There Is Now a 'Northern Powerhouse' of Online Retail Businesses to Rival London's Tech Heartland

01/06/2015 10:24 BST | Updated 29/05/2016 10:59 BST

If you were asked to say where in the UK had the highest digital density of online businesses you would probably answer London, Shoreditch and Tech City. The reality is actually very different.

A new report from our Public Policy Lab has revealed that technology is opening up opportunities for online businesses right across the UK with digital clusters spread all across the country, particularly in the North West and Yorkshire.

The location with the highest density of online businesses - calculated on the volume of small online retail businesses operating in a region and their subsequent sales, as a proportion of the local population - is over 200 miles from London, up the M6 in Greater Manchester.

It's followed in our 'digital density' rankings by Lancashire and West Yorkshire, suggesting there is a new 'Northern Powerhouse' of ecommerce, to borrow a phrase from the Chancellor of the Exchequer. Central London, incidentally, is in 26th position.

In recent times we've been seeing more and more smaller entrepreneurs pulling out all the stops to achieve success. These businesses range from micro-businesses and homepreneurs through to businesses like Thingimijigs, which started with just an eBay account, £200 and a kitchen table and now sell branded gifts and accessories for kids globally from a purpose built facility in Burnley.

A massive 91% of Small to Medium sized Businesses (SMBs) on eBay in the UK sell internationally. They reach, on average 20 different countries annually. It's this ability to export that we believe is one of the key reasons behind the growth and success of these businesses. They have the entrepreneurial spirit and the flexibility to export millions of goods abroad, despite lacking the infrastructure of a traditional exporter.

Technology is now breaking down barriers to global markets by allowing small businesses access to products and services that were once the preserve of large firms, such as smart shipping, international payments and translation, and using global marketplaces like eBay to access millions of potential customers.

Take Oliver Margarson, from Grimsby in Lincolnshire, who started dabbling in online sales as a student, before turning it in to a full-time business in 2008. Selling audio-visual items and accessories as well as other small household electronics, Electrolve now operates from a 16,000 sq. foot warehouse, employs eight people and since inception has doubled its year on year sales with approximately 40% of the business exported globally.

Or Greater Manchester company PF Jones. Founded almost 60 years ago in 1958 selling diesel injectors and fuel pumps, they have also expanded quickly. Since adding an online eBay store to their four branches across the North of England they have seen an unprecedented rise in profits, with their eBay turnover doubling, creating five new jobs just to cope with the online retail demand.

With stories like this - unsung British success stories - the more confident I am for the future of online retail and its place in the UK economy.