- B&NES can be characterised as an economy of high value with slow growth.
- The authority ranks low for social and economic growth but high for dynamic growth (a measure of quality of economic growth).
- B&NES ranks particularly highly for GVA per job and workforce in knowledge-intensive businesses.
- Overall, business start-ups have fallen over time from Q3 2011 to Q1 2015
- The largest decreases in new start-ups tend to be in industries with lower GVA (value)
High Growth Index
This index analyses growth at a local level on a range of economic, demographic and environment measures including business and employment density, business types, workforce skill, economic activity and retention, transport and access to services. It identifies those places that have experienced the fastest growth over the past 8 years (2004 – 2012) both by scale of growth and rate of growth.
Bath and North East Somerset gets a combined growth score of 80.67, which ranks the authority 235 nationally. In comparison, Bristol ranks 25thwith a measure of 150.3. This characterises B&NES as an area with low social and economic growth, as broken down in figure 1 below;
Figure 1: The characteristics of an area of low social and economic growth
This looks at past areas of growth and ranks by assessing a range of productivity drivers and indicates the quality of growth – places where growth has contributed towards local economic value. The key measure in this is Gross Value Added (GVA) by job to describe productivity. It also uses indicators with a very strong correlation to productivity – presence of knowledge intensive businesses, workforce in knowledge occupations, highly skilled resident workforce and high business formation rate.
Bath and North East Somerset gets a dynamism index score of 114.94, which ranks the authority 80th nationally. In comparison, Bristol ranks 38th with a measure of 129.1. The authority in particular ranks highly for GVA per job and workforce in knowledge-intensive businesses.
High Growth vs. Dynamic Growth
When looking at these two measures together, they characterise Bath and North East Somerset as an economy of high value that is slow growing. Areas like this tend to be places on the fringes of cities which have attracted more specialised high value/high tech businesses and have an opportunity to build on their dynamic enterprises and business stock successes by encouraging further growth. Figure 2 shows where Bath sits in relation of other Key Cities nationally on these combined measures, with Southampton being the other key city with similar growth characteristics.
Figure 2: Growth vs. Dynamism for key cities in England
New Small business start-ups 2008-2015 3
New Business Start-Ups are measured by openings of first current accounts from bank’s small business product ranges and represent ‘mainstream’ start-ups. It excludes businesses operating through personal accounts, those without banking relationships or those banking with other institutions.
Figure 3: Numbers of New business start-ups for all industries Q1 2008 to Q3 2015
Overall, numbers of New Business start-ups have fallen over time since their highest point in Q3 2011 (462 start-ups) to their lowest point in Q1 of 2015 (293 start-ups), a reduction of 37% over a 3 ½ year period.
Business Start-Ups rates are calculated as a figure per 10,000 working age population to take into account population variation and growth.
Figure 4: Business start-up rate per 10,000 working age population, all industries Q1 2008 – Q3 2015
The Rate per 10,000 working age population over the same period shows a near identical trend, and confidence intervals demonstrate the decline in start-ups since 2011 is statistically significant.
Figure 5: New small Business Start Ups 2008 – 2015: Not for profit organisations
As part of the Bath Economic Strategy Review 2014-2030, the theme covering business growth sets increasing social enterprise start-ups as a strategic outcome4. Figure 5 shows an overall decline in new start-ups of not for profit businesses over the period of 2008 to 2015.
Trends by ‘value’ of industry output 5
GVA (Gross Value Added) is a measure of productivity that represents the relative value of every industry in terms of output generated. This is best measured in output per hour by ONS SiC (Standard Industry Codes) codes at a national level.
The largest increases in new business start-ups was seen in the food, beverages and tobacco, and information and communication businesses.
Figure 7: New business start-ups for high GVA industries
The most obvious changes over the time period are an overall decline in real estate activities, though there is a great deal of variation in the data. There has also been a marked increase in the information and communication sector over the same period. Historically, there has been very little variation in new business start-ups for the various manufacturing and finance sectors that produce the highest GVA nationally, which likely reflects the economic picture of B&NES as a primarily service sector economy.
- 1. Grant Thornton – A Place Analytics presentation to Key Cities – April 2015
- 2. Grant Thornton – Where growth happens, the high growth index of places – Autumn 2014
- 3. Bath and North East Somerset Start Ups Report October 2015, BankSearch Information Consultancy Ltd.
- 4. B&NES Strategy 2014-2030 http://www.bathnes.gov.uk/sites/default/files/siteimages/Planning-and-Building-Control/Major-Projects/ba192_economic_strategy_05.pdf
- 5. ONS – Labour Productivity, Q2 2015 http://www.ons.gov.uk/ons/taxonomy/index.html?nscl=Labour+productivity