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The significance of home-based businesses for entrepreneurship in cities is underestimated, and their needs largely ignored by policymakers, suggest researchers.

The significance of home-based businesses for entrepreneurship in cities is underestimated, suggests a seminar series organised by researchers from the Universities of Southampton, Middlesex, Glasgow and Delft University of Technology.

"Home-based businesses are significant as approximately half of all small- and medium-sized businesses in the UK and the US are home-based, and the proportion of home-based businesses is rising over time,” says Dr Darja Reuschke. Today 59% of UK small businesses without employees and 24% of small businesses with employees are home-based.

Researchers believe the needs of home-based businesses are largely ignored by policymakers. A policy focus on, for example, the creation of entrepreneurial environments in designated areas such as Enterprise Zones misses the great potential for local growth in entrepreneurship and self-employment which occurs 'under the radar' of enterprise policy and business services, Dr Reuschke argues.

Home-based businesses have specific needs such as digital connectivity and access to IT support and other business expertise. And they can be hindered by, for example, housing regulations which prevent people from using their homes for business purposes. New perspectives on local economic growth are required that view home-based business activities as essential in increasing start-up rates and inclusive entrepreneurship, researchers conclude.