Too many people think London is the only place in Britain worth doing business in. It’s not immediately hard to see why: the capital towers on the global stage and is a central node in the web of world trade. But Britain has many thriving business communities outside of London and the future prosperity of the UK will depend on them.
Management Today’s "The 21 Best Towns and Cities for Business" ranks the UK’s major urban centres, barring London, on how appealing they are as places to set up shop. Focusing on the needs of mid-to-large, talent-hungry, high-productivity firms, we examined towns and cities on various metrics including, among others, productivity, the depth of the talent pool, the strength of innovation, the scale of the private sector ecosystem and the rate of growth.
These results were collated and carefully weighted to ensure fair competition between large and small cities, and each of those that made our initial shortlist of 21 was invited to put its case for winning to an expert panel of judges. After robust deliberation – and much arguing over, in particular, the first and second places – our judges came up with the final ranking.
In a crowded field that provides real grounds for optimism, Manchester was a deserved winner and can add another accolade to those provided by Time Out (‘One of the most exciting cities in the world’) and The Economist (‘The UK’s most liveable city’). The 100,000 students who choose to live there and those that make the city the second most popular destination for graduates in the UK, certainly seem to agree.
And so do investors. As the UK’s leading regional city for attracting foreign direct investment (FDI) and a pilot city for the Local Industrial Strategies (which establish new ways of working between national and local government, and the public and private sectors), Manchester’s industry strengths are centred around tech and emergent sectors, including advanced materials, healthcare analytics, cybersecurity and fintech.
This breadth of innovation is underpinned by a supportive infrastructure, the largest concentration of private equity firms outside of London and world-class university research and industry collaborations. This, in turn, fuels an entrepreneurial culture of spin-offs, start-ups and high-growth SMEs.
The city boasts a number of success stories. The Corridor Manchester Enterprise Zone, for example, is a top five European health innovation district with two universities, five hospitals and the CityLabs research commercialisation accelerator. It forms part of the largest clinical academic campus in Europe and sits within the region’s digitised data ecosystem that has hosted a global pilot for real-world large-scale medical trials. Leading the way with a UK Government High Performance Organisation (HPO) initiative on advanced materials, the city hosts the £60m Graphene Engineering Innovation Centre – a world-first for commercialising applications.
Meanwhile, the fintech sector has grown 50 per cent in the last decade – five times the national average (with strengths in payments, P2P lending and big data risk assessment) – and there is a £10m Cyber Innovation Centre alongside extensive peer networking via organisations such as Pro-Manchester and Manchester Digital. This ecosystem and the city’s strong pro-business proposition has encouraged corporations such as Amazon, Jaguar Land Rover and many others to move there.
"Successful cities today are those offering businesses access to knowledge, in terms of workers, clients, collaborators and competitors," says one of our judges, Paul Swinney from the Centre for Cities. "Manchester in particular is increasingly doing this, and we see the results in terms of the types of businesses now locating there, especially in its city centre."
Ideally placed to capitalise on its location at the heart of the UK and as the ‘Crossroads of the North’– the region will be an even more attractive proposition after the arrival of HS2. It’s what Metro Mayor Andy Burham means when he says: "There’s certainly a sense of stars aligning."
Manchester has redoubled its efforts to reduce carbon emissions in line with the science-based targets set out in the Paris Climate Agreement. It is now at the forefront of world cities leading on this issue.
Bristol may not have taken the top spot, but it comes a very close second. The judges were impressed with the dynamic culture of talent and innovation that has established Bristol’s reputation as a sustainable, forward-thinking city with a highly skilled workforce, which drives economic growth and enhances productivity.
With 54 per cent of the workforce educated to at least degree level, the city’s submission highlighted a diverse business sector, which is rich in world-leading expertise, particularly in environmental technologies, high tech, aerospace and advanced engineering, media, and financial and professional services.
Recognised as the second largest digital tech cluster outside London, with a turnover of £8.1bn, and the third largest UK media hub outside London and Manchester, Bristol’s innovative output is featured around the world (it is one of three hub locations for the BBC and home to the Oscar-winning Aardman Animation, creators of Wallace and Gromit). Channel 4 has also announced Bristol will host one of its creative hubs.
A partnership between the city’s business and public sector community and driven by a directly elected mayor, Bristol’s One City Plan sets out ambitious targets for the future up to 2050. One example is City Leap, a series of energy and infrastructure investment opportunities that aim to decarbonise the city.
Business growth is encouraged via the innovative Engine Shed co-working space and SETSquared, an enterprise partnership between regional universities that turns ideas into thriving companies and has been twice ranked as the global number one university business incubator.
