Competitive business landscape

The most competitive and highest-earning industries in the UK and US

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In today’s rapidly evolving business landscape, staying ahead of the competition is increasingly difficult. 

Understanding the dynamics of an industry, including survival rates, GDP, and regional performance, is essential to success when launching or scaling a business.

To help budding entrepreneurs and SMEs, new research from the business experts at Sopro has revealed which industries are the most competitive and lucrative across the UK and US. 

The research also reveals which sectors see the best survival and customer retention rates and offers expert tips on how businesses can get ahead of their competition. 

The most competitive industries in the UK 

Based on the number of competitor businesses (millions) in each sector: 

1. Professional, scientific & technical

The professional, scientific, and technical industry has the highest number of competitor businesses in the UK, at 415,250. This sector includes accounting, legal services, and scientific research. The volume of businesses in the sector can largely be attributed to the high demand for these services in metro areas, such as Greater Manchester and the City of Edinburgh, which are hubs of innovation and entrepreneurship.

2. Motor Trade, wholesale and retail

The motor trade, wholesale, and retail industry is second, with 402,165 businesses in the UK as of 2023. Motor retail is a significant driver for this sector as a result of the consistent demand generated by cars being the most commonly-used form of transportation – servicing the vast majority of the national adult population. 

3. Construction

In third place is the construction industry, which has 377,585 UK businesses. This sector sees a consistent demand, not only as populations grow and require more housing but also as homeowners look to renovate and modernise their living spaces through increasingly costly projects – offering high profit potential for builders. 

The most competitive industries in the US 

Based on the number of competitor businesses (millions) in each sector: 

1. Retail Trade

The retail sector has almost 1.04 million businesses in the US, making it the most competitive industry nationally. This can largely be attributed to consistently high levels of demand as a result of the sector encompassing many necessities, like food and toiletries, as well as popular luxuries like fashion and holiday decor. 

2. Professional, scientific, and technical services

Professional, scientific, and technical services take second place among the industries with the most businesses in the US. Given the US’s large and diverse economy, other businesses drive a lot of the demand for this sector due to requiring the services it provides, such as accounting and legal support. 

3. Health care and social assistance

The healthcare and social assistance sector rounds off the top three, with just shy of 950,000 businesses nationally. Healthcare is a huge market in the US due to the lack of a free healthcare system that some other countries globally benefit from. The necessary nature of healthcare and the high cost of medical procedures make it a highly competitive and profitable sector. 

The highest-earning industries in the UK

In UK GDP (billions): 

1. Services sector

The UK industry with the highest GDP is the services sector, which has an annual output of £1.6 trillion. Between 2022 and 2024, the services sector contributed around 81% of the UK’s gross value added (GVA) and 82% of employment. This sector includes popular businesses such as retail, hotels, and restaurants. 

2. Production sector

The production sector has the second-highest earnings in the UK, with a GDP of £269.1 billion – amounting to 21.7% of the UK economy in terms of GDP. This sector includes manufacturing, mining, energy, and water supply. The essential nature of this sector contributes to its consistently high profits. 

3. Real estate activities

Real estate activities, with a GDP of £265.7 billion, are third among the highest-earning industries in the UK. In addition to turning over one of the highest values of any sector nationally, the UK’s real estate market is also the second largest in Europe, after Germany. 

The service industry is the highest-earning in all UK regions

The services sector also ranked top for GDP output across all individual UK regions, with one of the highest numbers of employees of any sector supporting the lucrative industry. But which regions of the UK are earning the most in this industry?

1. North Yorkshire

North Yorkshire is the UK region with the highest GDP per capita in the services sector, with an annual total of almost £86,400. While somewhat surprising that the rural Northern region came out top ahead of major UK cities, North Yorkshire is home to attractions that draw tourists from all over the country. For example, the Yorkshire Dales and North York Moors are popular hiking spots, bringing in tourists who boost spending in the sector. 

2. Berkshire, Buckinghamshire and Oxfordshire

In second place is Berkshire, Buckinghamshire and Oxfordshire, at more than £60,500 per capita. Given the close proximity of the trio of regions to London, this could largely be attributed to the financial spillover of the capital, as professionals and tourists alike seek lower costs while visiting or commuting.

3. London

In third place is London, which has a GDP of £49,400 per capita in the services industry. The reasoning for this is multifaceted. London is a tourism hotspot, so the service sector sees a lot of business from national and international visitors throughout the year. Additionally, London has a huge, highly skilled, and well-paid workforce that often spend regularly in the sector during their working week. 

