How could your city be affected by the crisis in the Eurozone? New research out today found that the places that have a combination of high levels of domestic enterprise and strong business-start up growth as well as foreign-owned firms have the strongest, most resilient economies. As job losses and business closures may be one of the knock-on effects of the troubles in the Eurozone, the report also flags which cities could be more exposed as the crisis gathers pace.
The report, sponsored by ICAEW, calls on national and local government to take a more tailored approach to enterprise policy to support home-grown entrepreneurship at a time of economic uncertainty.
Almost 60% of Eurozone-owned businesses based in the UK are located in our cities. This is likely to have brought great benefits to cities in the past. But as the crisis deepens some places may face greater challenges than others.
Cities like Milton Keynes, Oxford, Belfast and Telford are likely to be more exposed because they have the highest proportion of Eurozone-owned firms out of all UK cities. Unlike the others though, Milton Keynes also benefits from strong levels of domestic enterprise which could help to counteract any fall out from the Eurozone crisis.
The following table compares cities with the highest proportion of Eurozone businesses relative to their business start ups and total business base. It shows that out of this group, only Warrington, Milton Keynes and Northampton have above UK average numbers of start ups or total businesses:
Alexandra Jones, Chief Executive of Centre for Cities said:
“The return of the UK economy into recession means that a mix of businesses in cities – both home grown and foreign owned – is essential for growth. National government and cities need to continue to invest in the simple things that make a big difference to business: improving transport and skills and making the planning process more responsive to business needs.
Open, entrepreneurial cities are best placed to grow their economies, so at a local level cities should develop tailored enterprise policies that respond to the challenges and opportunities in their individual economies. This could mean focusing on support for start-ups or existing companies or ensuring the city is showcasing opportunities for external investment.
And in the context of the fragile economic climate in the Eurozone, cities and national government should seek out every opportunity to support businesses through any short-term problems caused by the crisis.”
Clive Lewis, ICAEW Head of Enterprise, added: “This research highlights the importance of local enterprise to a city economy. There is plenty of advice available including ICAEW Business Advice Service and guides as UK Export Finance. With more UK competition, new markets will be the key to growth to many businesses up and down the country.”
Ends.
For further information please contact Rachel Tooby, External Affairs Manager at Centre for Cities on 0207 803 4316 / 07748 183 026 / r.tooby@centreforcities.org
The report, Open for Business, is available to download here.
Notes to editors
About Centre for Cities
The Centre for Cities is an independent, non-partisan research and policy institute. Committed to helping Britain’s cities improve their economic performance, the Centre produces practical research and policy advice for city leaders, Whitehall and employers.
The Centre for Cities is grateful for the support of ICAEW for this independent report. Except where otherwise indicated, all views expressed are those of the Centre for Cities and do not necessarily reflect those of ICAEW.
About ICAEW
1. As a world leading professional accountancy body, the ICAEW provides leadership and practical support to over 138,000 members in more than 160 countries, working with Government, regulators and industry in order to ensure the highest standards are maintained.
Our members provide financial knowledge and guidance based on the highest technical and ethical standards. They are trained to challenge people and organisations to think and act differently, to provide clarity and rigour, and so help create and sustain prosperity. The ICAEW ensures these skills are constantly developed, recognised and valued.
Because of us, people can do business with confidence.
2. The ICAEW is a founding member of the Global Accounting Alliance with over 775,000 members worldwide.
Supported by ICAEW.