Bristol and Edinburgh are emerging as the unexpected engines of Britain's creative economy, sending the country's fastest-growing workforce to tech companies, emerging universities and patent holders, according to new research that reveals a persistent funding gap in the so-called golden triangle.
The number of new companies in Bristol jumped by 65 per cent between 2019 and 2024, while Edinburgh rose by 43 per cent over the same period, well ahead of Oxford at 40 per cent and Cambridge at 26 per cent, the analysis of almost 40,000 businesses revealed.
The study, carried out by research firm Beauhurst, classifies a “new” company as one that is likely to be a spin out from a university, that receives new funding of £100,000 or more, a patent holder, or a technology business that has received equity investment.
However, despite the increase in the number of workers in the regional centers, the capital is still concentrated in the south-east. As much as 80 per cent of UK investment still finds its way to London, Oxford or Cambridge, the report finds, a figure that could spark debate over whether Whitehall's talk of raising standards matches the reality of the private sector.
Karim Bahou, head of engineering at Sister, the Manchester-based innovation district that commissioned the study, said the project was designed to shed light on the structural causes of the funding gap that continues to plague the region's cities.
Manchester itself, Bahou's analysis found, punches above its weight. On a per capita basis the city is the size of the capital, each boasting two new companies per 1,000 residents.
Bahou is now urging cities outside the golden triangle to create so-called “innovation corridors” between them rather than continuing around London. Corridors, which have established networks connecting regions that often interact with each other in finance and company formation, allow capital, talent and intellectual property to flow freely throughout the country.
Scotland's central belt is the best. The Edinburgh-Glasgow corridor already includes 448 partnerships, including 378 investments and 70 research grants, making it the most deeply integrated city-to-city innovation network in the UK.
“Up in Scotland we see really strong links between Glasgow and Edinburgh. This is where we think there is an opportunity to use the Scottish model across the country,” said Bahou.
The report continues to recommend the transfer of research and development tax incentives to regional authorities, the establishment of dedicated regional investment funds to open the flow of deals beyond the capital, and the development of innovation regions, Dadewethu itself is cited as an example, to keep intellectual property and talent concentrated in the area.
“We have the Northern Powerhouse Fund, and that is very good. We should double down on funds like that, which are focused on certain regions and the potential they bring,” said Bahou. “But investors should come and see what's happening in the north, we have amazing businesses here.”
