1. Economics
December 18, 2015

Q: What do Northampton, Liverpool and Luton have in common? A: Business churn

By Jonn Elledge

The latest instalment of our weekly series, in which we use the Centre for Cities’ data tools to crunch some of the numbers on Britain’s cities.

Over the last couple of weeks we’ve looked at which British cities are producing the highest number of business start ups. We’ve also looked at which are producing the highest number of business failures. The two lists turned out to be, well, pretty much identical:

That’s presumably because both are pretty strongly correlated with the total number of businesses in a city.

But while the correlation between those two numbers is strong, it isn’t perfect (it would be pretty freaky if it was). Some cities, as one would expect have still done better than others.

And there’s a way of quantifying that. The “business churn rate” is the difference between the number of businesses opening and the number closing, expressed as a percentage of the total number of businesses in the city.

In recession years, that figure will be negative: more businesses closed than opened) But 2013 was (no, really) a boom year, so every city on our list had a positive business churn rate.

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Some, nonetheless, did better than others. Here’s the map.

This map is weird. Some of Britain’s boom towns – London, Swindon, Milton Keynes – are among those that have seen the biggest growth. But others (Cambridge, Brighton) are pootling along in the middle of the range. Meanwhile, less affluent cities – Exeter, Liverpool, those of the north east – are also among the highest ranked.

Here’s the top 10 – those cities which saw the biggest growth in their business stock in 2013:

If you can see a pattern here, you’re a better man than I. Please do write in.

And here’s the bottom 10:

There are quite a lot of seaside towns, but otherwise… no, we’re stumped.

One thing is worth drawing attention to, though. The very top of this league table – the city where the growth in business numbers is proportionately highest – is Northampton. That city, you may recall, is spending a lot of money and marketing turning itself into a start up hub.

In 2013, at least, it seemed to be working – substantially more businesses were opening there than closing. That doesn’t mean the policies to make itself “the most enterprising place in Britain to do business” won’t fail. But it does at least mean, as of 2013, it hadn’t failed yet.

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