Connected by air to most major international cities and just over 80 minutes from London by train, Bristol is a major port with worldwide trade links, home to a growing population of more than 450,000 (among which at least 91 different languages are spoken) and regularly tops polls as the UK’s most liveable city.
Temple Quarter – one of the largest urban regeneration projects in the UK – is a ‘once in a generation opportunity to shape a new city quarter’ and aims to deliver 22,000 jobs, 10,000+ homes and a world-class campus for the University of Bristol.
With three million residents in the metropolitan area, 1.5 million jobs and a £66.5bn economic output, Leeds already has a strong foundation on which to build, benefiting from some of the fastest growing firms in the UK. The city favours a dynamic approach that fosters collaboration between industry, researchers, clinicians and public sector leaders – this boosts larger businesses and attracts inward investment.
Inclusive Growth Strategy sets out ’12 Big Ideas’ to transform the economy with the accent on developing a compassionate city and working together across all sectors to create better jobs, tackle low pay and boost productivity. The ideas include backing innovators and entrepreneurs in business and social enterprises; and delivering transformational change across the city (Leeds is half way through a £10bn transformation programme intended to double the size of the city centre and build a rail station for HS2).
This will build on the city’s international reputation and world leading capabilities in digital healthcare innovation, medical technologies, robot design and construction (the University of Leeds hosts the national facility for Innovative Robotic Systems) as well as a growing digital and creative sector, demonstrated by the siting of the UK’s only independent Internet Exchange outside London and Channel 4 choosing Leeds for its new HQ. Sky’s national technology centre of expertise is also based in the city.
Leeds has the UK’s largest financial services cluster outside the capital, with 30 national and international banks based in the city. Emerging fintech and cybersecurity sub-sectors are creating new opportunities.
A world-class academic offering and bold data-driven agenda lie at the heart of modern Edinburgh’s regional economy. The city has grown 12.5 per cent in the past ten years, excels in data science, cyber security, robotics and stem cell research, and enjoys one of the highest rates of successful business start-ups in the UK.
The workforce is highly skilled – almost half (42 per cent) of all graduates from the city’s four universities choose to stay after graduation – and the city benefits from an enviable quality of life. It was named the best city to live in the world in the Arcadis 2018 Sustainability Cities Index, as well as the UK’s most walkable city in 2017 (55 per cent of residents use the bus, cycle or walk as their main mode of travel).
The Data-Driven Innovation (DDI) initiative is part of the £1.3bn Edinburgh and South East Scotland City Region Deal that aims to train 100,000 people to create the data capital of Europe.
Proximity to Heathrow and London is a major selling point – it’s just 25 minutes from Paddington and the future western terminus of Crossrail – but Reading is a top business location in its own right. It has an ambitious vision for its future, is one of the top 25 European cities for FDI and has long-standing clusters in IT, pharma, finance and professional services. The Reading Central Business Improvement District drives sustainable growth and the quality of life attracts talent – Reading has the highest wages outside London and 20 per cent of Reading University graduates join the local workforce.
Over £7m has been invested over the last decade in the Reading Central Business Improvement District, with another now planned for the Abbey Quarter.
The Glasgow city region can claim to be the economic powerhouse of Scotland. Generating over £43.5 billion Gross Value Added (GVA) in 2018, it is home to more than a third of all Scottish jobs and the fastest growing major city economy in the UK.
It has a diverse business and industry base and has identified the growth of SMEs in particular to be a key contributing factor in achieving the aim outlined in the Economic Strategy 2016-2013 of having the most productive urban economy in the UK by 2023. To support this it hopes to create a collaborative – and unrivalled – network of business support, engaging the public, private and education sectors.
The council is working with suppliers to help SMEs access specialist support. This will include an unranked framework of suppliers and a referral programme to encourage collaboration.
This is a young city (the majority under 35) with the UK’s fastest growing population. Recent development has seen key growth sectors and internationally competitive clusters emerge in the financial, creative, life sciences and advanced manufacturing sectors, with some of the UK’s leading businesses in these sectors calling Cardiff home.
Being a capital city, business has the Welsh Government on the doorstep and a host of national organisations and HQs to support various activities. Continued investment in infrastructure (such as the £1bn South Wales Metro) and regeneration has put Cardiff at the forefront of UK cities as an investment location.
Based on 2018 figures, 48 per cent of Cardiff’s workforce are qualified to NVQ4 level or above. It had the highest ranking for a UK core city in the Global Talent Competitiveness Index 2018.
