Bradford, Leicester and Coventry among the best places to start a business due to their strong growth factors 12 Dec 2017 09:25 Barclays’ SME Growth Factors Index measures the strength of 12 key ‘growth factors’ essential to business productivity Bradford, Leicester and Coventry benefit from strong growth factors such as low commercial rent, high business rate relief and broadband speed Bradford, Leicester and Coventry are among the best cities in the UK in which to start a business, according to Barclays’ SME Growth Factors Index1, with some of the best growth environments for small businesses to grow and flourish. The Index, created by Barclays Business Banking, reflects the strength of 12 key growth factors2 such as business rate relief, infrastructure, broadband speed and labour productivity, which are essential to boosting business productivity and growth. Analysing the 20 largest cities by population size across the UK3, the index ranks each city based on the strength of each factor. The cities with the top growth environments for UK start-ups are: Bradford Leicester Coventry Edinburgh Liverpool Bradford, Leicester, and Coventry – the best growth environments for businesses Bradford was ranked highest overall, with the best business rate relief, road infrastructure, number of job vacancies, cost of commercial rent, and business survival rate4. Leicester featured in second place thanks to its strong business survival rate, distance travelled to work and level of business rate relief. Coventry came in third place, with the highest net migration into the city. Highest concentration of start-ups is currently in London, Birmingham and Leeds Additional Barclays analysis5 reveals London, Birmingham and Leeds – areas with the highest populations – have seen the highest number of business start-ups over the last six years. In the capital, almost 577,000 start-up businesses have launched since 2012, while Birmingham has seen 45,000 new businesses, and there have been 26,400 in Leeds. Yet when it comes to the strength of the growth factors in these cities, the results are less positive. London gives out some of the smallest amounts of business rate relief and has the highest commercial rent costs, appearing 12th on the overall list of 20 cities. Similarly, Birmingham features in 11th place, let down by its road infrastructure and poor quality of life, while Leeds ranks in 18th place, also as a result of its poor road infrastructure. In comparison, just 16,800 of businesses have started in Bradford since 2012, 13,200 in Coventry, and 15,300 in Leicester – yet they have the strongest growth factors which are key to business productivity and growth. Ian Rand, CEO of Barclays Business Banking, commented: “It’s really encouraging to see that so many areas offering growth potential are outside of London and the South East. We undertook this study because we support small companies right across the country, and are keen to help more people start and grow businesses wherever opportunities exist. “Entrepreneurs need to consider the market for their particular company, but an environment that supports growth can make a real difference. The growth factors identified by the research can become even more valuable when small companies start looking to scale up and grow, which is something we particularly encourage.” Notes to editors 1 Barclays’ SME Growth Factors Index - methodology Conducted by Opinium Research in October and November 2017, the Barclays SME Growth Factors Index examines 12 different indicators to establish which cities across the UK have the best environment for new start-ups. Each city is given a score for each indicator between 0 and 100, where 0 means they performed the worst and 100 means they performed the best on this indicator. These scores were averaged out to provide one overall score for each city, and then they were ranked from the highest to the lowest score, with Bradford coming top. 2 The 12 key growth factors Growth factors Definition Business rates Proportion of business rates not collected due to reliefs Broadband speed Proportion with super-fast and ultra-fast broadband Skilled workforce Proportion of graduates Population growth Net internal migration to/from the city as a proportion of the original population Road infrastructure Number of vehicles that pass any given point on the road network Distanced travelled to work Average number of kilometres travelled to work Labour productivity Value of produce created per hour of work Job vacancies Number of roles on offer per the working age population. Based on the assumption that unfilled but available roles are bad for start-ups Commercial rent Rateable value per square metre Quality of life Life satisfaction score Business churn rate Proportion of businesses surviving after their first year Increase in business stock Increase in total number of businesses 3 The top 20 biggest cities by population size – ONS https://www.ons.gov.uk/releases/populationestimatesforukenglandandwalesscotlandandnorthernirelandmid2016 London Birmingham Leeds Glasgow Sheffield Manchester Bradford Edinburgh Liverpool Bristol Cardiff Coventry Leicester Belfast Wakefield Nottingham Doncaster Newcastle upon Tyne Brighton and Hove Sunderland 4 Strongest growth factors by city Ranking City Strongest growth factor 1 Bradford Business rate relief (#1) Road infrastructure (#1) Job vacancies (#1) Commercial rent (#1) 2 Leicester Distance travelled to work (#1) Business survival rate (#1) 3 Coventry Net migration (#1) 4 Edinburgh Qualified workforce (#1) Quality of life (#1) 5 Liverpool Road infrastructure (#3) 6 Brighton and Hove Broadband speed (#1) 7 Sunderland Job vacancies (#3) Business survival rate (#3) Broadband speed (#3- joint) 8 Cardiff Broadband speed (#3 – joint) 9 Nottingham Net migration (#3) Broadband speed (#3 – joint) 10 Belfast Broadband speed (#1) 11 Birmingham Increasing business stock (#2) 12 London Labour productivity (#1) 13 Bristol Distance travelled to work (#3) 14 Glasgow Net migration (#4) 15 Sheffield Road infrastructure (#2) 16 Manchester Increasing business stock (#4) 17 Wakefield Commercial rent (#4) 18 Leeds Labour productivity (#7) 19 Newcastle upon Tyne Road infrastructure (#6) 20 Doncaster Increase in business stock (#1) 5 Barclays data on the number of start-up businesses launching in the UK’s top 20 most populated cities between 2012 and 2017. About Barclays Barclays is a transatlantic consumer and wholesale bank with global reach, offering products and services across personal, corporate and investment banking, credit cards and wealth management, with a strong presence in our two home markets of the UK and the US.With over 325 years of history and expertise in banking, Barclays operates in over 40 countries and employs approximately 85,000 people. Barclays moves, lends, invests and protects money for customers and clients worldwide. For further information about Barclays, please visit our website www.home.barclays .