Sheffield and Nottingham top London for launching online business
While London retains a reputation for leading in all areas of the UK’s business scene, it is lagging when it comes to fostering new online businesses. Thanks to their lower cost of living, it is easier to set up an online venture quickly in Sheffield and Nottingham in particular, with a new survey finding the capital languishing in 13th on these grounds.
The multicultural city of London is renowned as a leading city both in the UK economy, and internationally. It hosts some of the most vibrant, innovative and most profitable companies in the world, while boasting a growing number of ties to the world’s other corporate hot-spots. However, while the UK capital might be a global financial hub on par with the likes of New York, London’s infamously high cost of living is pricing future talent out of the market.
A recent report from Grant Thornton found that structural failures are seeing London facing a Millennial exodus in the coming years. According to that study, a possible 545,000 young Londoners intend to exit the city in the next 12 months, with the most commonly cited reasons being extortionate rent prices and higher than average costs of living. Meanwhile, this also saw 51% of young people elsewhere in the UK denounce the capital, and state that they have no desire to move to the city to live or work.
Now, research from Amazon software platform Sellics has found that London is lagging behind other major UK cities in terms of enabling people to establish online businesses. The study looked at 22 factors relating to the online venture infrastructure, and the cost of both living and launching a business to determine the best cities for launching an online business. OECD nations were analysed by the firm according to their available business infrastructure statistics, in order to determine a final list of top locations. London failed to break into the top 10 at both a national and international level.
Instead, it was Sheffield and Nottingham which excelled in particular. While lower living costs and quicker set-up times saw Canadian cities Quebec and Winnipeg top the 10 best cities internationally for establishing an online business, those cities scored a lower overall score than Sheffield and Nottingham. In fact, all the British cities to feature in the international top ten (also including Leicester, Glasgow and Liverpool) all outscored their global rivals on this basis.
London, alongside the likes of New York and LA, failed to make it into the upper echelons of this ranking. It turns out that America is far from ideal for launching online ventures to that end. The highest-ranked U.S. city is Detroit, 34, a stark comparison to cities found north of the border, in Canada.
Explaining this, Sellics CEO Franz Jordan said in a statement, “American citizens are spending upwards of 80% more on health care per month compared to Canadians... Additionally, unemployment benefits in Canada are almost 20% more than in the United States and can be claimed on average for an additional three months.”
Best in UK
In the UK, meanwhile, the top five which made it into the international ranking were joined by Leeds, Cardiff, Birmingham, Manchester and Edinburgh. London ranked outside the top 10, at a forgettable 13th, behind Newcastle and Bristol. Scoring an overall 7.6, it is considerably less favourable to launch an online business in the capital than in Sheffield (9.01), or Nottingham (8.98), according to the study.
In line with an average monthly cost of living of more than £2,400, Sellics found London to be a significantly more difficult environment for people to give up their day-job in order to set up an online business. According to the study, it takes those who do so in the city more than nine and a half months to establish an online business in the city with the support of benefits, while if they are unable to access these resources, it can take in excess of 10 months.
At the same time, with monthly living costs averaging half those of London, someone seeking to do the same thing in Sheffield could do so in just four and a half months with benefits, or just over five months without, allowing for a substantially improved level of agility. Even Edinburgh, which saw the highest living costs of the top 10, sees most cases able to produce an online business in less than six months with benefits, or just over half a year without.
Adding to their attractiveness as hubs for new online businesses, Sheffield and Nottingham have both seen a large influx of businesses into the region in recent months. The first half of 2017 alone saw 35 firms relocate or move into Sheffield, with the newcomers taking up 170,000 square feet in office space in the Steel City in that time – almost as much as for the whole of the previous year. The exponential growth, on the back of various investments into office space by local authorities, continued through the year – seeing the arrival of Capgemini among others – and well into 2018.
A number of consultancies have been looking to expand in the broader Nottinghamshire area at the same time. Local firm Focus, engineering consultancy Howard Ward Associates and fellow engineering firm Travis Baker all increased their Nottingham spaces in 2018.
