The index created by Octopus Investments used factors that SMEs rate as the most important for expansion – including access to finance, connectivity, talent and skills, affordability, and forecasts for jobs – in 32 towns and cities in the UK.
Manchester was ranked a close second to London, found the Urban Hub League Table, with Cardiff and Edinburgh in third and fourth place.
North east falls behind north west
There was a clear east-west divide in the north of England: Liverpool came in fifth, joining its north west counterpart Manchester in the top five, but eastern locations Hull, York, Newcastle and Middlesbrough all floundered in the bottom 10.
Poor demography and skills pushed the Northern Ireland capital, Belfast, into 21st position.
Simon Rogerson, CEO of Octopus Investments, said: “It is exciting to see that there are towns and cities right across the UK that have the potential to support the next generation of HGSBs and benefit from the HGSB effect.
“These businesses are vital to our economic prosperity and there is untapped opportunity in every corner of the UK.”