1. Economy
December 4, 2015

Britain's unlikely startup capital is… Northampton

By Jonn Elledge

Which is the best city in Britain to start a business, do you think? Is it London, with its silicon roundabout and global market? Up-and-coming and affordable Manchester, at the heart of the northern powerhouse? Aberdeen, because, well, everybody’s rich?

Maybe. But one of the most plausible candidates is also one of the more unlikely. Northampton, a relatively small city in the midlands, has taken to calling itself “The most enterprising place in Britain to do business”.

Obviously a lot of cities like to talk themselves up as great places to live or work. Look at the numbers, though, and it turns out Northampton might actually have a point.

This chart shows the top 10 cities for new business start ups back in 2007. The figures aren’t absolute, but per 10,000 people.

Click to expand.

Generally this is a pretty familiar list for anyone who spends too much time thinking about the British economy. London, Milton Keynes, Reading, Cambridge, are all southern boom towns. Aberdeen has oil. Aldershot has a big army base. Warrington is one of the north’s bigger business hubs. There aren’t really any surprises here.

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Now look at the top 10 in 2013:

Click to expand.

A lot of those places are still there, but there are some new entries, too. Manchester’s boom, it turns out, isn’t just something ministers like to talk about to annoy Liverpool and Birmingham, but has its basis in actual new business figures. A pair of London commuter towns, Southend and Crawley, have popped into the list; perhaps that’s a sign that being within London’s orbit, without its costs, is an increasingly attractive proposition to businesses.

And then there’s Northampton. Which has appeared from nowhere to overtake everywhere except Milton Keynes and the capital. In six years, it’s jumped from 17th to 3rd in this ranking.

How has it done this? Part of it is probably geography. Northampton is within an hour of both London and Birmingham, which no doubt helps. It’s on the main road and rail routes to points north. Effectively, if not literally, it’s in the middle of the country, which no doubt works in its favour.

Btu there’s more to it than that. That “most enterprising place” slogan isn’t just words. Here’s how the city justifies it:

Why? Because of Northamptonshire’s approach to supporting local companies. Support includes rent-free properties and rate rebates to enable the creation of new jobs and apprenticeships, a £5.8 million Growing Places Fund to unlock infrastructure constraints, and expert one-to-one support when you need it.

In other words, Northampton has implemented a programme of actively supporting local businesses. It offers £1,000 grants to local start ups and rebates of up to £20,000 on businesses rates. It’s also, incidentally, been sticking posters all over the tube, telling Londoners how cheap housing in the Northamptonshire (“North Londonshire”) is.

All this seems to have paid off. This chart shows percentage increase in the number of start ups per head between 2007 and 2013. Once again, we’ve only included the top 10.

Click to expand.

Northampton is up nearly 59 per cent in just six years. More, by far, than any other city.

More start ups doesn’t necessarily translate into “more viable businesses” of course – these numbers don’t show how many companies there are folding, moving, or remaining tiny. And it’s hardly a surprise that if you give people £1,000 to start a business, more businesses will get started.

But nonetheless, more start ups, over time, should translate to more viable companies. These numbers suggest that Northampton is doing something right.

That said, there may be other places worth watching – as well as the more predictable names, Leicester, Cardiff and Luton all make appearances in this list. Perhaps these are the Northamptons of the future.

No? Suit yourself.

Here’s, just for the sake of completism, is an interactive map showing how many start-ups per capital launched in every major British city in 2013. Enjoy.

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