Entrepreneurs across the country could hold key to boosting the economy

Innovation and entrepreneurship are key economic drivers and Yorkshire & the Humber is among the regions that could benefit most from an increased awareness of and access to government schemes that promote innovation in the business community.

When it comes to patent registrations, Sheffield is one of the region’s strongest performers.

We recently published the Powering Up: Entrepreneurship and Innovation in the UK report, in partnership with leading economic consultancy, The Centre for Economics and Business Research (Cebr). This research reveals that Yorkshire & The Humber is the ninth most innovative area in the UK.

Yorkshire & the Humber benefits from a relatively balanced economy, both geographically – with a selection of major urban centres such as Leeds, Sheffield and York – and industrially, with a strong presence across the services, manufacturing and agricultural sectors.

When it comes to patent registrations, Sheffield is one of the region’s strongest performers. Since 2015, there have been 22 patents filed per 100,000 resident adults. This is above the regional average of 19 but remains weak when considering the broader national context.

However, when analysing where the start-up activity is taking place in Yorkshire & the Humber, Leeds stands out as the star performer, with 1,482 new companies formed per 100,000 resident adults over the past year.

Despite some silver linings, the results of the overall Index suggest that Yorkshire & the Humber currently lags behind most other parts of the UK when it comes to innovation and entrepreneurship. A large part of this can likely be explained by levels of investment in the region. The data indicates that too much of the burden of R&D spending is currently falling on higher education institutions, with per capita investment by local businesses among the lowest in the country. The 2016 Longitudinal Small Business Survey found that only 7% of Yorkshire & the Humber based SMEs had applied for R&D credits over the past year.

We found a strong correlation between the regions’ overall scores and their productivity and employment levels. Among the six highest ranked regions in the Index (London, East of England, South East, South West, West Midlands, North West) the average output per hour worked was £33.88, compared to £29.50 among the six lowest ranked regions (Wales, East Midlands, Yorkshire and Humber, Scotland, North East and Northern Ireland).

If those in the bottom half of the Index achieved the same productivity levels of those in the top half, Cebr calculated there would be a £106 billion boost to UK GDP. Additionally, if the six lowest ranked regions had experienced the same rate of employment growth over the past three years as the six highest ranked, employment levels would be 272,000 higher across the UK.

It is vital that the UK continues to innovate and grow to retain a competitive advantage. Entrepreneurs are crucial to this and we know that SMEs make up over 99 per cent of UK businesses, so we must support their creation and nurture their growth.

Every region in the UK has a part to play and we can see from this research that there are areas that will benefit from dedicated support to boost innovation. Partnerships between the public and private sectors, university and business collaborations, and proactive investment into research and development are central to improving the country’s economic outlook and there needs to a concerted effort to promote this at every level.