The phrase “Northern Powerhouse” has been uttered frequently in recent weeks, in reference to the Chancellor’s initiative to boost prosperity in the region and rebalance the UK economy away from the south east.
So it’s apt that the latest research by IT services provider, Sungard Availability Services, which set out to identify the UK’s ten most business-friendly cities, reveals that four of the best are in the north. Spoiler alert: London didn’t even make the top three.
The study analysed various factors that influence affordability and access to talent and resources on employers’ doorsteps, and crowned Cambridge – known as “Silicon Fen” for its density of high-tech firms and enterprise zones – the number one UK city for business.
With office space in London going for an average of £406 per square foot, it’s hardly surprising that cities like Edinburgh (£66/sq ft), York (£90/sq ft) and Sheffield (£128/sq ft) 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. And served by four universities, Leeds ranked highest for graduate population, assuring local employers of a steady stream of skilled recruits.
York came out on top for start-up survival rates (with London trailing in ninth place), thanks to the availability of infrastructure, skilled employees and support schemes to help fledgling businesses take off. Initiatives such as the Whyte Knight fund provide matched, unsecured loans for start-ups and small businesses, with a low fixed interest rate and mentoring to help entrepreneurs reach their potential.
However, the Viking city and its northern compatriot, Leeds, came bottom of the table for internet connectivity, with average download speeds of just 19 Mbps. Sheffield, Leeds and York also fared poorly when it came to combating cyber threats. In today’s ‘digital by default’ culture, high-speed internet provision and cyber-security need to be addressed if northern cities are to fully establish themselves as tech hubs to rival Shoreditch.
With a thriving start-up culture and lower overheads, the North is fast becoming a hotbed of business activity, making the rationale for starting a company in the capital far less compelling.