The second city acknowledges the benefits of a start-up culture as it offers funding to Birmingham’s small businesses.
Although Birmingham is the UK’s second city, it has long been overshadowed by other metropolises across the country, receiving very little in the form of funding in comparison.
However, now Birmingham has shifted its focus to promoting start-ups becoming more like northern cities such as Leeds and Manchester which are built on a backbone of SMEs. In January it was announced that small businesses and start-ups in the city will receive a boost from a new partnership which will offer more access to funding.
In collaboration with Aston Reinvestment Trust (ART) and the ThinCats Community Chest peer lending platform, Birmingham City Council is to assist businesses in the poorest parts of the city that find it hard to obtain loans from banks. Both ART and the council will together underwrite loans of between £10,000 and £150,000.
Over three years, the partnership has set a target of £1 million and is appealing to companies and individuals across the UK to invest in the scheme. City council leader John Clancy commented: "This is a pioneering local investment opportunity and a chance for people to not only get a financial incentive in the form of a tax relief but also a social return.
"Small and medium-sized enterprises are the lifeblood of the local economy and their ability to grow, create inclusive economic growth and preserve jobs impacts on everyone who lives and works in Birmingham."
Over the years, small businesses have contributed hugely to the UK’s economy, driving growth, opening new markets and creating jobs. Not only do start-ups and SMEs act as seedbeds for innovation, they also encourage competition and bring fresh and creative ideas to the forefront. Overall within the UK, the outlook for small businesses remains positive with recent PYMNTS.com Store Front Index for Q4 of 2016 revealing boosted performance in SME growth across industries, recording a growth of 1.7 per cent.
And the second city is embracing this start-up culture wholeheartedly, with recent statistics from StartUp Britain titling Birmingham as the most entrepreneurial city outside of London. Data shows that in 2016 alone, 17,473 new businesses were registered in the city, an increase of 25 per cent from the year previous. It has now retained its position as the number one regional destination for start-ups for four consecutive years.
Birmingham also surpassed London to become the country’s leading city for business growth rates in 2016, according to the Office for National Statistics’ (ONS) business counts data.
Tom Anderson, chief executive of Grid Edge, a start-up business located in Bruntwood’s Mclaren offices in Birmingham, believes that the city’s culture is unique.
“Traditionally the city has been a place where companies have a second office, but it’s not like that any more. It’s welcoming to start-ups and new businesses, it is an enterprising city and it has history,” he said.
“When you look at the statistics Birmingham more than pulls its weight in terms of the country’s economy, it just doesn’t shout about it in the same way that other cities do. Birmingham has - if you go looking for it - some absolute gems in terms of innovative companies and it’s got a really exciting start-up and technology scene. The city is on the way up and we want to be a part of that.”
A hub of redevelopment
When it comes to redevelopment, Birmingham’s city landscape is quickly transforming into something brilliant. With its redevelopment of the Grand Central shopping centre and New Street train station in 2015 and the ongoing £450 million city transformation which will create Paradise Circus (a ‘brilliant new heart’ of Birmingham), the city is now repositioning itself as a global leader. This is as well as the Digbeth canalside regeneration scheme billed as the most “exciting and important city centre regeneration scheme in Europe”.
Last year, occupancy rates for hotels in the second city peaked at 99 per cent and averaged 75 per cent - both the highest figures on record, according to economists in Marketing Birmingham’s Regional Observatory, indicating an influx of tourists from across the world.
And it’s not just tourists that are coming to Birmingham. Businesses in the city are beginning to thrive more than ever before, and professionals are relocating from London where they are able to find cheaper rent and cost of living.
This year Birmingham City Council launched a new £33 million Business Growth Programme (BGP) designed to strengthen supply chains, stimulate innovation and grow SMEs in Greater Birmingham and its surrounding areas. According to Knight Frank, Birmingham is currently Britain’s business hotspot and has now become a budding centre for financial services, new technology and architectural showpieces.
The arrival of big banks and professional services firms are also strengthening the city. This is on top of the planned HS2 rail link to London that will cut train journeys to and from Birmingham from 1hr 21min to 49min, according to the Department for Transport.
Birmingham should also see backing from Theresa May, who, as part of her ‘Modern Industrial Strategy’ paper, has pledged to support start-up businesses. “We must ensure that businesses across the UK can access the finance and management skills they need to grow; and we must create the right conditions for companies to invest for the long term,” said the prime minister.