Home Business NewsBusiness Success for London’s entrepreneurs, but uncertainty lies ahead

Success for London’s entrepreneurs, but uncertainty lies ahead

20th Mar 18 3:41 pm

According to the latest Barclays Entrepreneurs Index

Instability has come to be a buzzword over the past year, with Britain’s economic future seeming uncertain to many, and especially to the UK’s entrepreneurs and small businesses. Despite this, London has once again bucked the national trend, to come out on top of the annual Barclays Entrepreneurs Index.

The Index has been tracking the UK entrepreneurial lifecycle since 2011 and its latest results reveal that while the picture for young businesses across the UK is mixed, the capital stands out as the number one driver of entrepreneurial activity.

London sets the standard

London continues to showcase its entrepreneurial spirit, leading the pack with a 9% increase year-on-year in the number of high-growth companies based in the region. The Index also revealed that the capital now accounts for 37% of the UK’s total number of high-growth-companies.

The city also stands out as a leader in attracting private equity investment, having the highest ratio of private equity-backed companies to all companies (0.38) in the country.

Alongside the increase in high-growth companies and private-equity investment levels, London also experienced a boost in expansion funding, which increased dramatically from £332 million in 2015 to £742 million in 2016. While the number of companies receiving this funding has decreased in total, the amount of funding has grown by 70% year-on-year.

Cause for concern?

Despite leading the pack when it comes to private equity investment and high-growth companies, London has not been immune to the challenges affecting entrepreneurship over the past year. It has seen a decrease in venture capital funding year-on-year by 53%. This has led to London seeing its lowest levels of venture capital investment since 2011, reflecting a general decline at the national level.

A mixed national picture

The number of new enterprises being created across the UK is 8% higher than the previous year. There has also been an upward spike in mergers and acquisitions.

However, this is tempered by lower growth levels among young enterprises. The number of high-growth companies has dropped to an unprecedented low nationally, falling 33% lower than its peak in 2013. Furthermore, in contrast to the successes of London, the number of companies receiving venture capital investment at a national level has fallen to its lowest level in the history of the Barclays Entrepreneurs Index.

More success for the capital city

London’s success has helped the Entrepreneurs Index to see its strongest levels of entrepreneurial outputs since the annual research began in 2011. The capital has demonstrated real resilience through a year of uncertainty, and this is a cause for celebration. Challenges and uncertainty will of course continue for both the city and the nation in the year ahead. As such, it is more important than ever to foster an environment that helps London’s entrepreneurs navigate this ever-changing business landscape.

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