by Real Business - Thursday, 30th August 2007

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Think of a dynamic high-tech city, the one most favoured by Britain’s entrepreneurs. Then think bicycles. If they could move anywhere, British entrepreneurs would most like to move to Oxford. This is the striking conclusion of the “Best Cities for Business” survey, carried out by Real Business and Black Horse Relocation.

In April 1998, we sent our readers a questionnaire. We asked them to tell us about where they work - and where they would like to work. And we made some startling discoveries: about the reasons that companies move; about what makes a business suitable to an area; and about how some poor souls have to stick where they are.

First to Oxford. We asked, “Given a free choice, if your company was thinking about relocating to a completely different area, which three cities would you like to relocate to?” Then we ranked the responses to reach our top ten. They are: 1 Oxford; 2 Cambridge; 3 Edinburgh; 4 Manchester; 5 Bristol; 6 London; 7 Leeds; 8 Nottingham; 9 York; 10 Newcastle-upon-Tyne.

It’s evidence of Oxford’s growing stature. Cambridge is still regarded as Britain’s high-tech centre, but Oxford is catching up. Philip Allen (see case study) considered both cities when launching DecisionSoft earlier this year, but plumped for Oxford. He won’t be the last to make such a choice.

DecisionSoft is a typical modern business and sums up many of the themes of our survey: small and technology-based, it needs a constant supply of bright staff to develop; and decent transport links to stay in close touch with clients. But it doesn’t need - although this can rankle with Allen - to be in the centre of the financial community it serves. Based at Oxford Science Park, it’s just as important to Allen to be close to like-minded firms to exchange ideas and pool resources.

“With its science park and reservoir of graduate talent, Oxford offers excellent opportunities to network and a ready-made recruitment pool,” says John Carolan, managing director of Black Horse Relocation. “It’s the perfect SME package.”

He’s not surprised Cambridge comes in second. “Given that so many niche start-ups are concentrating on computer software and hardware, engineering and bioscience, Cambridge becomes a very attractive option.” What does surprise Carolan is the “fall from grace” of the traditional business centres such as London and Birmingham. “Some of the softer factors - quality of life in particular - are militating against them,” he says.Many of our respondents were loyal to their area, nominating nearby cities as their favourite potential destination. So for businesses based outside the south-east, the front runners are Manchester and Leeds; Scottish businesses covet Edinburgh. Mike Somers runs a property business near Leeds. He’s happy as Larry. “I know that many professional people are leaving London to come and live in this area.”

The importance of being here - or there
Businesses are infinitely flexible about where they locate. You can, almost, be wherever you decide. John Roland (see case study) could have taken his digital design business to either Florida or Wiltshire. He chose Wiltshire.

One thing will always matter: people. We asked our readers to rank nine factors about where a business is located. And top of the ranking is the quality of the available workforce. Technology may be able to cheat geography, but it can’t transform an unsuitable pool of labour. Some 27 per cent of our respondents rated the local labour supply as the number one factor about a business location. In the East Midlands and the south-west, it was seen as particularly important.

Close behind people came property and premises (22 per cent rated this at number one) and the transport network (23 per cent). The combination of the three factors provides a pretty strong case. When thinking about their location, growing businesses want the holy trinity: decent people from whom to recruit; good properties; and quick access to their markets.

A final thought on locations. Growing businesses are surprisingly drawn by the opportunities for business networking - some ten per cent considered this the most important factor about a business’s location. Running a business can be a lonely job, so it’s nice to have a few people to talk to.

Satisfied customers
So are businesses’ needs being met? In general, yes. Across our range of “location factors”, most people seem in good spirits. Okay, only one in five businesses feels that it is being well served in terms of the quality of the available workforce; business people in the north-east are most critical. But these have been boom times. Skilled labour has been in short supply.

Some 20 per cent seem very happy about their property and premises; here, respondents in the north-east are most positive. And a mind-blowing conclusion from the traffic-obsessed British - 30 per cent feel the transport network meets their needs. As for quality of life issues, some 80 per cent seem chuffed to bits. John Roland sells his company to new employees on the quality of life. “They must positively want the lifestyle on offer,” he says. “Our staff have come from all over the country and they love it.”

One area of concern is support from organisations such as local authorities, Business Links, TECs etc. Surprisingly, this was a minor issue in why a business chooses its location. And over one-third of respondents reckon that the quality of support in their area is poor. Paul Meechan of Star Recruitment says of his local council in Manchester: “They like to have business in their area, but they don’t like to do anything to help you.”

