4. Innovation and Enterprise
This note accompanies workbook 4, Innovation and Enterprise, and provides high level commentary on what the information illustrates.
Business Start-Ups
Business start-ups are an indication of entrepreneurialism and innovation and it is within these business start-ups that the jobs of the future will be created. However, rising start-ups can also signal times of economic distress, survival and positive churn within these start-ups are what matters.
Based on data made available by ONS in 2011, there was a net gain of 715 enterprises in 2011. With 4,505 new enterprises created and 3,790 enterprise deaths. The number of enterprise deaths in the West of England peaked in 2009 at 4,560; this is unsurprising as it follows the recession in 2008/9.
Since 2006 the survival rate of new enterprises lasting one-year has decreased year-on-year. This reflects the impact of the recession and potential lack of available finance and business support to new enterprises.
There is a general pattern of peaks and troughs in the number of business start-ups throughout a year, with a yearly low during the 4th quarter. The number of business start-ups following on from 2008 recession picked up in the 3rd quarter of 2009, this trend was largely sustained until the 1st quarter of 2012. While the business registration peaked in Q1 2012 for the WE there have been four successive quarters of shrinkage but notably B&NES grew in two of those quarters and N Somerset in the most recent quarter.
Number of Enterprises
ONS Business Demography data places approximately 40,860 enterprises in the West of England in 2011, this is an increase of 125 enterprises on 2010. The West of England is one of five LEP areas (outside of London) which saw a net increase in the number of enterprises between 2010 and 2011. This figure differs to the number of enterprises set out under the number of SMEs as the data is provided through different surveys. However, the number of enterprises in the West of England accounts for 2% of all enterprises in England in both data sets.
Number of SMEs
The Inter-Departmental Business Register places approximately 36,635 business enterprises in the West of England. This accounts for approximately 2% of all businesses in England.
SME’s (business with less than 250 employees) make up the majority of businesses, with 99.5% of all businesses in the West of England being classified as SMEs. This is in line with that for England. A total of 75.5% of all enterprises in the West of England are micro-enterprises in that they employee fewer than 5 people.
Share of Enterprises born in 2008 that survived for 1 year, 2 years, 3years
The survival rate of companies particularly in the early years is heavily dependent on business support and access to finance. After 1-year 93.5% of the enterprises born in the West of England had survived, this was higher than the survival rate for England which was 92.1%. After 2 years 76.5% of the enterprises had survived again this was higher than the survival rate for the whole of England a which was 73.9%. After 3 years 61% of the enterprises born in 2008 had survived again higher than that for England at 57.9%. Compared to other LEPs the survival rate of enterprises in the West of England was average.
Share of Employment in the Knowledge Economy and High and Medium Tech Manufacturing
In 2011 approximately 23.8% of West of England employees were in the knowledge economy (please see definition set out in accompanying workbook). This was the 3rd highest concentration of knowledge economy employees for any LEP (excluding London).
The percentage of people employed in high and medium tech manufacturing is much lower than in the knowledge economy, highlighting the decrease of manufacturing in the UK. In 2011 approximately 3.7% of West of England employees worked in High and Medium Tech manufacturing, this is an increase on 2010 by 0.4%. Although the West of England LEP ranks in the middle of the table when compared to other LEP areas, the percentage of employees is higher than that for England which stands at 3.2%. The West of England also has particular strengths in certain high and medium tech manufacturing such as Aerospace (see workbook and supporting note on sectors).
Patents per 100,000 residents
The West of England is a highly innovative area, having the 7th highest number of patents per 100,000 residents out of all the LEP areas, with 25.6 per 100,000. This is significantly higher than that for England as a whole which stands at 13.0. However, the West of England is lagging behind Greater Cambridge & Greater Peterborough LEP which has the greatest number of patents per 100,000 residents at 55.1.
R&D Income into the Universities
During the academic financial year (1 August – 31 July) 2011/12 the 4 Universities’ in the West of England received approximately £226,598k for research. The largest recipient of research income was the University of Bristol receiving 73.5% of the total research income at £166,604k.
The largest contributor to R&D income into the West of England Universities comes from BIS Research Councils, The Royal Society, British Academy & The Royal Society of Edinburgh, making up 28% of all income received.