The world's best start-up hubs: Birmingham, England

Could Birmingham really be the new Shoreditch, we hear you ask? Well yes, according to Business Birmingham, who invaded the recent London Tech Week to paint a picture of a thriving start-up hub in the heart of the Midlands. We decided it was time to investigate further...

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  • Population: 1.1 million
  • Pros: Near enough to London to have close ties, without the crippling costs. A rapidly developing start-up scene.
  • Cons: See above. It's not London. While there are many positives to take from this, powerhouse international cities such as London and New York offer an almost unbeatable support and networking environment for start-ups.
  • Cost: Low, very low. Office space, on average, is more than five times cheaper than London. Massive savings to be made on wages, too.
  • What to expect: A surprisingly fertile ground for business, free of many of the constraints which can hold back start-ups in bigger, more established hubs.

​Settled almost in the dead centre of England, Birmingham has a glorious past full of industry and culture. Times have changed, however, and the city seems to have fallen on hard times. Its unemployment rate has hit 7.9% - more than double the national average.

However this apparent hardship has had a positive impact on the city, people have begun starting their own companies, taking their employment into their own hands rather than waiting for someone else to give them wages. In fact, so many people are creating their own businesses that last year Birmingham registered more start-ups than any other UK city, apart from London.

But how has this been able to happen?

It's within easy reach of London

With the Virgin Pendolino trains and the Super Voyager trains, the trip from Birmingham to London is only one hour and 24 minutes. This might seem like a drawback, rather than a benefit. After all, many of Birmingham's residents have drifted southwards to the capital to find employment, and not as many have come back. Still, its proximity to London actually makes Birmingham more attractive to entrepreneurs.

London attracts some of the best and the brightest from around the country and around the world. Many national and international companies have their headquarters in London. It is such an important city that almost all other businesses in the country will eventually have to look south to carry on their business. That is why Birmingham's proximity is so great. Businesses in Birmingham have relatively easy access to all the opportunities in London.

So why don't Brummie businesses just relocate to London? Well, the answer’s simple...

Low set up costs and overhead

In London, office space costs on average £170 per square foot. In fact, the West End has the most expensive office rental rates in the world. Birmingham office space, by comparison, sits at less than £25 per square foot on average. London's Consumer Price Index is 116.88, making it one of the most expensive cities in the world to live in (and 16.88% more expensive than New York City). Birmingham's, by contrast, is 95.41, meaning it's far more affordable to live in.

Of course, one of the biggest expenses start-ups face is the cost of hiring others to help out. In London, the average wage for a 'junior' role is £37,500. In Birmingham, the same job cab filled for an average wage of £29,000. That means that on average, Birmingham employers can save £8,500 a year over their London counterparts – just on wages alone.

Plentiful supply of young, entrepreneurial talent

Cushman & Wakefield, who publish the European Cities Monitor amongst other polls, recently named Birmingham as the 16th best university city in the world for the number of institutions in the area and breadth of their expertise. The only UK city to better Birmingham was Edinburgh.

Birmingham has six universities, and they specialise in such diverse disciplines as music and art, law, hospitality, business management, medicine and engineering. So many students are focussing on such a wide range of subjects, and they are studying at the cutting edge of theory and practice. When they come together at the end of the day for a sociable pint, they might also solve seemingly impossible problems by bringing different approaches and different points of view together.

If that seems a bit far-fetched for student union chit chat, then just remember that Microsoft, Apple, Tangentix, Google, FedEx, Bioscience Ventures, Dell, Genentech, Ambicare Health and Facebook were all started in universities.

All these factors add up to fertile business ground

Birmingham has the young inventors, designers and entrepreneurs of tomorrow coming together and collaborating in innovative ways. These innovators are able to start their own businesses because the start-up costs are so low, and they can expand quickly thanks to all the opportunities waiting for them in London.

These make it possible for Birmingham to be one of the start-up centres of Europe, but the culture, people and relaxed pace of life make it a city that people want to live, work and play in. It might be too soon to predict a return to the glory days, but given their independence and individualism, Birmingham residents are doing their best to get there as soon as possible.

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