Business networking opportunities are well covered in Scotland and the north-east. Owner-directors in the south-east are, perhaps not surprisingly, more concerned than elsewhere about the cost of their workforce; and they are not impressed by the performance of their business support agencies - 41 per cent of respondents in the south-east rated them as poor or very poor.

Will people move with you?
We wanted to gain a picture of the business health of our respondents. So we asked whether their workforce had increased over the past year - and how this might change in the next.

And we found a sprightly bunch. Over two-thirds (69 per cent) said their workforce had increased in the past year. In the West Midlands and Yorkshire & Humberside, the figure was even higher (75 per cent). Only 12 per cent had seen their employee numbers drop in the past year.

And, most positive of all, three-quarters of respondents expect to expand the workforce in the coming year (only three per cent foresaw a decrease).

All of which means: the sometimes awkward business of bringing in new people. Over one-quarter of our sample (28 per cent) had recruited someone who had to relocate (this figure was, perhaps not surprisingly, highest in Scotland).

So what was the process like? On the whole, it’s not too tricky - 61 per cent described it as “straightforward”; 34 per cent admit that it can be “time-consuming.” However, almost a quarter of businesses said that they had lost an applicant because of relocation issues.

Sometimes, though, you just have to improvise. Alex Ross (see case study) recalls trying to recruit a warehouse foreman from Speyside. “His wife wouldn’t move all the way up, so he chose to live in a caravan during the week and went home at weekends.”

Cities and their reputations
Where are Britain’s real entrepreneurial hotspots? We gave our respondents six city descriptions: booming city; high-tech city; transport hub; manufacturing centre, cultural centre; regenerated city. Then we asked them which of the 40 cities they associated most with each description.

Milton Keynes is perceived as the UK’s boom town, along with Leeds, Manchester and Swindon. The latter deserves its inclusion. Along with Mousepower, “sleepy” old Wiltshire also houses such dynamos as Dyson Appliances and Mulberry.

Milton Keynes crops up again under the banner “high-tech city”, along with Cambridge and London. Cambridge merits its tag, as 15 per cent of the city’s workforce is employed in high-tech industries.

It may sometimes be a slow-moving hub, but there’s no doubt that it is one, so Birmingham gets the nod as transport hub, followed by London and Manchester. Mind you, what would have happened if we had included Atherstone?

The great names of British manufacturing still carry their reputation. Birmingham, Manchester and Sheffield may have changed irrevocably - indeed, Manchester is regarded as boom town, transport hub, manufacturing centre and regenerated city all at once - but it will be a long time before they shed their heavy industrial image. Two of the same names - Manchester and Sheffield - appeared when readers were asked to nominate their regenerated city.

Finally, we wondered, where is Britain’s cultural heart? London, Edinburgh and Oxford, our respondents said. But, as we know, an entrepreneurial life can be a taxing one. Perhaps we should have asked our busy respondents whether they ever had the time to pop out to the theatre.

Case study 1: Oxford - the all-round high-tech city

Name: Philip Allen

Company: DecisionSoft Software

Allen worked for three years for a Silicon Valley software company before deciding to strike out on his own. In January this year, he set up a company in Oxford to develop software to support financial trading on the Internet and is confident of breaking even in his first year of trading.

Why Oxford? ”As we are developing software for the financial markets, we need good access to London. Oxford is good for that. And the science park here has excellent facilities.”

What’s the best thing about Oxford as a business location? ”The university means we can hire high-quality staff for reasonable wages. The source of high-quality workers will never dry up.”

And the worst? ”We build software to support electronic commerce on the Internet for financial markets. So not being near our customers in London is a negative.”

How long does it take you to get to work? ”I cycle six miles through the centre of Oxford in about 20 minutes. It’s not too bad.”

Best business lunch venue? ”We don’t entertain much, but the Plough at Dorchester does very good pub food in a lovely environment for a few pounds.”

What are the major business amenities in the area? ”Transport and good roads, particularly the motorways and ring roads which mean that our customers can reach us easily wherever they’re coming from.”

If you could locate anywhere in the world, where would it be and why? ”Before I started up I could have gone anywhere in the world and I chose Oxford. It’s a nice area and offers a good life. It was the right choice.”

Case study 2: Bradford - the regeneration opportunity

Name: Mike Somers

Company: Delaunay Workspace

Somers has lived in the Leeds/Bradford area all his life. Two years ago, he and two partners started up a property regeneration firm. The idea was to approach owners of empty industrial buildings and agree to refurbish them as smaller offices, cafés, car parks, etc - at the owner’s expense. The company gets planning permission, supervises the work and pre-lets the space. In return it receives half the rent.

