The Thames Valley has been the butt of jokes and invective since John Betjeman willed ‘friendly bombs’ to fall on Slough. But it seems to be having the last laugh.

In the past decade, it’s been the UK’s fastest-growing regional economy, expanding by 96.6 per cent compared to a national average of 72.5 per cent, or London’s 87.7 per cent. Proximity to Heathrow has attracted the likes of Vodafone and Microsoft, which has in turn created opportunities for businesses serving those companies.

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Technology consultancy Bluefish is one such venture. Launched in 2004, it has grown sales to an estimated £10 million this year.

‘We never could have achieved this if we’d stayed in St Albans,’ says COO Lyndon Knight, who relocated the business to Reading in 2005. The city provided an excellent base for Bluefish because of its proximity to key clients and the concentration of IT workers in the area.

‘Based in Reading, I can spend half a day at Vodafone, meet NEC [executives] in the afternoon then have dinner with Cisco [directors],’ Knight adds.

With their bias towards service industries and IT, cities such as Reading point the way towards the “knowledge economy” that policymakers see as the way forward for the UK, according to Claire Prosser, a policy executive at the Thames Valley Chamber of Commerce.

‘Despite the downturn, confidence is relatively high,’ says Prosser. ‘That’s not because of any government initiatives; the region is its own success story.’

There are, of course, downsides to this success. While less prosperous regions offer incentives to businesses to relocate or open offices there, the Thames Valley is attractive enough without such carrots. Prosser says there are ‘no grants in the area, full stop’.

The other snag is that unless you’re coming from central London, you won’t save money by moving to the region. Of the top ten costliest places in Britain to do business, three of them are located in the Thames Valley, according to the Alliance & Leicester business cost monitor.

‘To be perfectly honest [labour costs] are not much different to St Albans,’ says Knight. ‘If I wanted “cheap”, I would have gone elsewhere.’ Bluefish has addressed this problem by outsourcing all non-core functions to Cardiff, where Knight says ‘you can get really good people for 25 per cent less than in Reading’.

New kid on the block

Milton Keynes may not be part of the Thames Valley, having separated from Buckinghamshire in 1997, but it shares many characteristics of the region including a large working-age population, a dominant technology sector, and good transport links with the capital. It has also attracted its share of ridicule for its grid layout and supposed sterility.

‘Most people we show around Milton Keynes actually rather like it,’ says Grant Seeley, inward investment director at Invest Milton Keynes, a body responsible for promoting the borough. ‘They don’t find the criticism and jokes are borne out by reality.’

As the northernmost part of the South East, Milton Keynes occupies a strategic position between Birmingham and London, adds Seeley. That makes it popular with distributors such as Kuehne + Nagel and NYK Logistics, as well as companies involved in light manufacturing.

It’s also got its fair share of IT companies. US systems integration specialist Axispoint relocated its UK headquarters from London to Milton Keynes in July, and hasn’t looked back.

‘We wanted to give our employees somewhere comfortable and fun to work, and this was tough to achieve in London,’ says MD Peter Borner. ‘We have no problems recruiting people with the right qualifications and experience in Milton Keynes.’

Again, expense is a potential drawback: Milton Keynes was ranked second only to London in Alliance & Leicester’s cost monitor. Seeley emphasises that rents and wages are still reasonable by London standards, while Borner maintains that Axispoint saved money by moving to the area.

In the final analysis, the region’s price tag is a mark of its desirability as a business base, according to Knight of Bluefish. The only drawback is that his family home is almost 100 miles away.

‘My wife and four children love living in Somerset,’ he says. ‘If I had my way, IT central would be in the West Country.’

Related: 12 of the most exciting tech companies in Reading and Thames Valley