The highest-earning industries in the US

In US GDP (trillions): 

Rank	Industry	US GDP (trillions)
1	Real estate, rental and leasing	$3.67
2	Professional and business services	$3.54
3	Manufacturing	$2.80
4	Professional, scientific, and technical services	$2.18
5	State and local	$2.11
6	Health care and social assistance	$2.04
7	Finance and insurance	$1.99
8	Retail trade	$1.74
9	Trade	$1.61
9	Wholesale trade	$1.61

1. Real estate, rental, and leasing

The real estate, rental, and leasing sector is the highest-earning industry in the US, with a GDP of $3.7 trillion. Additionally, from 2024 to 2029, this industry is projected to grow at a rate of 3.34% per annum. The US is a particularly house-proud nation, influenced by popular culture including TV shows that glamorise luxury homes, contributing to this high spend. 

2. Professional and business services

The professional and business services sector has the second-highest GDP in the US, at $3.5 trillion. This sector employs highly skilled and educated professionals who are often paid well and have a high economic output, making it a high-value sector in the economy.

3. Manufacturing

Finishing off the top three is the manufacturing industry, with a GDP of $2.8 trillion. Manufacturing has one of the highest outputs due to making a vast range of goods for both domestic consumption and retail, as well as export.

The highest-earning industries in the US by state

The real estate, rental, and leasing sector also dominates on a regional level, as the highest-earning in the most states of any industry across the US. Among the 12 states where it ranks top is Florida, which is a popular destination for people to invest in second or holiday homes. The East Coast state’s real estate sector also attracts lots of business from migration as a popular destination for retirees to move to due to its warm year-round weather and affordable cost of living.

The manufacturing industry is second in regional dominance, with the highest GDP output in 11 states. These include Wisconsin, Ohio, and Michigan, all three of which are well-known for the prevalence of manufacturing firms, jobs, and output.

Tied for third place regionally are the trade and professional and business services industries, which each have the highest GDP output in 9 different states. Among the states where the trade industry ranks top is Texas, which has a huge transportation network comprised of ports, airports, railroads and highways, facilitating efficient trade logistics. 

California is among states where the professional and business services industry is top for earnings, likely due to the high number of business start-ups bred by the state’s historic promise of opportunity. 

Business survival rates by industry in the UK

1. Electricity, gas, steam and air conditioning supply

The electricity, gas, steam, and air conditioning supply industry has the best survival rate among UK industries. In the most recently documented five-year period (2017-2022), 3,625 new businesses were established in this sector, and only 1,915 closed down – giving the industry a survival rate of 47.17%. This reflects the essential nature of the sector’s service. 

2. Manufacture of beverages

The manufacture of beverages industry has the second-best business survival rate in the UK, at 41.5%. Of 2,265 new businesses formed in this industry, just 1,325 have not lasted in a five-year span (2017-2022). This is due to a consistently high demand from both hospitality businesses and individual consumers driving sales.

3. Financial service activities

The financial service activities sector (excluding insurance and pension funding) completes the top three, with a survival rate of 39.85%. Given that this sector encompasses a wide array of essential financial services, such as banking, accounting, and taxes, this sector remains a consistent top player.

Customer retention rate by industry

1. Media & Professional services

The media and professional services industries share the top spot for industries with the best customer retention at a joint rate of 84%. The reasons for this can vary from having long-term contracts to retainer agreements or media subscription services. Media businesses also benefit from the additional appeal of offering valued, exclusive content. 

3. Automotive and transportation & Insurance

The automotive and transportation, and insurance industries are in joint third place, with customer retention rates of 83%. This can largely be attributed to brand loyalty cultivated by superior customer service and generous financing options in these industries. 

4. IT services 

The IT services industry rounds off the top three industries, with 81% customer retention. This is another sector that puts a high emphasis on customer service and often operates in long-term contracts, making it more common for customers to sign up for longer periods of time and develop brand loyalty. 

The most prospected industries

1. Financial services

The financial services sector is the industry subjected to the most prospecting, with 12.8% of all emails sent in the last 12 months being targeted at this sector. Perhaps the key reason for this is the potentially high-value customers and transactions that could bear fruit in this sector.

2. Construction

Construction is the second-most-prospected industry, making up 8.1% of all relevant emails. This is another high-value industry, especially since many construction projects can span months or years, leading to lucrative long-term arrangements for companies. 

