NEW DATA FROM ENTERPRISE RESEARCH CENTRE AND GROWTHACCELERATOR REVEALS START-UP SURVIVAL RATES ARE LOWEST IN BRITAIN’S BIG CITIES
BUT CITY START-UPS THAT DO SURVIVE, GROW STRONGEST
JUNE 10, 2014 – LONDON The Enterprise Research Centre (ERC), Britain’s foremost SME growth and entrepreneurship research centre, in partnership with
GrowthAccelerator, has undertaken unique analysis of all 39 Local Economic Areas revealing a complex start-up and growth geography across England.
The report provides a snapshot of growth between 2009 and 2012 based on the following metrics:
• Proportion of fast-growing firms (jobs) in the business population (2009- 2012)
• Net job creation ratios for 2011-2012
• 3-year survival rates of start-ups (2009-2012)
• Proportion of surviving start-ups that reach £1m T/O (2009-2012)
• Proportion of existing £1-2m T/O businesses that grow to £3m T/O (2009- 2012)
The data shows that no one Local Economic Area is strong across all metrics, and that whilst growth may be prevalent in major cities, they are also the some of the trickiest regions in which to survive start-up. Four of Britain’s major cities come bottom of the table when it comes to proportion of employer start-ups that survive three years:
· London – 59.7%
· Greater Birmingham and Solihull – 58.0%
· Greater Manchester – 57.8%
· Liverpool City Region – 53.3%
However, for those that do survive, the proportion of start-ups which grow to £1m turnover in 3 years is at its highest in three of the same cities:
· Black Country – 5.7%
· London – 5.2%
· Greater Manchester – 5.1%
· Liverpool City Region – 5.0%
Outside of the major cities, growth is still prevalent and there are rural and semirural areas which rank highly on some key metrics. Northamptonshire and Leicestershire top the table in terms of net job creation whilst Cornwall and the Isles of Scilly rank highly on 2009 start-ups surviving to 2012.
All GrowthAccelerator businesses undertaking the initial diagnostic process were also asked to cite what they considered to be their main barriers to growth – the major reason, cited in 26 of the 39 LEP areas, was seen to be strategy and management. Only three LEP areas gave finance as their major barrier – two in the North and one in the far South West and the remaining 10 LEPs cited skills and staff as the key issue.
Commenting of the results Professor Mark Hart, Deputy Director at the Enterprise Research Centre and Chair of Small Business and Entrepreneurship at Aston Business School said:”What the findings show is a complex LEP geography which provides a challenge to some of the preconceptions held about ‘hotspots’ of growth across England while confirming others. London occupies one of the top two positions for all the metrics except survival rates of start-ups where it lies in the bottom four.”
Commenting on the results Stephen Peacock, Director of Operations at GrowthAccelerator, said:”These findings support our own research which shows that rapid business growth
can come from anywhere, regardless of sector or location. High growth is not accidental. The success of high growth businesses is largely down to the people that drive them forwards, who have a clear ambition for growth and plan to achieve it. For high growth leaders, getting the right advice, at the right time, from the right expert can also play a vital role in success. “We know that coaching works because businesses supported by GrowthAccelerator have grown on average 32% in the last year. That’s compared to 7% for the average SME in the same period.”
This research brings together data from the ONS UK longitudinal Business Structure Database (BSD), which is based on snapshots from the Inter-Departmental Business Register (IDBR), with data from the initial diagnostic process with GrowthAccelerator 14,000 potential clients.It is the intention of the Enterprise Research Centre and GrowthAccelerator to issue an updated version of this report on an annual basis.
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NOTES TO EDITOR:
About the LEP Growth Dashboard
The LEP Growth Dashboard has been produced to provide baseline metrics on some simple measures of growth in each Local Economic area.The unique longitudinal business demography dataset brings together data from the ONS Business Structure Database, with data from the initial diagnostic process with Growth Accelerator’s 14,000 growth potential clients.The report reflects the latest data available – and offers a snapshot of growth in the deepest and longest recession the UK has seen in the post-war period.
The Enterprise Research Centre (ERC) was established in January 2013 to answer one central question ‘What drives SME Growth?’The Centre aspires to become the international focal point for research, knowledge and expertise on SME growth and entrepreneurship.Focusing around the issues of Small and Medium sized Enterprise (SME) growth, senior academics, researchers and staff undertake research on six key themes: Ambition, Leadership, Diversity, Finance and Governance, Innovation and Export, and Business Demography.
The Enterprise Research Centre is a partnership between 5 University Business Schools: Warwick, Aston, Birmingham, Imperial College and Strathclyde and is funded by the Economic & Social Research Council, the Department of Business, Innovation & Skills, the British Bankers Association and the Technology Strategy Board.
GrowthAccelerator is a service provided by the country’s leading business growth specialists, known for delivering uniquely tailored advice to high-flying businesses –advice that gets hard results. It’s a partnership between private enterprise and government. The service is now supporting over 15,000 businesses in achieving their growth ambitions. www.growthaccelerator.com