A new report out today from Barclays Eagle Labs and Beauhurst reveals the top cities for the number of high-growth businesses outside of London as Edinburgh, Manchester and Leeds top the list.
The ‘Unlocking Growth’ report looks at the critical role technology ecosystems play in supporting high-growth firms and boosting local economies. Local authority areas that are home to 100 or more high-growth companies have an average Gross Value Added (GVA) per person of £138,000, compared to £22,000 for those with less than 100.
The report explores the importance of public and private sector partnerships in creating strong local ecosystems in which businesses can start and scale successfully. Universities, accelerator programmes and business incubators, coupled with investment sources such as angel or private equity investors, are the key to generating growth.
Edinburgh tops the list for the number of high-growth businesses outside of London, with 621 calling the city home, 280 of which are technology companies.
In Edinburgh, investors made £940m in total equity investment in tech companies since 2011, universities have produced 83 spin out businesses commercialising university research and there is a range of business incubator and accelerator programmes. This is in addition to local government intervention in allocating funding, for example through Invest Edinburgh, the Council’s investment arm and the Edinburgh and the South-East Scotland City Deal.
Manchester comes second in the list for the number of high-growth businesses outside of London, with 508 calling the city home, 209 of which are technology companies.
In the Greater Manchester region, investors made £1.7bn in total equity investment in tech companies since 2011, universities have produced 53 spinout businesses commercialising university research and there is a range of business incubator and accelerator programmes. This is in addition to local government intervention in allocating funding, for example the investment in the Manchester Digital Innovation and Security Hub (DISH), supported by the Greater Manchester Combined Authority through the Local Growth Fund. The physical hub is due to open next year and will be operated by a consortium led by Barclays Eagle Labs, with the objective of driving growth and innovation in the digital and cyber security ecosystem in Greater Manchester.
The Digital Innovation and Security Hub will add to the growing network of Eagle Labs business incubator spaces that supports 28 ecosystems across the UK, providing mentoring and networking opportunities, business support, and a regular programme of events, both in person and virtually during the pandemic. To date, Eagle Labs have supported nearly 4,000 businesses, which combined, have secured 614 equity deals since 2011, raising on average £1.45m each equity fundraising round.
Chris Philp, Digital Minister, said: “Capitalising on the huge potential of tech to create jobs and wealth is a crucial part of our mission to level up, so we are backing businesses across the UK with pro-innovation policies and supporting people to get the skills they need to succeed in this dynamic industry.”
Jon Hope, Director of Eagle Labs, said: “Our mission at Barclays Eagle Labs is to help support entrepreneurs and high-growth start-ups by providing them the tools they need to grow their business and by bringing together a range of actors to help nurture and grow local tech ecosystems.
“Every region in the UK has the presence of at least one high-growth technology cluster. However, data from Beauhurst found that seven out of the top ten local authorities by number of high-growth tech companies were in London. We hope that with support from networks like Eagle Labs, towns and cities throughout the country can reap the benefits that strong local tech ecosystems can provide.”
Irene Graham, CEO of the ScaleUp Institute, said: "Since its inception, the ScaleUp Institute has focused on the importance of fostering vibrant local ecosystems to support scaleup companies - and the job opportunities and economic growth that this will drive.
"Effective ecosystems consist of a combination of actors working collaboratively to harness resources to foster their local scaleup opportunities, they include local government, investors, entrepreneurs, corporates, and anchor institutions like universities. Providing tailored growth support for the scaling businesses in these ecosystems is critical.
"This report picks up many of the ScaleUp Institute's themes and recommendations for driving local scaleup growth. No matter the sector, we know that key drivers of local growth are access to skilled talent, clusters and investment alongside a collaborative, joined up ecosystem."