity in the PBS sector. Additionally, Scotland is poised to become a leader in environmental legal services, especially after hosting COP26 in Glasgow.

R&D capability

Innovative companies in the professional and business services (PBS) sector can benefit from government support and initiatives:

R&D Tax Relief Scheme

Eligible companies can take advantage of the government’s Research and Development (R&D) Tax Relief Scheme, which allows them to recover up to 33.35% of their R&D spending. This can be in the form of a reduction in Corporation Tax or a cash repayment.

SuperTech – ProfTech Supercluster

The SuperTech initiative represents the first ProfTech supercluster in the UK. It fosters innovation and economic growth across the ProfTech industry, particularly in the West Midlands. This initiative supports a thriving ecosystem in the region.

Innovation Hubs

Several innovation hubs are playing a pivotal role in advancing innovation in the PBS sector. These include:

- Tech Nation’s LawTech UK: An initiative in partnership with the Lawtech Delivery Panel and the Ministry of Justice to support the digital transformation of legal services.
- Freshfields Hub in Manchester: This hub employs cutting-edge tools, such as document automation and AI, to streamline legal tasks.
- Bain Digital Innovation Hub in London: This hub facilitates collaboration between businesses and digital experts, connecting them with a network of startups to brainstorm and explore innovative technologies within the PBS sector.

Business and government support

In June 2021, a government funding scheme was initiated to aid PBS regulators and professional bodies in offering services abroad. Successful applicants receive an 80% reimbursement of eligible costs after the fact.

In 2019, the government allocated £2 million to back the LawTech Delivery Panel, which promotes innovation for the expansion of the UK legal sector.

The government also provides funding to UK Research and Innovation (UKRI), primarily through Innovate UK, offering financial support to highly innovative SMEs and large businesses in the PBS sector. Funding amounts vary, ranging from £25,000 to £10 million, depending on specific program requirements and project scopes.