The city of Leeds is exhibiting the same level of start-up businesses as the south east, one of only three areas in the north to do so, a report states.
The other three Northern city-regions to have kept pace with London were Manchester and Liverpool, with both Leeds and Liverpool shown to have some of the highest proportions of fast-growing firms in the nation.
The findings are published in the latest report from Enterprise Research Centre, a consortium of leading university business schools, in its annual UK Local Growth Dashboard.
It also showed that firms across the north of England created 125,735 net new jobs in 2014/15 – 18 per cent of the UK total of 709,174.
When it comes to scaling up, 2.3 per cent of Sheffield start-ups with revenues of less than £500,000 reached £1m turnover in their first three years over 2012-15 – the highest in the region and above the UK average of 1.8 per cent.
The North’s top performing Local Enterprise Partnership (LEP) for job creation was Cheshire and Warrington, with a net job creation rate equal to 5.2 per cent of its existing stock – the second highest level in the country after Coventry and Warwickshire and ahead of London.
For firms stepping up from £1m-£2m turnover to £3m or more, the best performing Northern region is Lancashire, where 7 per cent of firms in that category reached this milestone.
Looking at OECD-defined High Growth Firms (HGFs) - companies with more than 10 employees recording employment growth of more than 20 per cent per year over three years – these firms created between 40 per cent and 60 per cent of all net new jobs in Liverpool, Sheffield, the Tees Valley and Humber LEPs, despite forming a tiny fraction of all firms.
Professor Mark Hart, deputy director of ERC, said: “What we see in the Growth Dashboard is that firm growth and job creation is spread right across the UK and is not limited to a few cities or regions.
“Nor is it restricted to certain types of ‘fashionable’ high-growth firms – there’s a complex growth pipeline of companies in every corner of the country that have different support needs based on their individual ambitions.
“This is incredibly important to understand if we’re going to create an industrial strategy that capitalises on the strengths we already have without over-focusing on star firms, or regions labelled as ‘powerhouses’.”
Meanwhile Leeds has been named in the top 10 best locations to start up a small business in the UK according to research compiled by Informi, a website offering free practical advice and support for small businesses.
The report’s authors said Leeds was named in the top ten because it has a good number of business start-ups in the area, a good level of high growth SMEs, and a relatively low level of SME closures.
Leeds and York were the only two Yorkshire destinations to make the top 20.
Informi statisticians made their selections based on information from 65 UK cities on a number of factors that can be important for smaller company survival, including the density of small and medium sized businesses (SMEs) in the area, the quality of digital connectivity, and house prices.
Brighton came top of the list due predominantly to its superfast broadband penetration rate, low pollution levels and high number of business start-ups. London only made it to number eight on the list, ranking in first place for the number of business start-ups there and density of SMEs.
However, the capital’s high property prices, large number of SME closures and relatively moderate broadband speeds put it lower down the list.