Research suggests that sky-high rent and relatively low employment levels mean London is not a 'top location' for growing businesses.
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Location, location, location; geography has always been an important factor for businesses, indeed choosing the right spot can be the difference between success and failure.
The right environment can place organisations in the best possible position to serve their customers, expand their reach, add to the bottom line, or literally ensure they are in the right place at the right time.
There are a number of factors when considering what makes a city ‘business ready’, and our recent study, analysing a range of government and third party data to rank 10 major UK cites, threw up a number of surprises. For a start, Cambridge was named ‘best UK city for business’, closely followed by Oxford and Brighton.
Is the Capital losing its grip?
Long hailed as the epicentre of business activities, it may come as a shock that London failed to make it into the overall top three. However, when delving deeper into the research the results become painfully obvious. Who, for example, is surprised to hear that London office rent prices are the highest in the country?
Or that employment rate is low in comparison to other cities? However, despite being hailed as a hub for new businesses, the UK capital could only manage ninth place when it came to start-up survival rate. A combination of the aforementioned factors, plus the high concentration of already established businesses is clearly hampering start-up survival chances.
Rise of the ‘Northern Powerhouse’
While southern cities still dominate the overall rankings list, the findings highlight a number of areas in which the North is flourishing.
For example, York came out on top for start-up survival rate, helped by schemes such as the Whyte Knight Fund, which gives organisations the financial help and support that they need to establish themselves in the market. With so many start-ups vying for business, it could be argued that the North inspires and helps nurture the sort of entrepreneurial spirit that finds it difficult to survive in the capital.
Silicon Roundabout: London's tech scene is still the envy of Europe
Flying the flag still further for the ‘Northern Powerhouse’, Leeds was also placed highly, ranking number one when it comes to access to graduate talent. With this thriving start-up culture in the North, cheaper rent and lower crime rates, the region is well placed to attract skilled workers.
And, in an environment where access to the right skills is still a challenge, the North is putting itself at an advantage.
For tech, London remains Top Dog
Despite the great start-up culture, both Leeds and York subsequently took the bottom two places when it came to average internet download speed. Having access to a fast and reliable internet connection is extremely important to all businesses – especially now that every organisation is expected to be ‘digital by default’.
Although clearly not holding these cities back, this could be an issue that will need to be addressed if the North wishes to fully establish itself as a tech hub, or to compare with more favourably endowed regions of the UK. Both Northern cities ranked low when it came to their ability to combat cyber security issues.
It is in this space that London comes into its own, with the capital emerging as the most resilient location when it came to combating cyber security breaches. With Silicon Roundabout hosting almost eight times as many tech firms as anywhere else in the UK, it seems that London is still making good use of its technology talent.
Ultimately, it seems that there is no such thing as the perfect location for business, with the findings showing room for improvement and investment in some area for every region in the UK.
With the complex IT landscape facing UK businesses today, it is unrealistic to expect one region to excel on all fronts. In order to succeed businesses should seek to work with experienced partners to help them identify and plug any gaps they may have. No matter the city in which they might be based.