3. Retail

In third place is the retail industry, which was targeted by 6.5% of email prospecting in the last 12 months. The retail industry is likely targeted so often due to its huge consumer base and top GDP ranking within the services sector. 

Ryan Welmans, Co-Founder and CEO at Sopro, comments:

“When starting a business, it’s imperative to do your research. You’ll want to choose an industry that aligns with your areas of expertise, of course. But for a real chance of success, you’ll also need to consider market size, trends, growth rates, and competition – as well as how you’ll set yourself apart from the competition.

“Being proactive is crucial when building your business and securing clients or sales. Understanding your potential customer’s needs is key so you can offer a truly beneficial product or service. You can achieve this by utilising buyer personas, which ascertain key information about prospective customers, such as their professional background, challenges they face in their respective fields, their content preferences, and budget authority. 

“With your buyer personas established, you can use lead generation and prospecting, whether in-house or via an external team, to identify new potential clients. Lead generation and prospecting use outbound one-to-one marketing activities, such as emails, phone calls, or social media messaging. 

“This can be used to target businesses that have previously shown interest in your services or clients that fit your buyer personas, to really drive results and get your business in front of your target customers – and, importantly, ahead of your competition.”

Case Studies:

Two businesses explain how they got ahead of their competitors and charged their enterprise forward by investing in growth tactics, such as prospecting and lead generation. 

Teri Maltais, Marketing Director at HR platform iTacit, said: “Our solution doesn’t fit neatly into one category, so most HR teams aren’t used to buying that way. That creates a challenge of not having a category to tap into. When our solution is that little bit different to the competition, there’s a challenge in marketing that.

“[Investing in a multi-channel marketing service] was a really great way for us to plug and play into a proven business development programme and not lose ground on demand generation while giving us the time to build up our internal business development functions.

“We’re now generating five times the number of leads we were before because we’ve been able to focus on those other areas while [the external team] took care of leads for us.”

Tom Newham, Managing Director, specialist IT support company On IT, said: “Before [investing in a specialist prospecting service] we tried various different channels, spent about £75,000 on Google PPC, Facebook marketing, telemarketing, various other channels and generated net zero.

“Since engaging with [an external business growth team] we closed our deals in the space of six weeks. We actually closed the first deal within the first week, so that went from a lead generated to a signed customer in the space of three weeks.

“I was so impressed with the results that after the first three months, we decided to double our spend and since then, it’s grown even more so. We’re now dealing with half a dozen customers at a time that are coming through and with this growth, it means we’ve been able to recruit new staff as well.”

Methodology 

We used ONS data to look at which industries had the most businesses in the UK, using the most recently available version of the dataset – Table 28.

For the US, we used US Census data from 2021 to examine the industries with the most businesses across the US nationally, using the “U.S., NAICS sectors, larger employment sizes up to 20,000+” datasets.

Using ONS data from 2023, we used Table 1b to show which industries had the highest GDP overall in the UK. We then accessed Table 2b to reveal which industries had the highest GDP for each available region. 

We then used data from the Bureau of Economic Analysis to show which industry has the highest GDP in the United States in 2023. We also used this data to show which industries have the highest GDP for each US state. We removed the “private industries” sectors from the dataset as the BEA definition: “This sector includes all economic enterprises owned by individuals or groups, as opposed to public sector or government entities. Private industries include corporations, cooperatives, trusts, partnerships and sole proprietorships.” indicates that it includes the GDP of other industries, which would not be fair in a comparison such as this. We also removed any other industries in this dataset that incorporated multiple industries, including: 

• Arts, entertainment, recreation, accommodation, and food services
• Educational services, health care, and social assistance
• Federal civilian
• Finance, insurance, real estate, rental, and leasing
• Mining, quarrying, and oil and gas extraction
• Government and government enterprises
• Manufacturing and information

We also briefly reference insights from the House of Commons Library “Service Industries: Key Economic Indicators” and Statista’s “Value of commercial real estate market in Europe in 2023, by country” & “Real Estate – United States”. 

Using ONS data from 2023, Table 1.2 shows which industries had the best survival rate from 2017 to 2022. We removed four industries from this data set, as they had less than 100 new businesses during this period, giving them unreasonably high survival rates, which would skew the data.

Using Exploding Topics’ “Average Customer Retention By Industry (2024)”, we could show which industries have the highest customer retention rates in the US.

Then, using the Sopro “The State of Prospecting 2024”, we highlighted which industries had been most targeted by email prospecting, using the table on page 20.