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Region inspires start-ups and pulls in the company executives

Written by Tony Quested

Thursday, 03 July 2008

The East of England’s pulling power in terms of attracting new companies and business executives has been underlined in two surveys.

Barclays estimates that there were 98,000 new start-up businesses in England and Wales in the first quarter of 2008. Though down on the record figures of 2006-early 2007, they are the highest in the last three quarters, reflecting the resilience of business start-ups.

The number of start-ups and closures were also roughly the same for this quarter (99,900 closures), compared to previous quarters in which there were significantly greater numbers of closures (Q4 2007: start-ups 86,400, closures 111,900).

The most popular industries for start-ups were business and financial services (27,500 start-ups), construction (15,100) and the retail sector (10,700).

In the East of England, around 8,900 businesses opened their doors in the first quarter of 2008, with business and financial services the most popular sector (2,400) followed by construction (1,400).

Stewart O’Dell, sales performance manager for Barclays Local Business Eastern, said: “Small business entrepreneurs are finding opportunities in the market place. They are entering in reduced numbers, reflecting an uncertainty over short-term economic prospects, but clearly there’s a feeling there is never a bad time to start a good business.”

Estimates on the contribution of non-UK nationals to small businesses indicate that 10 per cent of mainstream businesses and 15 per cent of start-ups in 2007 involved an owner-manager from outside the UK (9 per cent in the East).

“These figures show the great contribution being made to the UK economy by non-UK nationals,” said O’Dell. “There is a lot of skilled labour going into these start-ups - for instance, in the health, education, and social work sectors, where over one in six start-ups have involvement from non-UK nationals.

“Unsurprisingly, the greatest contribution of these individuals to the business market is in London, where last year they were involved in nearly 30 per cent of SMEs and more than 35 per cent of start-ups. They also play an important role in the business life of a number of urban areas outside of the capital.”

The other major sectors to benefit from the involvement of non-UK nationals include the construction, wholesale, retail, hotels and catering and business services industries sectors.

Separate research via The KDB Annual Survey of UK Company Directors 2008 has found that more and more company directors are choosing to live in towns in East England despite a nationwide migration from the South of England to more northerly regions, as well as Scotland and Wales.

The 2.83 million company directors in the UK make a disproportionate contribution to both local and national economies. Despite making up just 6 per cent of the adult population, they contribute one-third of income tax revenue and more than £5.7 billion in council tax.

As a result, they serve as a strong indication of the vitality of local economies.

Between 2004-07, the survey found that the percentage of the adult population in Milton Keynes who are company directors rose to 6.9 per cent, the figure in Peterborough was up to 5.1 per cent, in Colchester it increased to 5.9 per cent, in Ipswich to 4.5 per cent and in Norwich to 4.2 per cent.

The only negative results in the survey for East England was the fall in the figures in Cambridge to 3.7 per cent and a slight drop in East Anglia to 5.5 per cent.

While London still has the highest density of company directors in the country (10.4 per cent of the adult population), the South East (8.1 per cent) saw the biggest fall in the proportion of the population who are company directors with the figures for the South Coast (6.4 per cent), East Anglia (5.5 per cent) and South West (5.7 per cent) dropping as well. In contrast, the North East (4.2 per cent), North West (5.1 per cent), Wales (3.9 per cent) and Scotland (4 per cent) all saw their proportions grow.