Business creation grows in every region of the UK

Each region of the UK posted an increase in the amount of businesses within the £2.5 million to £100 million revenue band during the last year, new figures show.

The Barclays and BGF Entrepreneurs Index finds that the proportion of high-growth companies in the UK rose by 30 per cent in the last 12 months.

In tracking entrepreneurial progress across regions and sectors within the UK, a record 526,446 new businesses were registered – up 7 per cent in 2013 to a total of 2.9 million firms (see infographic below).

Growth has been led by what Barclays and the Business Growth Fund (BGF) describe as ‘old economy’ sectors – namely construction, manufacturing and transport. The largest proportion of high-growth company increase has been noted in the ‘traditional, cyclical industries’, with construction up 55 per cent, manufacturing 47 per cent and transport 37 per cent.

Wales, the Midlands, the North West and East Anglia posted most progress, with each registering over 40 per cent in terms of rise in high-growth companies. In total, five regions out-performed London, with the capital registering 17 per cent growth.

More on company growth in the UK:

Despite the overall positive note, the index shows that share sales are on the decline. Particularly noted amongst smaller businesses situated in the £2.5 million to £5 million turnover bracket, the decline was found to be in the second half of 2013.

Members on the index panel, which includes head of primary markets at the London Stock Exchange Alastair Walmsley, BGF chief executive Stephen Welton and UK Business Angels Association CEO Jenny Tooth, believe that the UK is undergoing a ‘cultural shift’ in the perception of entrepreneurship. Government initiatives to encourage start-ups like the Seed Enterprise Investment Scheme (SEIS), TV show Dragons’ Den and differing in career expectations have all contributed, the panel suggests.

In its Budget statement of 2013, the UK government introduced a policy of allowing the inclusion of companies listed on the Alternative Investment Market (AIM) and other SME equity markets as eligible investments for stocks and shares ISAs.

The  BGF’s Welton says that ‘significant structural changes’ in the economy – through the digital transformation and the increasing reliance on new technologies – are creating a new segment of business, which means there is a lot of opportunity for new companies to start and grow quickly.

‘If you look at the Apple and Android ecosystems for example, and all of the apps that come off the back of that, there is huge innovation going on, and innovation is often better served by smaller companies than large ones,’ he adds.

Commenting on the growing angel investment network, which is supporting business growth through early-stage finance, Tooth says, ‘Business angels are starting to built quite significant firepower, and this also means that they have the capacity to go through multiple rounds of finance through syndication, which enables them to build a really strong platform for high-growth businesses.’

Barclays and BGF Entrepreneurs Index

Hunter Ruthven

Hunter Ruthven

Hunter was the Editor for from 2012 to 2014, before moving on to Caspian Media Ltd to be Editor of Real Business.

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