Entrepreneurial Spirit: could the north be catching the south up?

November 17, 2013 by
Filed under: Adam Lent, Enterprise 

A couple of weeks ago I wrote a post wondering why entrepreneurial spirit is so much greater in the south of the UK than the north.  I’ve now cut the data in a new way and included the recent publication of the Business Population Estimates for 2012 which allows us to compare the last three full years of entrepreneurial activity across the country. What it shows is that while there are more businesses in the south, some parts of the north are displaying a rising entrepreneurial spirit and growing their business populations faster. But the overall picture is rather mixed and complex.

The table below shows how many businesses (registered and unregistered) there were per 10,000 of population for each region and nation over the last three years.  The final column shows percentage growth over that time placed in order of size. It should give a rough idea of whether a region seems to be getting more or less entrepreneurial as we emerge from the deepest recession in many decades.

Business density by UK region and nation

Region         2010

per 10,000 population

2012

per 10,000 population

Growth %
North East 552 633 14.6
West Mids 757 835 10.3
Scotland 673 740 9.9
South West 982 1061 8.0
Yorks/Humber 767 820 6.9
London 1188 1266 6.5
East England 1002 1056 5.3
North West 803 835 3.9
South East 1078 1119 3.8
East Mids 838 844 0.7
Wales 784 753 - 3.9
N Ireland 861 785 - 8.8

 

If you prefer, you can look at the change in the total number of businesses in a region or a nation. The growth percentages are different from the above because of demographic shifts but the shape of the table is largely unchanged with the exception of London which leaps from sixth to third equal place again as a result of demographic change.

Business Population by UK region and nation

Region          2010

000’s

2012

000’s

Growth %
West Mids 333 379 13.8
North East 119 135 13.4
Scotland 290 326 12.4
London 748 841 12.4
South West 427 467 9.3
Yorks/Humber 332 354 6.6
East England 474 505 6.5
North West 453 481 6.1
South East 745 791 6.1
East Mids 307 314 2.2
Wales 193 190 - 1.5
N Ireland 122 113 - 7.3

 

It is notable that four of the six areas in the top half of both tables are northern (assuming the West Midlands counts as northern). Most interestingly, the North East which has the lowest business density in the UK is managing to grow faster than any other part of the UK with the possible exception of the West Midlands – more than twice as fast as the South East in fact which has grown its business population surprisingly slowly since the Crash.

One fascinating thing about these tables is how those regions which have the highest business populations are not necessarily those growing fastest. This rather contradicts the point I made in my earlier post about how the south is favoured by a success breeds success principle.

Unfortunately, the picture is not entirely rosy. The situation in the Midlands is mixed with the West of the region growing apace and the East almost at a standstill. Maybe something excitingly entrepreneurial is happening in Birmingham that isn’t happening in Nottingham and Leicester.

Most worryingly, Wales and particularly Northern Ireland have suffered a shocking decline in entrepreneurialism recently – they are the only two parts of the UK to register a shrinking business population.

So there are some encouraging signs here which may point to the fact that some regions which have found it hard to compete with the south for entrepreneurial spirit are possibly coming out of the prolonged downturn with some gusto.  But it’s far from a good news story everywhere.

Of course this leaves the rather pressing question of why this disparity is emerging. I can only speculate without further research but I’ll leave that to a later post.

 

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The RSA launched its new research project on the rise of micro-business called The Power of Small on 13th November. The project is kindly supported by Etsy.


Comments

  • Wiard Sterk

    These are very basic statistics and could also indicate an increase in self-employment as a result of lay-offs, in particular in the public sector. Whether that counts as a entrepreneurial spirit can be questioned.

    • Adam Lent

      Hi Wiard, Thanks for the comment. I think you should read my last two blog posts. These explain why I don’t think these figures are merely the result of desperate measures by the unemployed (although there may be some element of that) and why the level of business population in a region is a good indicator of its broader economic health which I think suggests that they may be closely related to entrepreneurial spirit.