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The capital has a reputation for attracting business opportunities and innovative ideas, but other regions across the UK are catching up.
Last updated: 21 Jul 2020 5 min read
Between now and 2020, the South East will see the highest level of growth among UK regions, according to a forecast released by professional services firm EY at the end of 2017. With predicted growth at 2%, the region is outstripped by the capital itself, which has a forecasted growth rate of 2.2%.
Despite London and the South East’s headline-grabbing growth figures, three out of every five new high-growth companies are formed outside the M25. These firms are also creating one in three jobs, according to the Centre for Economics and Business Research’s (CEBR) High Growth Small Business Urban Hub League Table, published in 2016.
With a growth forecast of 1.7% over the next few years, the East of England is one of the UK’s fastest-growing regions. Employment is also increasing – 15,000 more jobs were recorded in June 2017 compared with the previous year.
A dominant driving force behind this is its vibrant tech scene, also known as its ‘emerging tech diamond’. This stretches from St Albans and Stevenage to Cambridge and Peterborough in the north of the region, across to Ipswich and Norwich, and back down via Colchester and Chelmsford in the south.
Owen O’Neill is CEO and founder of digital platform University Compare, which has previously raised six-figure investment through equity crowdfunding platform Seedrs. “The fact [the tech scene] is thriving is partly down to the greater availability of affordable co-working and office spaces, as well as the appeal of the location,” he says. “With the region being so close to London, it’s an ideal base for start-ups and young businesses that can’t meet the costs of operating out of the capital but want access to top talent.”
O’Neill adds that councils in the area can offer invaluable support and resources. “Essex County Council runs an innovation programme dedicated to early-stage and established companies, helping them to start up, bring new products to market and grow. It also hosts regular drop-in sessions, where aspiring entrepreneurs can meet existing business owners and be inspired.”
In the Scottish Highlands, Inverness is fast becoming a major hub for medtech and life sciences research. The region is home to Aseptium, which specialises in cutting-edge medical decontamination equipment, and Mime Technologies, a provider of mobile software for first responders.
With a number of both national and international companies boasting R&D centres and production facilities in and around Inverness, the region is helping to foster innovation. The University of the Highlands and Islands has also developed an MSc in applied bioscience skills for industry to support bioscience graduates and equip them with the skills needed in the workplace.
Another region witnessing a boom in its digital economy is the South West, particularly Bournemouth and Poole. There’s a good reason the area is referred to as the Silicon Beach, says Marc Biles, CEO of fintech company Ratio.
“I know London-based businesses are always competing for the best employees or new ideas, but down here there’s a fantastic group of businesses that all help each other out – we learn from one another instead,” he says. “We have a supportive community and I think that’s been the main contributing factor to the positive economic growth.”
“There came a tipping point when I wanted to scale the business and needed the space, time and support that I just couldn’t get in London”Oonagh Simms, founder, The Marshmallowist
The digital sector in Bournemouth and Poole employs 15,763 people and its gross value added (GVA) is worth £352m a year, according to the latest Tech Nation report. Furthermore, 26% of the area’s companies are classed as high-growth.
“Compared to the relentless environment of major city centres, we have an exceptional quality of life here. This is helping to attract some real talent,” Biles adds.
Like Bournemouth, Leeds offers opportunities for businesses to grow, but at a more relaxed pace than bigger cities.
“Moving to Yorkshire has given me the space to breathe deep and think bigger,” says Oonagh Simms, founder of The Marshmallowist, a gourmet marshmallow producer.
“I started my business in London, via Paris, but it’s when I moved back to Leeds that it really grew. There came a tipping point when I wanted to scale the business and needed the space, time and support that I just couldn’t get in London – from the size of our commercial kitchen and the storage space for packing, to the practicalities of getting across town in less than an hour between meetings.”
Leeds ranked 12th out of 32 towns and cities in the CEBR league table of the places small businesses are most likely to experience high growth, and placed 7th for connectivity and transport. The city, and Yorkshire and the Humber in general, are starting to show they’re diverse and aren’t reliant on heavy manufacturing, engineering and the textiles industry. According to the EY research, the region will see growth of 1.4% up until 2020.
Over in the East and West Midlands, growth is predicted to be 1.7% and 1.8% respectively. The industries that will benefit from this include transport and IT, says Stuart Ross, CEO and founder of Nottingham-based consultancy High Growth.
“There are some really ambitious companies seeking and accessing funding through initiatives like the Midlands Engine Investment Fund,” he says. “However, I regularly see a lack of support addressing key skills gaps. Many entrepreneurs simply lack the knowledge of how to develop an effective strategy and scale their business. If they’re going to capitalise on the growth opportunities, they need to ensure they access the right support as well.”
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