The Sussex economy is suffering because businesses have problems finding the right premises.

Sussex Enterprise says 13 per cent of firms in the county put up with inadequate premises, which act as a constraint on their development and productivity.

Researcher Joe Clease said: "We forecast a shortage of office and industrial space could develop in some parts of Sussex. The effect could be devastating for the economy as companies would be forced to either relocate outside the county or hold back expansion.

"This will inhibit the growth potential of Sussex, resulting in fewer quality jobs and high value-added businesses."

East Sussex has seen almost no new office buildings in the last 15 years whereas West Sussex has received 95 per cent of all investment in new office floor space since 1987.

Frustrated demand for premises in Brighton is beginning to spill over into other towns, including Eastbourne, Worthing and Burgess Hill.

The increasing take up of office space in these towns could soon restrict the amount of space left to expand.

Although there are some towns in Sussex which expect to have spare capacity, most companies in congested towns would be unwilling to relocate to these areas, as they need to be close to their staff and markets.

Mr Clease said: "Unless the imbalance of new office and industrial floor space development is redressed, Brighton and Hove and East Sussex will be in danger of becoming second class business locations. The answer lies in ensuring an adequate choice of premises is available, rather than building one or two huge blocks."

Sussex Enterprise is calling for a package of measures, including:

Improved transport and broadband
infrastructure, especially in East Sussex Fewer tiers of planning authorities
with clearer relationships between them Local plans that can be adapted
more easily to introduce flexibility to changing market conditions Improved integration with regional
strategies A flexible leasing regime in
partnership with major landlords in order to encourage the market to become more responsive to the needs of growing businesses.

Some limited public investment to
open up key sites.

Its research report, Room to Grow, will be used by Sussex Enterprise in consultations on the problem.