Bournemouth tops list of new startup locations

Bournemouth tops the league of the UK’s 50 largest towns and cities for the biggest growth in the number of new businesses in the last year. In joint second place are Milton Keynes, Northampton and London, according to UHY Hacker Young, the national accounting group.

A net total of 13 new businesses for every 10,000 resident adults are set up per year in Bournemouth, with 12 in London, Milton Keynes and Northampton compared to an average of 6.14. Bolton, Aberdeen, Poole, Telford and Bristol were not far behind the leaders with 11 each.

The accountancy group compared the number of VAT registrations against the number of VAT deregistrations to measure the net growth of new businesses within the UK’s 50 largest towns and cities.

According to the research nearly a half of the 50 cities surveyed (44%) are seeing a decline or a zero growth in the number of new VAT registered businesses created. Among the last-in-class are Stoke-on-Trent with a net loss of 6 businesses per 10,000 resident adults and Southend-on-Sea with a net loss of 5. Overall, the number of new businesses in the UK market grew by 2.39%.

Reasons for Bournemouth’s business startup success

Commenting on Bournemouth’s success, Marc Waterman, Partner at UHY Hacker Young, says: “What has propelled Bournemouth and its conurbation to one of the most prosperous areas of the UK is its ability to capitalise on the trends in modern business activity.”

“The emerging creative industries in particular have received a recent boost with the development of an incubator centre at the Arts Institute. Together with Bournemouth University, it has earned the seaside town the international recognition as a centre of learning excellence providing knowledge-based employment opportunities.”

“Having a core of young people in the area also helps counter the traditional perception of Bournemouth as a retirement town. Its new cosmopolitan image provides strong links to companies, as international business students are an important client and employee group. This trend has also added enormously to its popularity as a leisure destination.”

“Bournemouth’s position as a popular location for banks to locate their back offices has also spurred business creation.”

"It doesn't surprise us that Bournemouth is the UK's leading town for business creation," says Professor Nick Petford, Pro-Vice-Chancellor Research and Enterprise at Bournemouth University. "The synergy we share with the business community in Dorset is helping to develop start-ups and new business ideas in an environment that fosters innovation and creativity.

Last year alone, the University's overall activities helped to increase local economic output by £172.5 million, improving local income levels by some £36.1 million and supporting the creation of some 1,055 full-time equivalent jobs throughout all sectors of the local economies."

The research shows that businesses in the South are doing fairly well and a couple of Northern cities, i.e. Aberdeen and Bolton, are starting to follow the positive trend as well.

Marc Waterman comments: “Aberdeen is in an exceptional position because of oil and gas but generally it is the low wage rates and cheaper office rents that first attract major companies to relocate to such cities. A skilled local workforce, a high quality of life and a good network of transport including local international airports also add to the list of advantages.”

“Strong presence of leading companies in financial services, IT and telecom and, in Aberdeen, oil and gas then leads to a number of smaller businesses setting up to feed into these industries.”

Why Stoke-on-Trent and Southend-on-Sea are last-in-class

On the other hand, UHY Hacker Young’s research reveals that the number of businesses based in Stoke-on-Trent is declining rapidly.

Marc Waterman says: “While Stoke-on-Trent has managed to attract the financial and professional service sectors, it is still trying to reinvent itself because its manufacturing base has been taken overseas.”

“Wholesale, Retail and Construction are also struggling, with independent retailers failing to compete with new retail developments and a general slowdown in the construction industry.”

According to UHY Hacker Young Southend-on-Sea is also seeing a sharp decline in the number of local businesses.

Marc Waterman comments: “With a few exceptions such as Bournemouth the UK’s costal towns have generally become quite deprived as budget airlines have made international holidays even more affordable. Many seaside towns have failed to come up with new business ideas as the tourism industry has waned.”

“Its proximity to London has meant that a large proportion of Southend-on-Sea’s skilled workers and professionals are commuting to London instead of setting up their own businesses.” Waterman adds.