Why Bradford? ”There aren’t many businesses where the opportunity arises out of the location, but this is one. Leeds is a booming city with a shortage of space, while Bradford just a few miles away is still depressed with many vacant old buildings. There is a strong demand for space, but not for the huge industrial spaces that currently exist. So the opportunity is to transform one into the other.”

What’s the best thing about Bradford as a business location? ”It has a highly trained workforce, high levels of unemployment in surrounding areas and a serious work culture.”

And the worst? ”Communications, particularly trains. In most cases, you have to change in Leeds to get to Bradford - no matter where you are coming from.”

How long does it take you to get to work? “I live in a village five miles away. It’s a 15-minute drive.”

Best business lunch venue? ”I like Paris in Leeds, which does Anglo-French food. Lunch for two might cost £50.”

What are the major business amenities in the area? “It’s got to be quality of life. You can be in the country in five minutes and get to either coast within an hour and a half.”

If you could locate anywhere in the world, where would it be and why? ”I’d have to stay where I am.”

Case study 3: Wiltshire - the rural idyll

Name: John Roland

Company: Mousepower

When John and Judy Roland decided to set up a digital design studio in 1989, they could have gone anywhere in the world. Florida was one option, but they chose Wiltshire. Nine years later they employ 25 people; turnover is around £1m a year. They moved into Hartham Park - a converted stately home - in 1997.

Why Wiltshire? ”First, we wanted good access to our clients in London, Scotland and the Midlands. But there was also a quality of life consideration. We wanted a lot of space and needed somewhere that would allow us to attract the right calibre of staff and retain them. City-based companies can’t afford to develop their staff so much because of higher overheads.”

What’s the best thing about Wiltshire as a business location? ”No business I know has a studio in a grand house set in 50 acres of grounds. But it’s not only beautiful, it also gives credibility with clients. It’s an inspirational atmosphere for work.”

And the worst? ”We are at the end of a country lane which isn’t well maintained and floods a lot. It can make getting to work difficult sometimes.”

How long does it take you to get to work? ”It takes just nine minutes from home seven miles away. I’m shortly moving to Wales to get a bigger house, so it’ll take an hour and a quarter in future.”

Best business lunch venue? ”The White Hart at Ford has won the Egon Ronay best pub award two years running. Excellent food in a wonderful setting.”

What are the major business amenities in the area? ”The regional authorities are very understanding and we have a good relationship with them. “

If you could locate anywhere in the world, where would it be and why? ”Mountain View, California - above Silicon Valley. It’s got a definite buzz that makes you more creative.”

Case study 3: Ben Nevis - the first and last place on Earth

Name: Alex Ross

Company: Ben Nevis Distillery

The Ben Nevis Distillery has occupied its site at the foot of Britain’s highest mountain since 1825. Over the intervening 173 years, the business has changed hands many times. It is now an independently operated subsidiary of a small Japanese distiller, Nikka.

Why Ben Nevis? ”The business was originally located here because the founder lived in the area and thought that the water from Ben Nevis would be particularly pure. But there was also a good supply of peat to fuel the stills and driers. Now there’s no possibility of moving - where else could the Ben Nevis Distillery be?”

What’s the best thing about your area as a business location? ”The rain. It’s a constant free supply of our most precious raw material.”

And the worst? ”The rain. It’s so depressing, it’s unreal. Otherwise, it has to be the transport.”

How long does it take you to get to work? ”Usually about ten minutes.”

Best business lunch venue? ”Inverlochy Castle is excellent. It’s nouvelle cooking in a fantastic setting. But at £50 per head it’s pricey.”

What are the major business amenities in the area? ”There’s a chamber of commerce of sorts. And they’re trying to build a business park. Otherwise, it’s not terribly well developed.”

If you could locate anywhere in the world, where would it be and why? ”It may be lacking in some respects, but on a good day this is God’s own country. Even if it were possible to run the business elsewhere, I really can’t imagine anywhere else I would rather be.”

Contacts
The research for the Real Business/Black Horse Relocation “Best Cities for Business” 1998 survey was carried out by Business & Market Research. A questionnaire was sent to readers of Real Business with the April 1998 edition of the magazine. Some 324 responses (received by June 5, 1998) were analysed for this article.

For copies of the survey report (price £30), contact Charlotte Williams at Black Horse Relocation. Tel: 01753-834000. You can contact B&MR on 01663-765115.

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