Glasgow remained Scotland’s number one start-up hotspot, beating Edinburgh two years in a row, according to new research.
Statistics published by Companies House, analysed by Centre for Entrepreneurs, show that 6,189 new companies were registered in Glasgow in 2017. The largest city in Scotland is followed by Edinburgh, with the capital hosting 5,176 start-ups in 2017. Glasgow and Edinburgh were followed by Fife (1,735), South Lanarkshire (1,724), Aberdeen City (1,587) and North Lanarkshire (1,471).
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At the same time, the number of new companies registered in Glasgow in 2017 dropped for the first time in years. Glasgow’s start-up figures, 6,189, represents a reduction by 21.1 per cent from 2016, when 7,845 firms were registered in the city.
Across the UK, the start-up activity slowed down. 589,008 new businesses were launched in 2017 – a drop from 657,790 in 2016 (-13.7 per cent).
Martin Little, Leader of Federation of Small Businesses (FSB) in Glasgow, said: “It is great to see Glasgow retaining Scotland’s pole position for start-ups in two years in a row. We have been aware of this trend as we have seen numerous start-ups joining FSB in the last few years.
“Those start-ups are graduates with great ideas, skilled migrant entrepreneurs and former employees with experience and expertise who all decided to become their own boss. These new firms help make Glasgow’s business community unique, diverse and resilient. We all need to get behind these ambitious entrepreneurs and support them.
“At the same time, it is concerning to see the number of Glasgow start-ups dropping considerably by over 20 per cent.
“There are certainly a number of reasons behind this, but our members have told us that one of the biggest challenges to start and run a business is ever-increasing financial burdens.”
FSB’s recent research shows that the increase in small business costs directly resulting from policy decisions has significantly outpaced inflation in recent years. Tax, reliefs and employer obligations have caused outgoings for smaller firms to rise by an average of 12.5 per cent in the five years to 2016. That compares to a cumulative Consumer Prices Index (CPI) figure of 7.7 per cent over the same period.
Martin Little added: “Rent, licensing fees and utility costs all hit you before you’ve had the chance to make your first £1 in turnover, let alone profit — and this burden is increasing. All policymakers should take heed of this cumulative burden when it comes to future policy interventions.
“Increasing support for business start-ups is part of Glasgow’ Strategic Plan and City Region Economic Strategy, so we should explore innovative and practical ways to support these start-ups. As our research continually finds, a vibrant and thriving small business community is essential to creating a more resilient, sustainable economy.”
