A report from Barclays Wealth and BGF Entrepreneurs Index has revealed that in the last 12 months London is still leading Britain’s entrepreneurial drive.
The UK saw the total number of active firms jumping by more than 90,000 from the end of 2012 to June 2013 with London seeing a further 12,000 active firms in operation equating to a 3.5 per cent rise to 372,340.
North West saw a 0.5 per cent rise in the number of enterprises – joint third highest increase in the UK alongside East Anglia.
The South East was placed at number two with a 0.6 per cent rise.
The report is the first to track activity levels throughout the UK of the entrepreneurial life cycle, including start-ups, growth and share sales now home to 206,815 enterprises. It saw the success as being down to the global nature of London’s economy as well as the stability in its government, along with the fact that entrepreneurs no longer need finance to start their firms. It established that eight per cent of startups needed no money to set up their business, while another 49 per cent needed less than £2000.
Start-up activity is on the up
Companies House data shows a steady, albeit modest, growth in the number of active companies, which has increased by 3% or more in each six month period since the start of 2012.
Proportion of high growth companies is rising
The percentage of high growth companies among those with turnover between £2.5m to £100m is increasing and is now higher than it has been since 2009. The proportion of these companies is rising in every region of the UK.
Share sales subdued, but decline slows
Share sale activity in successful, growing companies is still muted as the number with shares changing hands fell 11.2% in H1 2013 compared to H1 2012, although less steeply than in the previous period (when it fell 13.1%). However, the average size of deals in H1 2013 is increasing — the average share change now stands at 47% of total shareholding, up from 29% in H1 2012 — with an indication that more deals are in the pipeline.
Service sector boom
There has been a noticeable increase in high growth business services companies — from 19% of their total number in 2011 to 22% in 2012. The proportion of high growth finance companies also saw an increase from 20% to 22.4% over the same period. Share sales among growing finance companies rose steeply, up by more than 100% in H1 2013 compared with H1 2012.
Companies in the primary and utilities sector flourish
More than 1,200 mining, quarrying and utilities companies were formed between 2012 and 2013, an increase of 13%, taking the number to 10,285. Share sales in this sector are also up markedly, from 52 to 100, a rise of 92% in H1 2013.
London, the Midlands & Yorkshire and Humberside set the pace
London saw the highest percentage increase in the total number of enterprises between 2012 and 2013 (up 3.5%) from an already high base. While share sales are declining in most UK regions, London has one of the least sharp falls. Yorkshire & Humberside and the Midlands have the greatest proportion, and fastest rise, of high growth companies, with nearly one in four companies meeting this criteria