Alternative Finance and its role in SME growth
The UK is creating unicorns at a rate of 1 per...read more
For years Birmingham was labelled as the manufacturing and engineering centre of England. It was branded a dreary industrial city, full of concrete that didn’t have much to offer anyone. Many in the UK aren’t even aware Birmingham is classed as the second city, with Manchester and Liverpool being mentioned in its place.
But with over 1 million people living in this city, Birmingham is bursting with new ideas, and for five years running it has formed the highest number of new businesses outside of the capital. Birmingham is showcasing its thirst for growth, through extensive city-wide investment creating exciting opportunities for both established businesses and high-growth start-ups in the region.
For investors, Birmingham represents an ideal investment opportunity. This is broadly down to three key factors. Firstly, it’s an under exploited market for investment, with only 2.6% of the UK’s equity funds being raised in the West Midlands, despite the fact it contains 7.4% of the UK’s highest growth businesses. Secondly, Birmingham is now showcasing the kind of entrepreneurial drive investors look for in a city region, and thirdly it is attracting significant inward investment from both large corporations and central government.
All in all, Birmingham is an opportunity that investors would be wise not to miss. Let’s have a look at this in more detail.
Birmingham has cemented itself as one of Britain’s most innovative cities and was recently named the most entrepreneurial UK city outside of London. This has not happened overnight and is the result of years of hard work to create an impeccable environment for entrepreneurs and SMEs to start their business. The growth of SMEs in Birmingham has increased by almost 6% the last five years, with the city providing accelerator schemes, affordable office space and more importantly, access to a global market. There has also been dedicated support for SMEs in Birmingham, which account for 99.4% of all businesses in the city, helping them to research their market, accelerate their product development and hire the necessary staff to complete both of these aspects.
This start up and entrepreneurial boom, provides investors with high growth potential, and through well managed investment structures, external investors can see significant returns.
The huge growth opportunities that the city offers has drawn in a large quantity of FDI, with more international companies located here than in any other UK city outside of London. Established brands such as HSBC and Deutsche Bank have chosen the city for key parts of their global operations, and The West Midlands Growth Company is working on a consistent basis to attract further FDI, as well as championing developments around the city such as the introduction of the 5G network. This FDI is coming in highly skilled areas such as advanced manufacturing, IT, Creative and Digital and professional financial services. These organisations are choosing Birmingham because of its central location, seamless connections to London, as well as other major cities and key talent at its doorstep.
Acting as both a driving force behind Birmingham’s entrepreneurial spark, and a significant appeal to major corporations is a rapidly growing workforce of young professionals, in various fields from technology to business management. In fact, Birmingham is the UK’s second-largest student city, with five universities, each producing cutting-edge research which supports businesses across the region to stay ahead of competition, as well as providing a large university educated workforce.
In addition to its good existing infrastructure, the city is set to benefit significantly from two major infrastructure projects, the Commonwealth Games in 2022, and HS2 improving the city’s transport links to London in 2026.
HS2 is likely to encourage yet more FDI into the city. With reduced transport times to London, the business case for moving to and investing in Birmingham becomes more and more compelling. Alongside a good value property market and the previously highlighted talent pool, a 49-minute link to London, could well be a tipping point for the city.
The infrastructure around the city will be hugely improved for the Commonwealth Games, providing an economic boost before the Games and an ongoing benefit to businesses. In addition, the Games will provide a shop window for Birmingham, further enhancing the city’s growth prospects over the next decade.
Capitalising on these significant opportunities is a sound investment strategy, and the reason that Midven has established the Greater Birmingham EIS fund. To find out more and request further information, visit: