Edinburgh is second only to London in the UK when it comes to the most attractive cities to set up a new business, according to a new report out today.
Scotland’s capital is ranked higher than cities including Manchester and Leeds when it comes to establishing ‘high growth’ companies – 45 per cent of which were found to be in the tech sector.
The rating came from the ‘Unlocking Growth’ report produced by Barclays Eagle Labs and Beauhurst exploring the importance of public and private sector partnerships in creating strong local technology ecosystems in which businesses can start and scale successfully.
It looked at the role of universities, accelerator programmes and business incubators, coupled with investment sources such as angel or private equity investors.
The report looks at the critical role technology ecosystems play in supporting high-growth firms and boosting local economies. Local authority areas that are home to 100 or more high-growth companies have an average Gross Value Added (GVA) per person of £138,000, compared to £22,000 for those with less than 100.
According to the data, Edinburgh has 621 high growth businesses, with 280 of those in the tech sector. Sharein, a tech company that provides investment businesses with a platform that they can use to receive investments directly from their networks, is an example of a firm that has benefited from that ecosystem. Founded by Jude Cook and Andrew Pickett, ShareIn have been residents at the CodeBase business incubator since its launch in 2014 and have remained headquartered in the startup hub after it became home to the first Barclays Eagle Lab in Scotland in 2018.
Jon Hope, director of Eagle Labs, said: “Our mission at Barclays Eagle Labs is to help support entrepreneurs and high-growth start-ups by providing them the tools they need to grow their business and by bringing together a range of actors to help nurture and grow local tech ecosystems. “Every region in the UK has the presence of at least one high-growth technology cluster. However, data from Beauhurst found that seven out of the top ten local authorities by number of high-growth tech companies were in London. We hope that with support from networks like Eagle Labs, towns and cities throughout the country can reap the benefits that strong local tech ecosystems can provide.”
Chris Philp, digital minister, said: “Business is booming in Edinburgh and as these brilliant new figures show the city is rapidly becoming one of the UK’s leading technology hubs.
“Capitalising on the huge potential of tech to create jobs and wealth is a crucial part of our mission to level up, so we are backing businesses across Scotland with pro-innovation policies and supporting people to get the skills they need to succeed in this dynamic industry.”
In Edinburgh, investors made £940m in total equity investment in tech companies since 2011, universities have produced 83 spinout businesses commercialising university research and there are a range of business incubator and accelerator programmes. This is in addition to local government intervention in allocating funding, for example through Invest Edinburgh, the city council’s investment arm and the Edinburgh and the South-East Scotland City Deal.
The Edinburgh Eagle Lab is just one of a growing network of business incubator spaces that supports 28 ecosystems across the UK, providing mentoring and networking opportunities, business support, and a regular programme of events, both in person and virtually during the pandemic. To date, the labs have supported nearly 4,000 businesses, which combined, have secured 614 equity deals since 2011, raising on average £1.45m each equity fundraising round. The Edinburgh Eagle Lab is soon to be joined by two more locations in Scotland, at the HALO Enterprise and Innovation Hub in Kilmarnock and at the new Barclays campus in Tradeston, Glasgow.
|Local authorities outside of London with the highest number of high-growth businesses
|Number of high-growth businesses
|Number of high-growth tech businesses
|City of Edinburgh
|City of Bristol
|Brighton and Hove