The UK's poorest areas could drive UK growth

Max Firth from Experian talks about how 'champion' businesses can help growth in some of the least resilient areas of England

Some of the UK's poorest areas have the best potential for economic growth, according to research for the BBC.

The North East, Yorkshire and Humber, badly hit by the downturn, were found to have the highest proportion of fast-growing, export-focused firms.

The research by Experian also shows a sharp increase in the number of companies in the East of England.

England saw its business base grow, while Scotland's stagnated and Wales' and Northern Ireland's shrank.

Economic snapshots

The study looked at the number of businesses operating in all local authorities in the UK between 2010 and 2012, and found sharply differing fortunes across the country.

In about 70% of all local authorities across the UK, the absolute number of businesses did actually increase.

Max Firth, managing director of business information services at Experian, said "there are really really good pockets of entrepreneurial, potentially successful businesses across the UK, not just in the South East, they are spread across the UK... they are spread geographically and across all sectors".

But some areas suffered sharp losses. Knowsley in Merseyside saw more than 2,500 companies disappear - down from 6,610 firms to just 4,070 over the two-year period - which is equivalent to a fall of more than 21% per year.

Hounslow in London, Shepway in the South East and Warrington in the North West were England's other poor performers.

Belfast saw its business base drop 9.1%.

BBC LOCAL GROWTH RESEARCH

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Overall, England's regions saw the most business growth, gaining 0.5% more companies.

Scotland's business base more-or-less stagnated, up just 0.1%, while in Wales the number of companies fell by 0.3%. Northern Ireland however was worst off, with the number of firms down on average by 3.3% during the period.

Quality of growth

However, the number of companies trading can provide only limited insight into economic prospects, and the Experian research, commissioned by BBC English Regions, also looked in closer detail at the quality of growth across England.

The analysts at Experian examined the size and growth prospects of companies, and whether they explored global markets.

Some of England's most economically challenged regions also have the highest concentration of what Experian calls "business champions", firms that have big economic potential, with the North East, Yorkshire and the Humber in the lead.

Middlesbrough, for example, is one of the top five areas teeming with these companies, alongside Forest Heath and St Edmundsbury in Suffolk, Norwich, and Chesterfield.

  • This map ranks each local authority district in the UK based upon average annual growth in its business base between 2010 and 2012.
    It provides an indication of the health of a local area as it takes into account start ups and insolvencies.
    Growth has been witnessed in around two thirds of local authorities right across the UK, with top performers Harlow and Newham in the South East.
  • This map ranks each local authority district in the UK based upon average annual growth in its business base between 2010 and 2012.
    It provides an indication of the health of a local area as it takes into account start ups and insolvencies.
    Growth has been witnessed in around two thirds of local authorities right across the UK, with top performers Harlow and Newham in the South East.
  • This map ranks each local authority district in England based upon the proportion of employment it has in sectors with growth potential - which include finance, insurance and pensions, real estate, professional services, computing and information services.
    Given the location of these industries, we anticipate that sector led growth will largely come from the South East and London.
  • This map ranks each local authority district in England based upon the proportion of employment it has in sectors with growth potential - which include finance, insurance and pensions, real estate, professional services, computing and information services.
    Given the location of these industries, we anticipate that sector led growth will largely come from the South East and London.
  • This map ranks each local authority district in England based upon their exports.The South East and London have the highest proportion of exporting businesses, supported by the strong transport networks within and surrounding the capital, including key international airports.
    But research suggests there are opportunities right across England for businesses to boost their exports and support the rebalancing of the UK.
  • This map ranks each local authority district in England based upon their exports.The South East and London have the highest proportion of exporting businesses, supported by the strong transport networks within and surrounding the capital, including key international airports.
    But research suggests there are opportunities right across England for businesses to boost their exports and support the rebalancing of the UK.
Download full data [145KB]

Correction: An earlier version of the story wrongly suggested that the business base in Wales grew 0.3%. In fact the number of companies fell by 0.3% during the period.

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