Birmingham is lagging behind the UK average for the number of new business being created, according to new research.
New data shows a net total of three new businesses were created per 10,000 people in the city last year – compared to the UK average of eight new businesses per 10,000 people.
That means Birmingham is 35th on the list of the UK’s top 50 largest towns and cities for net number of new businesses created.
London is top of the list, creating 24 net new businesses per 10,000 people, according to UHY Hacker Young, the accountancy firm.
Birmingham Chamber of Commerce and Industry policy adviser Kiran Virk said the research was evidence of how hard the region has been hit by the recession but said there was help available to help start-ups.
She said: “There is no hiding that our region has been hit hardest by the recession and it is hardly surprising that the number of new businesses being set up in Birmingham in the last year is below the UK average.
“We have seen many firms in the last 18 months go under and the current environment is difficult for well known names let alone for entrepreneurs who are just setting up.
“But it is important that we do not deter people from setting up their own companies.
“It is entrepreneurs and the private sector that will create the wealth and employment opportunities that drive the UK economy out of these troubled economic times.”
Ms Virk said Birmingham was recently named as the most successful city in Europe for promoting new business starts up and entrepreneurship.
She said Birmingham Chamber has been able to help many small firms with their big business ideas with help like free workshops in bookkeeping and marketing.
However, Malcolm Winston, a partner at UHY Hacker Young, believed the data highlights a problem for the private sector in the region.
Mr Winston said: “Birmingham’s position on this list will cause some concern amongst the city’s business community.
“Of course, new businesses by definition are likely to be quite small and will not necessarily make up for the loss of jobs and revenue suffered when bigger companies fold.
Nevertheless, these statistics suggest that if Birmingham is going to bounce back quickly from the recession then it should be spared the worst of the Government’s cutbacks.
“We hope that local politicians will be lobbying the Government to ensure that public sector support for Birmingham’s business community is protected.”
The research from UHY Hacker Young also reveals that on the ranking list of net new businesses created in the UK’s top 50 towns and cities, four of the bottom five positions are held by coastal towns.
Blackpool, Southend on Sea, Sunderland and Swansea all saw more businesses closed compared to those newly created.
Mr Winston added: “With swathes of the workforce unemployed in these coastal areas, the size of the talent pool that actually has the experience and the financial backing to create a new business venture will naturally be somewhat reduced.
“Often the people in those towns with the most talent and the most in demand skills will have left over the last 20 years, creating a downward spiral.”
