A decade on since the inception of the Northern Powerhouse Investment Fund, the North of England is experiencing small business growth that outstrips the rest of the UK, according to new insights from GoDaddy.
Of the 50 constituencies with the fastest growing number of small businesses, 20 came from ‘Northern Powerhouse’ areas – twice as many as last year – with only 9 constituencies coming from the South of England.
Places such as Barrow-in-Furness, Burnley, and Birkenhead have seen a significant increase in small business growth compared with last year, indicating a surge in entrepreneurialism.
The new data comes from Venture Forward, GoDaddy’s international research initiative that studies the economic impact of more than 600,000 small businesses in the UK and the attitudes of the owners who start and run them, with every constituency in the UK receiving a ‘Microbusiness Density’ score – the number of microbusinesses per 100 people.
The findings are reinforced by the government’s latest annual ONS statistics, which showed that the North East and North West of England had the highest business ‘birth rate’ (11.7 and 11.6% respectively) in the UK, outside of London.
Barrow-in-Furness emerged as the North’s small business hotspot with its microbusiness density score growing 78% over the past year. The town received a £25m Town Deal in 2022, much of which, with the help of The Cumbria Accelerator Program, went towards supporting residents in opening their own businesses.
Burnley’s microbusiness density score grew by 76%, as it has started to position itself as a disruptive tech cluster, facilitated by Lancashire becoming the site of the UK’s first Digital Skills Partnership.
Birkenhead boasted a growth rate of 74%, supported by programs like Accelerate Wirral, alongside substantial investment in the nearby Baltic Triangle, both of which have helped to propel the constituency into the Top 10.
Also in the Top 20 were Pendle, Darlington and Leeds West – which all saw growth rates above 60%.
The not-so-secret recipe for success
Over a fifth of small business owners (22%) cited funding and access to capital as one of the biggest challenges when setting up their small business.
From small pie shops to cutting-edge therapeutics companies, over £1bn of public and private investment has been poured into the Northern regions since 2014, helping to alleviate these capital concerns. A further £660mn round of Northern Powerhouse investment was launched in March of 2024.
Four in 10 (40%) reported that finding the right technical and practical expertise, and forming the right connections, was a critical challenge in making their small business successful. Institutions like Manchester, Lancaster and Leeds Universities have put significant time and resources into supporting SME enterprise developments, whilst providing a steady stream of talent.
Large infrastructure projects, alongside a concerted push to increase broadband speed and access across the North, may have provided a further boost to regional economies in the North of England, sewing more fertile soil for small businesses to grow and flourish.
A small business can pack a big punch
Small businesses aren’t just good for the economy as a whole, they make a big impact on their doorsteps too. GoDaddy, in partnership with Frontier Economics, found that each additional digital microbusiness is associated with an average increase of approximately five jobs per resident. This would equate to nearly 34,000 new jobs across the top 10 fastest growing small business areas in the UK, and over 18,000 jobs for the Top 10 areas in the North of England.
GoDaddy data also shows that a 10% year-on-year increase in microbusiness density leads to an annual £320 increase in median annual pay for full-time workers.
Andrew Gradon, Head of GoDaddy UK and Ireland, said, “While small businesses flourish across the nation, the North has proven to be a hub of entrepreneurial spirit. A decade on from the introduction of the Northern Powerhouse Investment Fund, the investment is clearly having an impact on the start-up economy.
“Importantly, it proves that being a small business doesn’t mean having small ambitions, nor does it mean small impact. Small businesses will have a key role to play in unlocking the North’s longer-term potential, benefiting the region hugely by providing new jobs and opportunities. However, the same can be said for all areas, because when local entrepreneurship thrives, we all thrive.”
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