It’s official: the economy is in the doldrums, yet London’s business scene is seemingly invincible.
According to new analysis by Creditsafe, 160,000 new businesses are expected to be set up in London by the end of this year.
Despite insolvencies in 2011 being forecast as four per cent higher than in 2010, it’s also estimated that there will be 18 per cent more business start-ups than in 2010.
The figures are based on Companies House records for Q1, Q2 and Q3 2011, which have already produced a net 386,000 increase in registered limited companies; with 2011 as a whole expected to see around 455,000 new businesses added to the UK market after insolvencies are taken into account.
Cast your eye over the figures, and you’ll find that London is leading the way followed by Birmingham, Manchester and Guildford.
Commenting on why businesses choose London over elsewhere, David Knowles, business development director at Creditsafe, told LondonlovesBusiness.com: “London has an indomitable entrepreneurial spirit that looks at a challenge in its face. With lay-offs looming large, Londoners are taking it upon themselves to make a new beginning.
“Given the capital’s status of an economic powerhouse, there is no better place to start up a business than in London. There might be paucity of capital all around, but no other city has angel business investors. In addition to this, the capital’s hosting the Olympics. Therefore, entrepreneurs think that London’s a very lucrative market to set up their business.”
The OECD’s bleak forecast last week predicted that the UK economy will grow by just 0.5 per cent throughout the whole of 2012 due to a low demand for exports and the government’s austerity measures. But at a time where one in 10 Londoners is unemployed, is the likely choice for the next career move really to set up a business?
And why is London likely to have close to 150,000 more businesses set up by the end of this year in comparison to Birmingham, Manchester and Guildford? Here’s what some of London’s businesspeople had to say:
Rob Grimsey,director, Harvey Nash thinks that London entrepreneurs are encashing the world of opportunities that the eurozone crisis has opened up.
“We’ve found that the technology, manufacturing and professional services sector is constantly on the rise. Instead of getting dissuaded by bad news surrounding the economy, Londoners are making use of London’s multiculturalism and coming up with innovative ways to boost their business.
“Take the silicon roundabout for example, you hear of businesses being set up in the tech city everyday despite the eurozone crisis or the fears of a double-dip recession.”
David Brown, co-Founder & CEO of Ve Interactive told LondonlovesBusiness.com:
“The current economy and it’s impact on business is a classic ‘the bigger they are, the harder they fall’ example. More and more people want to take responsibility of their future instead of being at the mercy of employers and there is no better place to set up a business than in London.
“With the way London has businesses popping up, I bet you we’d be held responsible for stimulating growth and reviving the economy in a few months’ time. London being a potpourri of multiculturalism and the best business brains will always have entrepreneurs defying economic downturns and making money.”
Jon Sutcliffe, partner at Kingston Smith LLP, told LondonlovesBusiness.com
“I don’t think these figures take into account the number of companies that have been struck off without any formal insolvency proceedings. However, London sees a proliferation of companies being based here because of the availability of business clusters here.
“Take the number of businesses snapping up addresses in the Tech City for example, businesses want to get as close to the customers as it can get.”
Chris Gee, sales director, SilverDoor told LondonlovesBusiness.com:
“I am not at all surprised to see London leading the way in business start-ups. Just take our location if nothing else; being the centre point between the States and the Far East we’re the East meets West capital. Also, our inherent advantages like infrastructure, transport and a wide base of clients, makes it fairly easy for businesses to be based here and very proudly so.
“We must also give it to the government for doing its bit in cutting red tape, trying to make capital available and launching apprenticeship schemes. That gives us a definitive advantage over other cities.”
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