Why is Norfolk lagging behind in business births?
PUBLISHED: 09:31 02 March 2011
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New businesses are set to play a key role in securing economic recovery.
But Norfolk is lagging behind many other parts of the country in terms of new start-ups, according to latest statistics – and the trend may be worsening.
Figures from the Office for National Statistics (ONS) show Norfolk had 2,875 business ‘births’ in 2009, equivalent to 9.24pc of active enterprises.
But the rate is lower than the east of England average (9.9pc) – and significantly below the UK average of 10.1pc.
And while a slight rise on 2008, the number of start-ups in Norfolk has dipped from a peak of 3,380 in 2007, and the number of business ‘deaths’ outnumbered births by 425 in 2009 (see panel).
While the 2010 statistics will not be published until the tail-end of this year, the figures paint a clear picture that the county is performing relatively poorly.
Chris Starkie, joint transition team lead for the New Anglia Local Enterprise Partnership (LEP) and chief executive of economic development partnership Shaping Norfolk’s Future, said there were a number of factors contributing to the trend.
He said: “The reasons for the lower rate are a combination of factors including the rural nature of the county and the fact that other areas have more of a history and tradition of setting up in business.
“It is also about whether people who want to start up in business have access to the right support, or whether they draw back from taking the plunge.
“We know creating new businesses is utterly critical to the Norfolk economy. More than 90pc of the county’s businesses are small or medium enterprises.
“Right now we are simply under-performing compared to other parts of the country, and increasing the numbers of businesses which start up is a significant priority for the LEP.”
Achieving this aim will undoubtedly be a major challenge, with one of the key obstacles a lack of free business support.
In recent years, entrepreneurs have benefited from advice, training and assistance with finance, provided by a range of agencies, largely funded by central government.
Enterprise agency NWES has provided free services for start-ups in Norwich and Great Yarmouth funded by Labour’s LEGI (local enterprise growth initiative) scheme, launched in 2007, which has boosted start-up rates in both areas to above the national average.
But the scheme ends on March 31, after which NWES will not provide any free business support in Yarmouth for the first time in 20 years.
The situation will be exacerbated when support network Business Link in its current format is axed on November 25.
The coalition government has unveiled a number of initiatives to help businesses going forward, including a mentoring scheme and telephone and web-based support.
But Kevin Horne, chief executive of NWES, said the result would be that “free, independent advice from professionals will be hard to find”, unless entrepreneurs fit into fixed categories such as long-term unemployed.
He added: “As an area which relies on a high percentage of small firms, we need a buoyant business birth rate to maintain a healthy economy.
“The real impact is yet to be seen, as there is a time lag, but we really need to show that Norfolk is ‘open for business’.”
While official figures only go up to 2009, there is evidence that people are still looking to set up their own businesses, including those who have been made redundant.
NWES has reported a 13pc rise in the number seeking advice on starting up businesses at the Norwich Enterprise Centre, and the increase has been particularly steep among over-50s and women.
And Norfolk is outperforming many other areas in terms of business survival.
For businesses formed in 2006, 68.4pc had survived three years in Norfolk, compared to 66.2pc across England.
Gary Hewitt, head of support and finance, said: “We’ve seen an increase in the global number of people coming in to us. Year on year, it’s been increasing since 2006.
“We are seeing a lot of people coming to us because they see self-employment as a career choice or because self-employment is the only option they are left with because they can’t find work.”
But he said funding cuts were “a concern”, adding: “If the right support is not available they may go into self-employment but with less chance of survival or they may be put off from taking that leap in the first place. It could stifle the local economy.”
Retirement gave a former local government landscape architect the chance to enjoy some of the areas of his work at his own pace.
George Ishmael, 60, who lives near Newmarket Road in Norwich, left Norwich City Council last year after working there for more than 35 years.
He realised there were many things he still wanted to do and areas of work to which he could contribute. He sought advice from the Norwich Enterprise Centre and attended business courses.
He launched his own landscape consultancy firm, Ishmaelandscapes, last June.
His work has already won two awards at the international, UN-sponsored, LivCom Awards in Chicago – a gold award and first in class trophy for the city of Norwich and a Special Project Award for ‘Heavenly Gardens’.
Mr Ishmael is also involved in designing gardens, including one to represent Norwich at the German National Garden Festival to be held this year in Norwich’s twin city of Koblenz.
The married father-of-two said: “I love to keep busy and my new business means I can help people with my wealth of experience and continue to be involved in the joy of landscape architecture.
“I can certainly recommend setting up your own business but I have to admit that I am somewhat protected because I have a regular pension income.
“If it wasn’t for that, I think I would need to employ a landscape technician and give more time to bringing in new work. As it is, however, I can experiment a bit and look at new angles to the landscape industry, such as the links to the arts, tourism, and so on.”