Advice on where to do business in the UK
Having worked in the business support sector in the UK for 10 years in the 1990s I am interested in how enterprise activity is monitored both there and in Ireland - and the usefulness of research in assisting companies in deciding where to do business.
Here we have depended on the Global Entrepreneurship Monitor (GEM) to provide us with information on a level of economic activity. Some of the GEM report particularly the definition of the so called “nascent entrepreneurs” is unconvincing, as is the aspirational definition of “high growth expectation early stage entrepreneurs”. Enough said!
And if you like to look at hard facts Bank of Ireland has recently published its Business Start-up Barometer for 2009 that tracks the number of new businesses starting up in Ireland.
There were 13,327 new businesses formed in 2009, or 36 per day, which showed a 9% decrease when compared to 14,753 new business formations in 2008. Nearly half of the start-ups, 6,129 were registered in Dublin.
There is much more meaty data available in the UK – let’s look at the data that was published last month by the Centre for Cities.
UK governments have introduced a plethora of schemes over the years to improve enterprise development. Ten years ago, the then Chancellor Gordon Brown wanted to make it easier for anyone in Britain to start up a new business – especially in deprived inner-city areas.
One way Gordon Brown used was to highlight the sharp differences in business start-up rates between different cities. In 1998, the lowest start-up rates were in the North East – the most entrepreneurial places were in London and the South East.
Fast-forward ten years, and the picture hasn’t changed very much.
Recent research highlights the cities with the lowest business formation rates – Middlesbrough and Sunderland; and the most entrepreneurial cities – London, Milton Keynes, Brighton, etc.
Nine of the ten least-enterprising cities are port cities – Birkenhead, Belfast, Liverpool, Plymouth, Newcastle, Dundee, Hull, Sunderland and Middlesbrough. Older, industrial cities that have for years depended on a small number of large employers.
This shows that start-up rates are quite static – persistently low in Sunderland, persistently high in Milton Keynes – despite years of policy initiatives, under both Conservatives and Labour.
All cities will need to grow their private sector, during the recovery – especially given the imminent public spending squeeze (which has already started for us in Ireland). But cities like Reading and Brighton seem to be inherently better at generating start-ups, than Plymouth and Newcastle. If the politicians want to see more private enterprise, they will need to develop a different type of enterprise policy for struggling cities – more realistic, more tailored, and longer-term.
Cities Outlook 2010 finds that, as they move out of recession, the UK will face an uneven recovery. Already robust city economies like Brighton are more likely to grow stronger, leaving others like Doncaster further behind. This raises tough questions about how they can carve out a future that’s economically sustainable.
Five big hitters: The turnaround of the largest cities will be critical to UK national recovery. More than one in three jobs (39%) in England is based in just five cities – Greater London and the City Regions of Manchester, Birmingham, Leeds and Liverpool.
Five to watch: Brighton, Milton Keynes, Reading, Cambridge and Edinburgh have the right ingredients to succeed after the recession has passed. They have strong private sectors, high levels of entrepreneurship, highly educated workforces and large shares of knowledge-intensive jobs
Brighton added the highest number of private sector jobs over the past decade – an extra 20,000 jobs. Over a third of its workforce is graduate-level – and one in five of its jobs are part of the knowledge economy.
Five with a tough outlook: Other cities, such as Stoke, Burnley, Barnsley, Newport and Doncaster, with their weaker business base, have a much tougher outlook. These cities all lost private sector jobs over the pre-recession decade. Their rate of business start ups is low and many of their residents have no qualifications.
In Ireland we also face an uneven recovery, different regions and sectors will recover more strongly then others.
This UK information may well inform Irish businesses which UK region to focus on for export, and which locations are more attractive for opening a UK base.
Billy Linehan
Celtar management consultants
086 608 6991
Centre for Cities, www.centreforcities.org
www.bankofireland.com/press_room/latest_releases/2010/General_Content_1000559.html
GEM report 2008, www.forfas.ie/media/gem_report_2008.pdf