8. Milton Keynes
Originally designed for large scale growth and as an ‘urban utopia’ for housing, business and leisure mid-way between London and Birmingham, on Milton Keynes (MK) can boast the third highest number of businesses per head and the third highest GVA per worker of all British cities, as well as one of the highest start-up rates – fuelled by local business incubation initiatives and access to the Midlands Engine Investment Fund. Sustainable mobility is an area of focus. MK Council and Cranfield University are developing MK:U – a business-sponsored university due to open in 2023, offering STEM subjects and the skills that local employers require in order to grow.
Population growth, a large catchment area (more than 18 million people within an hour away) and potential for new development means exceptional growth opportunities for business.
With a population of 1.13 million, the city already has the second biggest economy in the UK after London. Professional and financial services, advanced manufacturing and the digital economy are vital sectors. The West Midlands secured a record 171 FDI projects in 2017-18, and created 9,424 new jobs – the only region to see an increase in both figures.
Birmingham is home to the second largest number of tech start-up accelerator and incubator hubs in the UK, as well as the Silicon Canal, Innovation Birmingham Campus, Custard Factory and Steamhouse innovative spaces. HS2 will place the region at the heart of the UK’s transport network, while hosting the 2022 Commonwealth Games has the potential to deliver unprecedented levels of economic growth.
The tech and digital sector is the fourth largest cluster outside London, employing more than 100,000 people.
The Liverpool city region elected its first Metro Mayor two years ago to drive prosperity, encourage innovation, strengthen partnerships and expand opportunities. It has since secured greater powers and funding to invest directly into business, skills, transport and infrastructure, with numerous successful initiatives such as the Growth Hub (SME business support) and the Business Growth Grant.
Regeneration projects worth £14bn are in the pipeline in a city that is already home to major global brands and a world leader in sectors as diverse as maritime and logistics, health and life sciences, energy and the environment, creative, digital and tech, and advanced manufacturing and engineering.
Liverpool’s Pall Mall development will deliver 400,000 sq ft of grade A office space, while Paddington Village is a landmark £1bn expansion site, creating 1.8m sq ft of science, technology, education and health space.
Less than an hour from London by train and set to benefit from the new A14 motorway section next year, Cambridge is connected to both international markets and, via one of the world’s leading universities, top-class human capital. The city is Europe’s largest technology cluster.
Around 57,000 people are employed by the 1,500 technology-based firms in the area, with a combined annual revenue of over £13 billion. It leads in machine learning and AI, information technology, life sciences, gaming, and food and drink industries. Microsoft’s European research HQ is in the city – as are Amazon, Apple and many more.
The ‘Cambridge Phenomenon’ has seen an explosion of globally significant companies and innovations in tech, life sciences and service companies since 1960, with networking and peer support in the business community.
The Brighton and Hove local economy has grown to over £7bn in the last year, fuelled by the rise of new industries (creative and digital) and strong consolidation in others (tourism and retail). With 35,000 students, there is a huge pool of highly skilled and well-trained individuals to attract expanding businesses or start-ups – of which the city has one of the highest rates in the UK.
Plans for the Edward Street Quarter, Hove Station site and Sackville Trading Estate will deliver much-needed office space for SMEs to grow and develop, while the year-round cultural offering makes the city an attractive proposition for both employees and visitors.
The Economic Partnership is a 50+ strong group of CEOs from the private, public and voluntary sectors that shapes the city’s economic strategy and works closely with the Coast to Capital Local Enterprise Partnership.
Slough now boasts the youngest population in the UK, with the education system producing results in the top ten nationally. It has more corporate headquarters than Scotland, Wales and Northern Ireland put together, a strong manufacturing base and an impressive business start-up rate.
The town is just 15 minutes from London Paddington (with Crossrail due in 2020), three motorways are within easy reach and Heathrow is on the doorstep. The Slough Urban Renewal project has brought leisure facilities, homes and a new cultural centre, while plans for the future include a mixed-use redevelopment in the heart of Slough costing over £300m.
Slough is the most productive urban area in the UK (Centre for Cities, 2019) and home to the largest trading estate in Europe – 500 businesses employing 20,000 employees.
Described recently by one major investor as the ‘last uptapped city in the UK’, Nottingham is entering a new era of development, with office, residential, retail and leisure schemes set to transform the city centre.
Nottingham already boasts a strong ecosystem, including a variety of tech hubs and co-working spaces, two universities (centres of excellence in aerospace, cancer research, Industry 4.0, data analytics and food science) and a high quality workforce of over 1.1 million people. The birthplace of both Ibuprofen and the MRI scanner, the city remains at the cutting edge of health innovation.
BioCity is the UK’s largest bio-incubator facility and supports businesses in legal, patenting, banking and finance, across disciplines including drug discovery, medical devices and pharmaceutical development.
Over the past decade Southampton has risen steadily through the league tables for growth, confirming itself as the economic powerhouse of England’s South coast. Network Eagle Lab, an innovative co-working concept, provides business start-up and scale-up space for entrepreneurs and students of two world-class universities.
