Despite fears that a no-deal Brexit could damage UK startup prospects, many of the UK’s cities are now emerging as hubs for tech and other cutting-edge areas of business.
Due to the growth of the digital economy, and improved connectivity allowing business to be conducted remotely, cities outside of London are now able to compete on the startup scene.
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Europe’s largest merchant services provider Paymentsense has revealed its pick of the top 15 UK cities for starting a business. And surprisingly, London does not come out on top.
The ranking is based on a number of factors essential for business success, including business survival rates, weekly salary, average rent, population and the number of employed adults in the area.
From this, it generated an index score out of five and determine a final ranking from one to 15.
Despite accounting for roughly 30% of UK GDP and having one fifth of the UK’s tech business, London ranked lowest on the list, probably due the average monthly cost to rent a 1-bed city centre apartment is significantly higher than other UK cities at £1,705.35. Speedy rail connections and the growing acceptance of remote working has meant that other cities have emerged as cost-effective alternatives for business.
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By GlobalDataHonourable mentions include Scotland’s capital Edinburgh, which ranked in the top ten due to scientific research, higher education and financial services contributing a significant portion to the local economy, and Welsh capital Cardiff, home of Wales’s main business and financial services centre and a thriving media sector, which came in in seventh place.
Here’s the top five UK cities to start a business in 2019:
5. Bristol
With substantial growth in creative media, electronics and aerospace, Bristol has emerged as a major city for UK start-ups with the likes of Bristol Robotics Laboratory and other cutting-edge companies putting the city on the UK startup map.
In 2017, Bristol was named the UK’s leading smart city, along with London, demonstrating that the city is keeping up in terms of smart technology.
The five-year start-up survival rate in the city is 44.8%, the highest on the list, with the £111,960,515.60 available per week making Bristol an attractive option for those starting a business.
However, the average monthly cost to rent a one-bed city centre apartment is £828.75, higher than most other cities on the list, meaning it has not earned the top spot on the UK startup ranking.
Index score out of 5: 2.38
4. Leicester
Traditionally known for textiles, the city’s commerce now comes from the engineering, retail and food and drink sectors. In recent years, Leicester has also seen growth in the high-tech industry.
According to a study by business information firm DueDil, Leicester is the second best place in the UK to start a business in 2017, with a 34.45% growth in the number of new businesses.
A survey by Simply Business also revealed that the city has the third highest number of female entrepreneurs, indicating that companies are doing their bit to promote gender equality.
Paymentsense gave the city a five-year start-up survival rate of 40.5%, however the average weekly pay for full-time workers is lower than some other cities on the list at £487.90.
Index score out of 5: 2.42
3. Sunderland
With more than £30m invested in startups in the North East in the first half of 2018, the tech and healthcare fields have seen growth. However, Sunderland’s success is largely helped by Nissan Motor Manufacturing, which is the biggest employer in the region.
According to Tech Nation, jobs in digital tech rose by 26% from 2014 to 2017 in the city, with the number of tech businesses experiencing the largest growth out of any UK city in the same year, due in part to fast broadband and cheaper rent.
With a population of 335,415, it may be smaller than some cities on the list, but a five-year start-up survival rate of 41.9% has earned Sunderland third place on the list.
Index score out of 5: 2.46
2. Nottingham
Nottingham is home to many major companies, while other businesses could benefit from the Nottingham Enterprise Zone and Creative Quarter. Digital media, life sciences, low-carbon technologies, finance, retail and leisure are also major contributors to Nottingham’s economy.
With more than half of the city’s residents under 30, as well as being one of the UK’s six Science Cities, Nottingham also benefits from access to young talent.
Index score out of 5: 2.66
1. Sheffield
In 2019, Sheffield is the best UK city where you could start a business. Known for its industrial heritage, Sheffield develops advanced manufacturing technologies through its two universities and other research organisations. It’s also a major centre for sport.
With tech sector growth potential of 70%, according to Tech City, Sheffield is only set to grow over the next few years, coming out on top in Sellics’ list of the ten best places to launch a digital business in the UK.
With a five-year start-up survival rate of 44.9%, and a substantial £123,502,306.20 available per week, the city has a vibrant startup ecosystem.
Index score out of 5: 2.7
The full list can be viewed here.
