News

October 21, 2011

North east most enterprising region, survey finds

Small businesses in the north east are top of the table for recent performance and optimism, according to a new survey by Barclays Bank – while those in the south east are seeing confidence slipping, writes Simon Wicks.

The Regional Impact Index 2011, based on interviews with 1,000 owner-managers, found that the UK’s small businesses are cautious overall about their prospects for 2012 – with just 49 per cent planning for growth, compared to 66 per cent in last year’s survey.

However, across 13 indicators of recent performance and future prospects, north east firms topped the UK regional table, leaping from fourth to first. The south east who was joint fourth plummeted to tenth.

In particular, more north east firms are preparing to take on staff and on average were investing more of their income on innovation than elsewhere in the UK. Their optimism was second only to London businesses.

“You get the view that there’s not an enterprise culture in the north east because of the dominance of large traditional industries like coal and steel,” said report author Professor Robert Blackburn of the Kingston University Small Business Research Centre.

“But the reality of what we’re finding is that owner-managers in the north east come across more positively – if you want to start a business in the north east, you’ve got to be tough because it’s not an easy environment,” he added.

Local enterprise agencies confirmed the report’s findings. Paul McEldon, chief executive of the North East of England Business & Innovation Centre, said: “The north east is a resilient area and not as susceptible to the highs and lows of the economic cycles, maintaining a very positive outlook when times get tight. Manufacturing and exports have always been strong and the improved exchange rate conditions and in-built drive to look outside of the region for markets and customers put us in a strong position at the current time.”

Overall, the survey found that firms were investing in innovation, but just 15 per cent of UK small businesses have plans to take on staff over the next year. Referring to signs of “jobless growth”, Blackburn said: “During a recession, small-business owners always look at how they can do things better with products and processes.

“The results show that very few owner-managers are prepared to risk taking anybody on because they’re looking at macro-indicators well as their own till,” he added. “They’re not thinking about employment at the moment. They’re looking to retrench, reinvest and reinvent themselves.”

• London firms looking up despite lingering downturn, survey finds