Founding a start-up is famously risky yet rewarding. And with business start-up and death rates in London being the highest in the UK, many businesses have resisted the urge to pack up and move to the capital, seeing the merits of regional business ecosystems.
With office space in London going for an average of £406 per square foot, it’s hardly surprising that cities like Edinburgh (£66 per square foot), York (£90 per square foot) and Sheffield (£128 per square foot) are luring start-ups away from the capital, allowing them to allocate more cash to growth than London firms that have to contend with higher property and staffing costs.
Of course, London boasts an excellent transport network and an enviably-stocked talent pool. But redevelopment and investment in roads and high-speed railways to link cities in the North are set to strengthen the regional economy and could soon tip the scales for entrepreneurs looking for an affordable base.
Looking specifically at London, recruitment firm Talentful has dug into years of data to determine the best boroughs for technology start-up companies to make it in their early years.
In order to work out which borough offered the best chances of taking a start-up from an idea into a reality, the researcg looked at the survival rate of registered tech start-ups in their first year.
Among these, the best was Havering, where over nine in ten of new tech companies made it past the one year mark.
Other survival factors shown in the guide include the proportion of the local workforce with degrees (who could offer specialist skills), broadband speed (vital in technology-focused companies) and local desk space rental.
Rather than being centred on London’s famed Silicon Roundabout, the sites for success are instead further away from mid-London. With lower costs and higher broadband speeds, you should think about starting your company in:
- Havering – Though Havering has a low proportion of graduates in the available workforce (only 26 per cent), it maintains the highest start-up survival rate in London, with 91.5 per cent of tech start-ups making it through their first year intact.
- Hillingdon – Hillingdon had the cheapest average office rental space in London at only £174.79 a month for desk space, making it a good option for those looking to keep costs low.
- Redbridge – Nearly 45 per cent of the workforce in Redbridge had a degree, making it good recruitment territory, though it failed to claim the top spot due to a midrange rental cost (£312.50).
- Merton – 88.21 per cent of tech companies based in Merton survived their first year – and 58 per cent of the available workers were university graduates.
- Richmond upon Thames – Richmond had the best broadband in London, with 34.7 MB/s (the lowest had only 19.3 MB/s), making it an excellent situation for a technology company.
Talentful sifted through data for each of the London boroughs and the City of London, and compared a complete list of start-ups in 2014 and found how many of them survived until 2015. The infographic below was created using the surviving fraction of the total founded as a survival rate.
Broadband speed was found through a dedicated tool. Graduate workforce was found from government data.
Desk space rental was found through Gumtree. The most and expensive desk spaces were found for each location and an average was taken. In the two locations where data was not available, an average was taken from the other locations researched.
Each metric was assigned a score between 1 and 10. The scores for each location in each metric were then combined into a single weighted average, which was used to rank the locations.