The performance of the UK’s regions in supporting enterprise is revealed by an in-depth study published today. The Santander Enterprise Index (SEI) provides the first comprehensive review of how effectively entrepreneurship is supported across the country and shows that overall the UK performs well, with its regions ranked between 2nd and 59th of 125 EU regions[1].
However, the analysis, which assesses factors within categories of ability, attitude and aspiration, reveals large variations within the performances of the different UK regions. This is primarily due to a greater premium being placed on aspiration in certain areas of the UK. Santander believes that boosting aspirations in the lower ranked regions will be vital in encouraging enterprise in those locations.
Santander commissioned the world-renowned Global Entrepreneurship and Development Institute (GEDI) to develop the Index. It shows that the London region and the South East perform extremely well relative to other regions, respectively ranked second and ninth of all EU regions. By contrast, the East Midlands, Wales and the North East don’t score as strongly and are ranked 42nd, 45th and 59th of the 125 across Europe.
GEDI’s analysis shows that London’s strong performance in the SEI ranking is due to its ‘aspiration premium’. While societal and economic infrastructure in the rest of the UK is strong, entrepreneurs and potential entrepreneurs do not appear to be displaying the same confidence to take advantage of it as their peers in London; too few are getting new products to market, adopting new technologies, or exporting their products and services overseas. GEDI believes that this relative weakness in aspirations may be acting as a bottleneck that is preventing UK regions from performing at their maximum potential.
The table below shows the ranking of UK entrepreneurship ecosystems, giving the separate rankings for factors within the categories of Attitude, Ability and Aspiration.
Region
Overall Score
Rank EU125
Attitude
Rank EU125
Ability
Rank EU125
Aspiration
Rank EU125
London
79.9
2
79.0
5
83.0
2
77.7
2
South East
69.5
9
70.7
9
80.0
3
57.9
28
East of England
61.5
22
63.4
24
64.1
25
57.0
30
South West
60.7
24
63.6
22
68.1
16
50.4
47
North West
59.0
28
62.3
25
65.9
21
49.0
49
Scotland
59.0
29
59.8
32
72.2
12
44.9
67
West Midlands
58.6
33
62.0
26
66.0
20
47.6
53
Northern Ireland
58.0
35
58.8
34
62.7
29
52.6
43
Yorkshire The Humber
56.4
40
61.7
27
62.0
31
45.4
65
East Midlands
55.3
42
61.6
28
62.1
30
42.2
70
Wales
54.7
45
57.8
36
61.2
32
45.0
66
North East
48.9
59
54.7
42
56.3
46
35.8
89
Source: Santander Enterprise Index, July 2014[1]
Santander has launched a wide ranging package of support for entrepreneurs designed to help all regions take advantage of the aspiration premium. These include
• The new Santander Business Incubator in Liverpool – Santander is the first UK bank to create a physical environment, which provides early stage SMEs with fast-growth potential access to space, facilities and support. The scheme does not take equity in the start-ups (unlike many other schemes that take 6-8pc), nor charge for office space
• A $100m investment fund – the Santander Fin-Tech Fund – launched today - specifically targets start-ups in the fin-tech sector
• Funding circle partnership – the first partnership between a UK bank and an online alternative finance provider which will give thousands of small British businesses greater access to finance
• Santander Trade Portal Trade Club – an online information platform and networking centre, which enables businesses to explore and exploit import and export opportunities through both demystifying the process and providing connections to up to five million SMEs around the world
• The new “Santander Passport” for companies, which will give customers carrying out business abroad access to the same services at the group’s subsidiaries in other countries, providing them with dedicated local support as in their home market, taking into account their overall relationship with the Bank
Ana Botin, chief executive of Santander UK, said: “Enterprise is a crucial engine of economic growth – enterprise and entrepreneurs drive innovation, productivity growth, and job creation.
“By building partnerships we can develop entrepreneurship ‘ecosystems’ to support today’s successful modern entrepreneurs; and thus enable regional and national economies to thrive. The Santander Enterprise Index will help start a conversation on how to unlock potential across the UK; to a point where success becomes inevitable.”
Santander has commissioned GEDI to carry out further analysis into the findings, with a specific focus on two case study regions – the North West and the East Midlands. Working with local business and support organisations, Santander and GEDI aim to identify the key factors holding back their performance and make recommendations on how those regions can use the aspiration premium to maximise their potential.
Notes:
[1] - Source: Santander Enterprise Index July 2014. A full copy of the report is available here