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The top 10 SME cities for long-term growth

At a glance

  • SMEs in different cities vary enormously in their ability to generate jobs and value
  • The characteristics of leading regional performers have been identified by Centre for Cities
  • The external business environment — including consumer demand, workforce capacity and skills, suitability of business premises, connectivity and access to finance — can have a significant impact on how SMEs perform

A Centre for Cities report, Small Business Outlook 2013 — the first city-by-city health check of SMEs in the UK, sponsored by Zurich — shows how important SMEs are to the economic recovery of our cities and the UK as a whole.


Yet SMEs in different cities vary enormously in their ability to generate jobs and value. Seven out of the top 10 most enterprising cities — with a high number of business start-ups, large business base and lots of growing businesses — are located in the Greater South East.

It’s not as simple North-South divide though. Aberdeen and Warrington feature in the top ten cities. Meanwhile, Luton and Chatham, both less than 15 miles from the M25, rank in the bottom twenty.

Enterprise Score

The ‘Enterprise Score’ combines several key indictors using equal weighting: business start-ups per 10,000 population, SMEs per 10,000 population and the proportion of SMEs (>10 employees) expanding. A high score indicates strong performance across the three indicators. 

Regional performance

The top 10 most enterprising cities have several common characteristics: large professional sectors, highly skilled workforces and businesses operating in diverse markets. These factors help explain why the performance of the SME base is so strong in these cities compared to others.

Top 10 most enterprising cities (based on the Enterprise Score)

  • Aberdeen
  • London
  • Reading
  • Cambridge
  • Aldershot
  • Warrington
  • Milton Keynes
  • Brighton
  • Crawley
  • Bristol

Use this exclusive guide to understand in which UK cities there are likely to be new long term SME business opportunities.

Recognise the geographical dimension of SME success and failure to respond to the specific needs of your SME base

Encourage SMEs to trade in new markets. Businesses in the most enterprising cities tend to operate in more diverse markets.

Join local networks like Chambers of Commerce and encourage SME clients to participate in order to shape opportunities.

The levels and nature of demand matter too. Businesses in the top ten most enterprising cities tend to operate in more diverse markets. Over 20% of businesses in London and 16% of businesses in Reading operate primarily in international markets.

The more diverse a city’s market base is, the more resilient it is likely to be. And the buoyancy of the ten city economies is likely to mean higher demand for the businesses operating in local markets. In contrast, up to 75% of businesses in cities such as Blackburn and Luton are dependent on local or regional markets.

Some of these cities have also seen large falls in wages in recent years and are likely to be disproportionately affected by public sector cuts – all reducing the amount of money that could potentially be spent in local businesses.

Breaking down the barriers

Many of the barriers to SME growth relate to the external business environment. Strengthening transport connections and improving the planning system, for example, can have a significant impact. But SMEs can also help themselves by building effective partnerships with local Chambers of Commerce, FE colleges, businesses and others.

This is an important part of improving the business environment, and brokers can provide support for business management on planning, skills gaps, access to finance and help with exporting.

The ‘Enterprise Score’ combines several key indictors using equal weighting: business start-ups per 10,000 population, SMEs per 10,000 population and the proportion of SMEs (>10 employees) expanding. A high score indicates strong performance across the three indicators.

Image © Getty

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