The number of new businesses created in the North West of England grew by 19% last year – outpacing the 15% average across the UK overall – according to figures gathered by private equity firm ECI Partners.
North West-based entrepreneurs launched a total of 43,255 new businesses in 2020/21, up 19% on the 36,290 created in 2019/20.
The figures, based on Office for National Statistics (ONS) data, reflect how businesses – particularly technology startups – have increasingly located outside of London and the South East of England.
It comes as London’s population is set to decline for the first time in more than 30 years. Many businesses across multiple industries are seeing the benefits of relocating to other areas in the UK, such as lower operational costs.
“It is fantastic to see the North West of England leading the way in new business formations, providing further proof of the strong entrepreneurial spirit which is characteristic of the region,” said Mark Keeley, partner in the ECI Manchester office.
Manchester has invested substantially in attracting entrepreneurs and creating a business ecosystem, helping it become one of Europe’s fastest-growing tech hubs. The region is already home to six (43%) of the UK’s 14 digital unicorns. Some of the notable companies in the city include The Hut Group, The Very Group, Peak and Mojo Mortgages.
Liverpool is also proving to be a popular North West England city for business.
Elsewhere, banks such as HSBC and Deutsche Bank have opened their base in Birmingham, the West Midlands, where costs are as much as 35% lower than London.
“The North West has a long-standing and well-earned reputation for being a great place for businesses to set up and grow,” added Keeley. “Having established itself as a hotbed for innovation and economic growth, and with the Government promising significant funding as part of the Northern Powerhouse initiative, I believe that the future looks bright for the region’s entrepreneurs.”