Most people probably think of the UK as “London and then the rest”, as though everything outside the capital is virtually insignificant. This perception may be fuelled by the success of the City, which is arguably the world’s most powerful financial centre. However, according to a new study, the overwhelming majority of the most dynamic, fastest-growing businesses in the UK are actually headquartered outside London.
Of the 1,000 companies listed in the annual 1,000 Companies to Inspire Britain report, conducted by the London Stock Exchange Group (LSEG) in association with DueDil, 78% were based in “the regions”, as they are often euphemistically called. With 36 companies based in Greater Manchester, the report recognises it as a “stand-out city”, followed by Leeds and Aberdeen, home to 16 companies each. London’s representation of 217 companies represents an 8% fall from last year, while there are 25% more companies represented from Wales and Northern Ireland. Scottish companies were reported to be the fastest-growing, enjoying revenue growth of over 80%.
According to the report, 1,000 businesses enjoyed average annual growth of 50% between 2011 and 2015. Among the fastest-growing business sectors were real estate, which enjoyed annual revenue growth of 123%, and financial services, which expanded revenues at 82% a year. However, based purely on the volume of companies operating in a sector, tech has enjoyed the fastest growth. There are now 31% more firms in the technology industry than in 2010.
Xavier Rolet, chief executive of the London Stock Exchange Group, said: “High growth SMEs are the driving force behind the UK economy, developing the skills, jobs and growth we need. But ambition alone is not enough; their success must be highlighted and their growth properly supported with appropriate finance.”
George Osborne, chancellor of the exchequer, added: “These companies are the backbone of the British economy. They create high-quality, well paid jobs, innovate and drive economic growth. This government fully understands the need to support ambitious entrepreneurs and ensure they can access the finance they need to grow.”
With London commercial rents at sky-high rates, it is unsurprising that many elite businesses are based in the regions, particularly as technology is now making a physical office less important.