Early-stage entrepreneurship has been steadily growing in the UK since the pandemic, with economic recovery seeing more people starting new business ventures to combat uncertainty and become their own boss, create jobs and follow lifelong dreams.
The latest cost of living crisis has also become a catalyst for entrepreneurship, with more people than ever before looking to supplement their income with a new venture or side hustle – research shows a third of UK adults are planning to start a business in 2023.
Entrepreneurial hotspots
Where are these hotbeds of innovation? We analysed the latest Companies House data and overlaid it with population data in the UK’s largest cities to see which location has the strongest Entrepreneurial Index. Let’s take a look at this year’s most entrepreneurial cities!
RANKING |
CITY |
1 |
COVENTRY |
2 |
BIRMINGHAM |
3 |
LEEDS |
4 |
LEICESTER |
5 |
STOKE-ON-TRENT |
6 |
LIVERPOOL |
7 |
MANCHESTER |
8 |
LONDON |
9 |
SOUTHAMPTON |
10 |
NEWCASTLE-UPON-TYNE |
11 |
GLASGOW |
12 |
NOTTINGHAM |
13 |
EDINBURGH |
14 |
BRISTOL |
15 |
SHEFFIELD |
Coventry comes out on top as the UK’s Most Entrepreneurial City, with a 13% increase in the number of businesses registered in 2022, meaning one company was registered per every 79 people living in the city. The most popular sectors in Coventry include freight transport by road, construction, real estate, and ecommerce.
4,361 businesses were started in Coventry in 2022!
As one of the most popular locations for setting up a business in the UK, Coventry boasts affordable commercial space and a large talent pool. An average trip to London is just over an hour, and the city has good support systems in place to help entrepreneurs thrive.
Birmingham follows Coventry, with an Entrepreneurial Index of 79, with the city seeing a 9% rise in new business registrations in 2022.
This streak puts the West Midlands in the spotlight, with record business growth in the last 12-months. Last year, research showed a surge in hiring among tech startups in the West Midlands, with the area being named the UK’s fastest growing tech hub the year before.
No Change in London
London has one of the strongest startup ecosystems in the world and launched the highest number of businesses last year, at 164,808. However, when it comes to business growth year-on-year and startup to population ratio, London is outranked by Leeds, Leicester, Stoke-on-Trent, Liverpool and Manchester.
This could be because high costs in the city are causing would-be business owners to look outside the capital.
Top Three Industries of 2022
Looking at the total companies registered across the UK last year, three industries dominate with the biggest increase.
- Other retail sale not in stores, stalls or markets
- Construction of domestic buildings
- Hairdressing and other beauty treatment
Most Entrepreneurial Age Group
The highest proportion of new business owners is between 31-40, followed by over 50’s.
Although more first-time business owners fell into older age brackets in the 12-months, there is a strong entrepreneurial spirit among the UK’s under-30’s. Around 74,989 businesses were registered by people aged between 18-30 last year.
Looking at the gender split, 67% of all businesses registered were by men, against 27% by women (with 6% unknown).
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