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Where is the best place in the UK to start a new business? You may be surprised to hear it isn’t London. London serves as an excellent center for many industries, but rental prices and associative high labor costs to hire in the region give a poor survival rate to new businesses that need to consolidate cash in their first years and not waste it on basic operating costs.
The capital’s success may not be its downfall, but it has given a competitive advantage to other UK cities which compete with each other to offer the best internet speeds, knowledge, rental prices, and quality of environment. But which one is the best to start a new business?
Brexit has not dented the UK’s core competitive advantages in terms of infrastructure, innovation hubs, and, more than anything else, talented and educated people. These vary in excellency across the country and the top competitors for healthy business incubation offer different advantages that catch the eye of prospective start-ups.
Some cities like Reading and Swindon simply remain close to the resources of London but at a fraction of the costs. They are within two hours of the capital. Brighton similarly ranks high on many lists for its hour proximity to London and its lower rates of cyber attacks.
Internet speed can matter more than distance to London however. Cities like Sheffield have become attractive for their faster speeds in comparison to other cities. But while internet speed and cyber security are important concerns for launching a modern business, other factors seem to favor talent and price as the two most important factors for a new company.
The two best ingredients for a healthy business culture throughout all locations in the UK appear to be first, access to a high class local university to attract talent, and second, low office rents in which to house the skilled team. Edinburgh, Leeds, and York all boast this mixture of young, cheaper talent and high grade office space at an affordable price. They still fall short of number one, however.
A round of applause for the city of Cambridge please. Numerous studies in the past two years have declared the historic university town to be the best in the United Kingdom to start a business. It narrowly beats Oxford for first place, which has similar attributes contributing to its favor with start-ups, especially in the technology industry.
Cambridge offers obvious advantages for launching a new business even without glancing at the data to prove it. The city is built around the talent it produces at its first class university. Highly skilled and educated graduates are happy to stay for the city’s comfortable culture and quality of living and the links established by graduates for decades in business worldwide serve the city’s new and established companies well. Physical transport links to the rest of the UK are another factor in its conduciveness to business.
Like Edinburgh and Leeds, the city has low office rents that encourage entrepreneur graduates to stay and talent hungry firms to locate near them. Perhaps most attractive to prospective companies is the number 65.2. That’s the survival rate of start-ups in the city; more than 5% higher than Oxford and Leeds, and 10% more than Edinburgh.
Though the accolades may rightly go to the city of Cambridge, its new found fortunes seem to point to a new direction in the future of the UK economy as a whole. For one thing, the knowledge economy is here to stay. Cities thrive off of the skilled graduates produced by their universities and benefit from the cyclical research between these knowledge hubs and budding businesses. Supportive cultures contributing to an industry niche are the result.
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The other important factor to take note of is that price matters once again. Higher costs in London are pushing innovation nationwide to places where budgets can go toward better purposes than high overhead. The success of Cambridge could in fact herald a new chapter in the UK economy: one in which development is more evenly balanced and regions left behind by deindustrialization and globalization can flourish once again with new business in new industry frontiers.