Aircraft, spacecraft and medical technology make up a large portion of Britain’s export shop. Further future facing exports in the form of analysis tools and computer processors make the UK an attractive place to do business with now, and post-Brexit. The UK also exports a large number of consumer items, such as craft beers, spirits and cosmetics that will form a crucial part of what we have to offer.
Exports are a key part of the UK economy with billions of pounds coming in from a wide range of sectors. Innovative technology is set to be one of the key growth sources for these exports. Innovation from small businesses, especially technology-based firms, will likely be the leaders of this.
In 2018, the number of new businesses registered in the UK grew by 6% compared to 2016, the year that Britain voted to leave the EU. This growth, revealed by Companies Houses, flies in the face of negative Brexit rhetoric just two months before we are due to leave. In response to this, an in-depth analysis of the correlation between Brexit sentiment and regional entrepreneurial attitudes has been released.
- The number of new businesses registered each year in the UK has grown by 6% in 2018
- Of the top five regions with the largest amount of new businesses in 2018, only Birmingham’s new business rate grew quicker than the national average (6.39%)
- Birmingham was the only region within the top five with the largest amount of new businesses who voted to leave the EU with a majority of 0.84%
- The top five regions with the highest new business growth from 2016 to 2018 all voted leave in the EU referendum with at least a 12% majority
- Three of the five regions with the largest leave vote majority have a faster rate of new business growth than the national average (Boston 13.1%, Castle Point 10.5% and Thurrock 14.7%)
- Of the highest remain voting regions in the UK, only East Renfrewshire (8.9%) grew at a faster rate than the national average. Glasgow, who voted remain with a 33% majority, the new business rate fell by 18.5% from 2016
- Across the top 25 regions with the largest amount of new businesses, the largest rate of growth happened across the Midlands (inc Wales), which grew at a rate of 6.77%.
According to the ONS, business investment from Q1 2016 to Q3 2018 only grew by 1.5% with an average amount of investment per quarter of £47.2 million. This is versus a GDP growth in the same period of 4.14% (Q1 2016: £489,736m vs Q3 2018: £ 510,013m; ONS).
Confidence and new business sentiment have long been key to growth and this data reinforces this view, with a general trend of lower business founding rates in those areas who were more likely to vote remain in the EU referendum in 2016. The uncertainty created by the result in those areas looks to have affected the confidence of entrepreneurs as we near the official leave date of 29th March 2019. Conversely, the top five regions with the highest amount of new business growth all voted leave in 2016. Across the country, the new business growth rate was 6%.
Luke Davis, CEO of private investment house IW Capital, has commented on the findings:
“This report demonstrates how the ongoing media furore surrounding Brexit does not represent entrepreneurial attitudes on the ground across the country. The UK continues to be a hotbed of new business ideas and ambitious forward thinkers. The fantastic range of SMEs looking to grow and scale as we approach 29th March is a testament to Britain’s attitude to starting businesses and forging our own paths, as people and as a country as a whole.
Building Brexit resilience has been a keen topic of discussion for the investment community, and these new business attitudes display a robust and ambitious private sector, destined for success in or out of the European Union. Progressive business leaders will look to other opportunities to scale internationally beyond the EU, so now is an exciting time both for the UK’s entrepreneurial economy and entrepreneurs.”