Douglas McWilliams, president of the Centre for Economic and Business Research, coined the term last year to describe the twentysomething entrepreneurs working at small high-tech companies in the Silicon Roundabout area of London.
Although the flat white coffee, made with hot but not frothy milk, hails from Melbourne where it is ubiquitous, it has also come to symbolise the hipster who works for a high-growth digital company in website design and marketing or app development.
Since 2012, the sector has overtaken the retail sector, finance and the wholesales sector.
McWilliams said that new data showed that the flat white economy accounted for 8.7 per cent of Britain’s GDP, which means that it has overtaken the retail, finance and wholesale sectors, moving up from fifth in 2012 and by 2025, the Flat White Economy will contribute 15.8% of GDP making it the single largest business sector in the UK
It accounted for 40 per cent of the country’s growth in the three years to 2015 as more businesses around the Boxpark in Shoreditch, east London, and other technology hot spots such as Brighton and Cambridge have expanded rapidly.
McWilliams also noted the fact the sector had received very little attention from the government in last week’s budget.
“The law of unintended consequences may be working in the Chancellor’s favour. The sector has grown without much assistance from the government and seems likely to continue to do so,” McWilliams said.
“The Budget’s personal tax changes, particularly the rise in the threshold for the 40 per cent tax band, are likely to benefit those working in the Flat White Economy disproportionately.
“Crossrail 2 and changes to planning regulations to boost London’s housebuilding will also deal with two of the major handicaps to the sector – the high cost of housing and lack of transport in London.”
