New Business Hot Spots: a Big Data challenge

We wanted to use our data to see if the most recent evidence supports the idea of a northern powerhouse with strength in depth to rival London. Our data shows that new businesses are almost entirely being set up in the centre of the Northern cities and they show no sign of the diversity familiar to the London Boroughs. Manchester, Leeds, Birmingham, and even Glasgow and Edinburgh are all present because their central Ward has a rate of formation close to those in Inner London. It is clear that despite the ranking of individual wards outside London, these data show the absolute dominance of high-density urban settings for new company formation.

To find those locations where a larger than average rate of new company formation is occurring it was first necessary to identify and remove a lot of ‘noise’ from our data. Thankfully we are beginning to understand the complex ecology of company location, particularly in their early stages of development. So for example, our systems have identified and characterised the Umbrella Company, those companies registering large numbers of companies to accommodate the needs of sub-contractors. These businesses are amongst the most prolific of new company registrations and put other sectors such as digital start-ups into perspective. A second and flourishing ‘hot spot’ is the virtual company location, businesses providing an accommodation address for Company and VAT registration, a postal address and other facilities. Some of these companies draw a lot of business from the digital economy providing German, French and Chinese companies for example, with a registered address for their online sales businesses in the UK. Of course, there are also traditional businesses such as Law Firms and Accountancy practices which offer registered office facilities for their clients.

To solve these and other problems and provide a picture of genuine new businesses and their initial locations we took our most recent data for the last quarter of 2015 and identified every newly registered trading business in mainland Britain. We then counted the number of new, different business addresses in every Ward to avoid problems caused by specialist companies and addresses where dozens and even hundreds of new businesses have their trading address. Finally, we created a file which ranked every ward regarding the number of different new business addresses they acquired in the last quarter of 2015.


Also, Central Ward in Liverpool came in at number 33 in our top 50.



Also, Central Ward in Liverpool came in at number 33 in our top 50.