The UK’s entrepreneurial hotspots revealed » SMEInsider

The UK’s entrepreneurial hotspots revealed

With more than 22,000 businesses launched so far in January alone, entrepreneurship is growing all over the UK – but some of the biggest startup hotspots might surprise you.

According to Startup Britain’s daily tracker, the number of new businesses being set up in Britain has increased every year for the past three years, with a total of 581,173 startups last year, up from 526,466 in 2013. The trend seems to have been triggered by the economic downturn, with many people deciding that, faced with a stagnant job market and diminishing opportunities, they might as well have a crack at going it alone.

At the same time, a wave of new funding opportunities have fuelled entrepreneurial ambitions all over the country. Since 2012, the government has given out 25,000 loans; a figure it wants to take up to 75,000. At the same time, a booming alternative finance market is providing a serious, growing alternative to traditional bank funding. The National Endowment for Science Technology and the Arts (Nesta) reports that this sector has doubled every year since 2012, reaching a value of £1.74 billion in 2014.

So where are these businesses springing up? London, unsurprisingly, is at the top of the pile, with nine of the ten local authority areas ranked highest for new startups located in the capital. But beyond that, according to the Guardian, many of the most entrepreneurial areas in the country are seaside towns, including Brighton & Hove, Poole and Blackpool.

South Buckinghamshire also ranked extremely highly for new businesses, with 49.1 startups for every 1000 people. This is believed to be owing to the presence of a strong business support network and exposure to prominent technology, pharmaceutical, motorsport, film/television, waste and energy industries in the region.

Meanwhile, Birmingham, the UK’s second largest city, reported the highest overall number of new startups outside of the south, but actually has a surprisingly low rate of new business per capita, at just 12.2 startups per 1000 residents. What’s more, whereas strong entrepreneurial culture in cities such as Manchester is shown to spill over into the surrounding areas, the same cannot be said of Birmingham, where new business activity seems constrained to the city and is less apt to spread into the suburbs.

Of course, the launch rate by itself is not cause for celebration – there is no guarantee that a businesses will succeed, especially if it’s being set up out of a lack of alternatives, rather than genuine passion for the venture. Having a huge proportion of the working population switch to running microbusinesses can also create employment volatilities, difficulties in predicting tax income, and other economic concerns, while any small business owner can tell you how hard it is to secure a mortgage, personal loan or even a rental contract when you are self-employed or can’t “prove” your income.

However, as John Mullins, associate professor of management practice in marketing and entrepreneurship at London Business School, points out, there appears to be a seismic shift in the way that many young people view their careers, marking a change in culture that could see small businesses continue to proliferate, even if the traditional job market was to recover.

The millennial generation is increasingly independent and wants to find its own path,” said Mullins. “It’s turned into something young people aspire to.”