Plymouth well-placed as a city to do business in
Plymouth has been placed 26th out of 74 towns and cities to do business in, according to the Santander UK Town and City Index.
Although Plymouth was fifth in terms of cost competitiveness, the city was placed 43rd for Enterprise, 37th for Well-being, equal 21st for Talent, and equal 17th for Connectivity.
The analysis said that a relatively small business base per 10,000 of the population was the underlying cause of Plymouth's relative weakness. This has fewer positive benefits in that competition, niche development and co-operation and collaboration are less likely to increase when the business base is smaller.
Also, lower relative business start up rates indicate less favourable business conditions because start ups increase competition in the marketplace, by replacing inefficient businesses and challenging existing business to improve their offering, in order to compete.
On the positive side, Plymouth has a relatively low level of its population with no qualifications.
While this may disadvantage businesses seeking low wage (low skilled) individuals, favourable business conditions are increasingly found in areas with higher levels of qualified individuals.
This is because those with higher education levels are also likely to have higher income levels.
Areas with these advantages are, therefore, more likely to support a wider range of businesses that may focus on offering niche products and services to their customers. Businesses in these areas may also benefit from non-price based competitive advantages.
By comparison, Bristol was placed 9th in the UK.
The Santander UK Town and City Business Index is an assessment of business competitiveness in the UK which examines the four main Scottish cities, Belfast in Northern Ireland, the three main Welsh cities, and 66 English cities and towns ranging from Newcastle in the North East to Plymouth in the South West.
In total, these represent a population of 24 million people and around 741,000 businesses. 32 London boroughs are also covered, albeit separately, covering 386,000 businesses.
In both the UK and London indexes, individual boroughs, towns and cities are assessed against comparable, consistent and timely data derived from official statistics.
By assigning a relative score to each of the factors, the report looks to rank the 74 UK towns/ cities and 32 London boroughs as places to do business.
These data are organised into five domains, each reflecting factors that are important for understanding how favourable are business conditions in these urban areas. These domains are: Enterprise, Talent, Connectivity, Costs, and Well-being.
Enterprise: This uses nine measures to assess business vitality and sustainability in town and cities. If agglomeration advantages are to accrue to a particular town or city, its business population has to be both strong and sustainable, and there are a variety of indicators of such vitality. For instance, the depth and breadth of the business stock (sector diversity and specialisation) is also supportive of favourable business conditions as it allows businesses in local towns and cities to respond to economic changes.
Talent: This uses three measures to help identify if there are suitably qualified people that businesses can draw upon from these communities. A second important feature is that local communities have people of sufficient calibre to support business development: the argument here is that 'smart' places need 'smart' people.
Connectivity: This uses two measures of how well connected businesses are in terms of Internet provision. The Internet has become a key tool for most businesses and how towns and cities have fostered and invested in an online and dynamic business environment has become crucial for their on-going development.
Costs: This uses three measures of costs (carbon dioxide, average council tax bills, house prices) that employers and employees have to face to work in these communities. High levels of pollution (carbon dioxide emissions) have a range of negative business impacts. Businesses are facing increasing regulatory and consumer pressures to respond to environmental and social concerns and this is likely to be greater in areas of high pollution. Businesses and their employees also face additional non-national tax costs (average council tax bills). Such costs serve as a proxy to signal how relatively expensive it is for businesses to operate in particular towns and cities. Finally, house prices may proxy for some of the financing costs that businesses face. This is because new businesses are typically reliant on internal sources of funding whilst existing businesses may use a primary residence as collateral against debt finance (Fraser, 2009). This may make it difficult for entrepreneurs in towns and cities where house prices are low to leverage finance for their business. If so, this will increase the cost base relative to those in towns and cities where house prices are stronger.
Well-being: This uses three measures of the wider economic well-being of communities. Prosperity, for instance, has a positive feedback on business conditions because places with higher earnings, better employment and, arguably, more satisfied people are more likely to enjoy more favourable business conditions.
Marcelino Castrillo, Head of SME, Santander Corporate & Commercial said: "One element influencing a business's potential success is its location. It is clear that there are big differences between our towns and cities in terms of the business landscape.
"The varying strengths and weaknesses of a location's business environment impacts the type, health and lifecycle of the businesses present in that location. Understanding these strengths and weaknesses in a particular town or city and how they impact the business environment is essential to those who have a stake in nurturing this business environment.
"Only through a thorough understanding of the differences across the country, can support and expertise be tailored to better directly support businesses in that locality.
"Santander wanted to take a closer look at some of the factors which contribute to business growth to see how these compare in different major urban localities to better understand the different support measures that may be needed in different communities."
Source: http://businessinsight.santandercb.co.uk/map-feature/#UK