As the city undergoes an ambitious scheme of regeneration (£3bn investment since 2012), the council’s vision is that every aspect of Southampton will be connected and accessible, both the digital infrastructure and the physical environment, showcasing a maritime port that is also a clean, green, tech-focused smart city.
Southampton’s GVA grew by 2.6 per cent in the second quarter of 2018, according to the most recent UK Powerhouse report, with employment up 1.9 per cent.
The regional capital of North East England, Newcastle is one of the UK’s core cities and an integral part of the Northern Powerhouse. It has been ranked one of the top British cities for scale-up tech investment, the UK’s best city to work in and the Best University City for three years running. It is also one of the UK’s more cost-effective cities to do business, with property 68 per cent cheaper than London.
Invest Newcastle supports an ecosystem of creative, digital, tech, corporate, healthcare and life science sectors. The business offer is all about ideas, energy and the brand new world of data, with all the transport infrastructure you would expect from a major European city.
The North Sea Connect project will bring vast digital infrastructure to the area and, via existing subsea networks, give Newcastle the UK’s best connections to businesses in America and Europe.
The vision for Bournemouth, Christchurch and Poole, an area of 400,000 residents which, since April, has come under one unitary authority, is to be a 21st century digital city-region by the sea. Development investment since 2013 has reached £1bn, actively encouraged and facilitated by the council, which is also investing in digital and transport infrastructure.
There is a strong engineering and advanced manufacturing sector clustered around the Port of Poole and Bournemouth International Airport worth £1.2bn a year, while JP Morgan, Vitality, BNY Mellon and others are part of the most cost competitive financial services location in the UK. The Business Growth Programme delivers support, advice and grant funding for SMEs.
Tech Nation rated the area as number one for high-growth digital tech businesses in 2017 and recorded growth in digital-tech jobs of 25 per cent between 2014 and 2017.
The Office for National Statistics found the Cheshire and Warrington economy has grown faster than anywhere else in England, while the latter is one of only 14 UK towns or cities in defined as ‘high wage and low welfare’, with 79.8 per cent of its population in employment.
The Warrington Means Business masterplan is helping drive forward projects in excess of £750 million, including the major regeneration and evolution of the town centre, alongside other measures such as the future development of commercial property in the Enterprise Zone. The local business base is diverse, but is particularly strong in energy (specifically nuclear), engineering, logistics and software.
A new business bank, Redwood, is supporting the local economy through secured lending to local SMEs, as well as national businesses.
Perhaps best known as an oil and gas hub, Aberdeen is at the forefront of the global energy transition to a lower carbon world. It is also an important centre for life sciences, with world-leading health research, and home to many global food and drink brands.
Although its maritime heritage remains central (ongoing investments include £350m at Aberdeen Harbour and £50m at Peterhead Port), the city has moved seamlessly into scientific, engineering, digital and low carbon specialisms. The £826m City Region Deal signed in 2016 is a key example of stakeholders in the region working collaboratively on diversifying and securing the regional economy, while £8bn+ of public and private infrastructure investment is due to be delivered before 2030.
Centre for Cities data shows Aberdeen ranked fourth in the UK in 2017 for the percentage of the working age population with higher level qualifications.
A growing and diverse city, the 2018 Good Growth for Cities Index on urban economic wellbeing placed Leicester tenth out of 42 UK cities and described it as one of the most improved. In recent years, joined up thinking and innovative partnerships between local government and the private sector have provided for investment and jobs, such as the 5,000 positions (plus 1,000 apprenticeships) created through IBM’s Client Innovation Centre, Hastings Direct, Mattioli Woods and Octopus Energy choosing Leicester as a base.
The excellent universities in the local area provide a talent pipeline of 15,000 graduates every year for businesses and a skilled workforce across a range of sectors and levels.
The emerging Space Park and Waterside Enterprise Zone (including a technology hub around the National Space Centre) are transforming the city.
Traditionally a centre for footwear and leather making, Northampton continues to show its prominence in manufacturing, but has diversified in recent years and, in 2018, business advice service Informi ranked it as the third best place to start a small business. This is partly down to its location at the heart of the UK, but also affordability, a strong business community working with a pool of highly skilled workers and great connectivity (there are five international airports within an hour).
Northampton is home to the largest urban Enterprise Zone in the UK, and although some of the government assistance ended in 2018, the area continues to benefit from increased marketing and infrastructure development.
In 2018, the new £330m University of Northampton Waterside Campus opened on the edge of the town centre, further improving links to higher education
for the business community.
Image credit: J3Mrs/Wikipedia (Creative Commons)