Why London's position as UK centre for business and finance is under threat

Keith Tilley
General Election - Economy
It could be argued that London has lost the sense of entrepreneurial spirit that York has demonstrated in nurturing nascent enterprises (Source: Getty)

London stands as not only the symbolic centre of our country, but as the epicentre of the UK’s business and finance activities.

However, recent analysis by Sungard of government and third party data has found that the capital’s position is coming under threat: in a ranking of ten of the UK’s major cities across a wide range of business capabilities it failed to make the top three.

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Some of the results are painfully obvious; who, for example, is surprised to hear that London office rent prices are the highest in the country? Or that employment rate is low in comparison to other cities? However, despite being hailed as a hub for new businesses, the UK capital could only manage ninth place when it came to start-up survival rate.

A combination of the above factors, plus the high concentration from already established businesses is clearly hampering chances that start-ups have to grow.

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While southern cities still dominate the overall ranking list (with Cambridge named as the top city for business, closely followed by Oxford and Brighton), the findings highlight a number of areas in which the North is flourishing.

York came out on top for start-up survival rate, helped by schemes such as the Whyte Knight Fund, which gives organisations the financial help and support that they need to establish themselves in the market.

With so many start-ups vying for business, it could be argued that London has lost the sense of entrepreneurial spirit that York has demonstrated in nurturing nascent enterprises.

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Flying the flag even further for the 'Northern Powerhouse', Leeds was also placed highly, ranking number one when it comes to access to graduate talent. With this thriving start-up culture in the North, cheaper rent and lower crime rates, could this be tempting away skilled workers away from the capital?

It’s not all doom a gloom for London however, with the capital emerging as the most resilient location when it came to combating cyber security breaches.

With Silicon Roundabout hosting almost eight times as many tech firms as anywhere else in the UK, it seems that London is still making good use of its technology talent.

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Interestingly, it seems that there is no such thing as the perfect location for business, with the findings showing room for improvement and investment in some area for every region in the UK.

With the complex IT landscape facing UK businesses today, it is unrealistic to expect one region to excel on all fronts.

In order to succeed businesses should seek to work with experienced partners to help them identify and plug any gaps they may have. No matter the city in which they might be based.

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