For business owners seeking the best growth hotspots, being sent to Coventry might be just what they need to learn about creating jobs, and when it comes to growing a multimillion-pound turnover, entrepreneurs are better off basing themselves in Belfast and Aberdeen than London.
The surprising findings are revealed in new research published by the Enterprise Research Centre in its annual UK local growth hotspots dashboard.
It shows that the Midlands city and surrounding Warwickshire beat London into second place in the job creation stakes. Firms in the area created 23, 432 new jobs in 2014-15, the largest number as a proportion of total jobs of any Local Enterprise Partnership (LEP) area, at 7.5 per cent – ahead of London’s 4.0 per cent (although London still created the highest number of jobs, 165, 540).
Northern Ireland growing quickly
Meanwhile, the fastest-growing start-ups are found in Northern Ireland. In Belfast, 4.4 per cent of companies with starting revenues of less than £500,000 reached £1 million turnover over the three-year period 2012-15, more than double the UK average of 1.8 per cent. And for established businesses growing further to £3 million+ turnover, North East Scotland led the pack, with 11.5 per cent of firms reaching this milestone against a UK average of 6.2 per cent.
ERC, a consortium of leading university business schools, is the top UK research institute on the drivers behind private sector firm growth. The Dashboard provides the most comprehensive picture of growth among small to medium sized enterprises (SMEs), which make up 99 per cent of all UK firms. Its key findings will be unveiled at ERC’s third annual State of Small Business Britain conference today [Nov 30th] at The Shard in London.
This year’s conference is focused on the importance of boosting inclusive growth and productivity nationwide in the wake of the Brexit vote. Last week, Chancellor Philip Hammond highlighted the UK’s poor productivity levels, saying that UK average productivity was 30 percentage points behind the US and Germany.
Entrepreneurs need stability
Professor Mark Hart, deputy director of ERC, thinks that what we see in the growth hotspots dashboard is that firm growth and job creation is spread right across the UK and is not limited to a few cities or regions.
‘This is incredibly important to understand if we’re going to create an industrial strategy that capitalises on the strengths we already have without over-focusing on star firms, or regions labelled as ‘powerhouses’.’
Prof Hart adds, ‘While the Brexit vote has created uncertainty for SMEs, our research shows that the most innovative firms find ways to grow despite shocks to the economy – chiefly by focusing on their productivity and looking to export markets to provide new opportunities.
‘The growth hotspot dashboard shows us that we have broad-based growth across the UK. The challenge now is for the government to make the terms of our disengagement and future relationship with the EU clear so that entrepreneurs have a stable framework for further expansion.’