In the six months following the result of the EU referendum, London saw a 13 per cent decline in the number of new start-ups, while other European cities experienced an upsurge in new enterprises, according to analysis published today by global business intelligence experts, Creditsafe.
The research, which reveals Berlin is progressing towards replacing London as the post-Brexit start-up capital of Europe, compared the six-months following the EU referendum to the corresponding period of July 2015 to January 2016.
The figures reveal that Berlin is significantly outpacing several other European cities when it comes to growth in active businesses, experiencing a 9 per cent increase, higher than Paris (4 per cent), Dublin (1 per cent) and London (-13 per cent).
The findings also show that London did see the highest total number of new businesses, with 105,356 companies registered between July 2016 and January 2017. This is significantly higher than both Paris (36,438) and Berlin (13,294), although the growing start-up scene in Dublin also recorded a small growth in its start-up culture post Brexit, with the number of active businesses increasing by 57 to 11,599.
Rachel Mainwaring, operations director at Creditsafe, comments, ‘Our findings show that Berlin is following through on its threat to tempt start-ups and replace London as the post-Brexit start-up capital. Paris and Dublin are also driving their start-up cultures forward, while the city of London, widely renowned for its enterprise, has witnessed a slowdown post Brexit vote.
‘It was arguably inevitable that in the short term there would be fewer start-ups in London following the result of the EU referendum and ensuing uncertainty, but the capital does appear to be at risk of falling behind the likes of Berlin and Paris. While these cities still have some way to go to surpass London as a start-up hub, these figures suggest they are doing everything they can to create an environment to nurture and encourage start-up enterprises.’
Rachel adds, ‘Chancellor Philip Hammond outlined in his recent Budget that he wants the UK to be the best place in the world to start and grow a business. If the downward trend our research highlights is to end and London is to retain its strong start-up culture now that Article 50 has been triggered, strong government backing of start-ups will be required.’
Further reading on London start-ups
