The 2019 Small Business Index has been released, which ranks cities across the UK and Europe and compares them based on various criteria to evaluate which ones have the best climate for small businesses. And for another year, Glasgow is in the top 3 cities in the UK for SMEs. Many factors are behind Glasgow’s prominence as a business hub, notably its emphasis on innovation and start-up friendly business climate, which attracts many businesses from a wide variety of sectors in the region. Let’s take a look at some of the findings of the report and what they could mean for the future of Glasgow and its entrepreneurs.
The Criteria Used to Determine Rankings
There were four principal criteria used in the 2019 Small Business Index to identify which cities were considered better for small businesses. The total number of small businesses in the area, as well as the type of business were looked at. They also looked at the number of businesses per capita. With these criteria combined, they were able to gain a general idea of the level of competition in the region. Other things that were looked at included local incentives for businesses as well as rent prices and availability.
Glasgow Just Above London as UK’s Best City for Small Businesses
London was ranked as the third best city in the country and was able to make it into the top 20 for best cities for small businesses in Europe. This shouldn’t come as a surprise, considering the amount of support for local businesses there, the size of the market, and the many opportunities there. However, the fierce level of competition, and high rent price combined with low availability prevented it from making one of the two top spots.
This is also why Glasgow was able to outshine the capital when it came to small businesses. The vibrant tech scene, the large number of incentives for businesses, and the lower competition in the city is why it was able to get the second spot. Major improvements in its infrastructure and its new gained status as a smart city certainly helped too.
Other Factors in Favour of Glasgow
One of the major points in favour of Glasgow is the access to top level talent. As a matter of fact, this is one of the many reasons why the city has become such a hub for tech companies. The city has a very high percentage of working age adults with an NVQ Level 4 education, and counts four universities. Around 45% of the people of the city had a Level 4 NVQ or above, which is much better than most cities with roughly the same population.
Another area where the city shines is when it comes to support and resources to local entrepreneurs, which is another reason why there was such a rapid increase in the number of start-ups in the city.
Another benefit of the city that was cited by many newcomers was how great and efficient the transit was and how connected the city was as well. This made commuting to and from any surrounding cities much easier and facilitated logistics. In addition, one of the main reasons for doing business in Glasgow according to many was the people of the city itself. The people in the city have gained a solid reputation for their get it done attitude, which is always beneficial to business. This is also a reflection of the high number of high-level graduates in the city.
Birmingham Took the Top Spot
Birmingham topped the list this year, and in this case, low cost rent and high availability also made a difference. Out of all the UK cities on this list, all cities were considered as having poor accessibility and high prices, with the only exceptions being Birmingham and Glasgow. Relatively lower levels of competition in both cities stood them apart as well.
Competition in the City is Gearing Up, However
With success comes competition, and Glasgow is no exception. While competition there is still less than in London, the city has attracted many small businesses due to its good reputation and favourable business climate. As a matter of fact, there was recently a sharp increase in the number of businesses with less than 10 employees setting up shop in the city recently.
Businesses are also experiencing more difficulty in finding office space in the city, prompting more of them to remodel their own premises with the help of local architects like Amos Beech instead of looking for office space in Glasgow. That also increased the demand for contractors who can refigure working spaces to maximise them and favour better communication and efficiency. And while new office space projects seem to be announced every week, they are still not enough to meet the demands and are reduce prices as well.
Besides Creative Clyde, organisations like Scottish Enterprise have done a lot for new businesses relocating in the city who might be trying to compete internationally. They offer a wide number of classes, seminars, development programmes and business training, among other things.
Glasgow Just Outside the Top 10 for European Cities
Glasgow also made it all the way up to 11th for European cities, just after Prague and Athens. Germany had the highest number of cities in the top 20 with five: Berlin, Dusseldorf, Essen, Duisburg and Hamburg. Notable cities in the list also include Barcelona at number four. As a matter of fact, Spain did very well this year and got the two top positions with Valencia at number one and Madrid at number two.
Financial Incentives are Also Helping
The city has also introduced a variety of financial incentives to encourage more businesses to set up shop in the city. The city’s Entrepreneurial Spark accelerator programme has done a lot to improve access to financing for small businesses involved in tech. This has not only helped attract even more in the sector to the city, but also made sure that they could succeed. To this day, the programme has helped small business receive over £17m in total funding in addition to hiring over 400 employees.
The City is Also Becoming a Hub in the Green Sector
With its vision as a city of the future, Glasgow is also viewed as a hub for renewable energy. The ORE catapult is one of the many reasons for this, but Glasgow, and Scotland in general, has done a lot to increase the use of renewables. This is also reflected in the type of projects and businesses the city invests in.
For instance, groups like Zero Waste Scotland are offering grants to companies that focus on reducing their carbons emissions. Companies like Revive, which recuperates used coffee grounds in order to transform them into plant food, has been one of the beneficiaries. As a matter of fact, they stated that it was instrumental in them getting off the ground.
In addition to these initiatives, there are also many funding competitions in the city that allow budding entrepreneurs the chance to get funding. This is on top of the ever-growing number of investors showing interest in the city and all the opportunities it offers.
Owners Describe Business Culture in the City
Some business owners in the city were asked what they thought about the city’s business culture. Some loved the fact that it was a smaller market with less competition, but others also mentioned that it could also be a setback.
For instance, for those who were thinking of expansion, transportation is not always the easiest. One in particular stated that while the city had connecting flights with Dubai, the prices could be extreme, which caused issues in their business.
Others viewed the small market and city as an advantage. One person asked said that they appreciated being able to get pretty much anywhere they wanted in about 20 minutes, which was a difference from their native Melbourne. They also noted how this could be beneficial for things like networking. They felt a sense of proximity with others, and also liked how they were able to make connections pretty fast, which can be a plus for any start-up.
This is why so many younger start-ups seem to pop up all around the city. Glasgow pulls all the stops to specifically help young start-ups, whether it’s in the form of rate rebates, or free coaching sessions.
The collaborative nature of people of the city took some aback too. One stated that the local community is really focused on offering genuine help to others instead of being in a spirit of competition all the time. The general friendly disposition of Glaswegians also contributes to this great general atmosphere, which can feel welcoming to new entrepreneurs looking for guidance.
Conclusion
Glasgow should continue being a prime destination for businesses big and small for years to come. The investments in education, innovation, and infrastructures are finally paying off, making the city a fast-rising hub in fields like finance, technology, and renewable energy.
