Over the past year, the number of UK start-ups has been growing fast. In 1980 there were 700,00 small businesses – this had grown to 5.4 million by the beginning of 2016. According to the UK government, small businesses have created more than 15 million jobs and contributed £1.8 trillion to the UK economy.
The government has done much to encourage entrepreneurial spirit within the UK, providing start-up loans and incentivising venture capital firms by lowering business regulations.
However, there have been a number of complications
2016 has not provided the best environment for new start-ups to enter the UK market, due to falling investment and a slow economic start to the year. By July, worries that the UK’s exit from the EU would prevent access to European markets reduced confidence further, bringing the UK’s start-up environment into question.
Berlin attempts to lure UK start-ups to the German capital
Berlin has been a strong challenger to the UK’s dominance in the start-up sector, overtaking the UK in terms of venture capital investment in 2014. In August the Berlin senate wrote to hundreds of UK start-ups with headquarters in London to incentivise them consider relocating to new start-up community in the German capital, which is expected to open its doors in September.
Cornelia Yzer, Berlin’s senator for the economy, technology and development said: “We want to make sure that British start-ups and international talent feel welcome here. Brits already love Berlin – we see that from the number of people who travel here every weekend. We will continue to receive them with open arms.”
However, it appears London still has advantages.
Regulatory issues still hamper Germany’s ability to draw start-up businesses to its capital, especially since the process needed to open a business in Germany is still more difficult and lengthy than in the UK.
The British government has vowed to improve conditions for small businesses in any way possible and provide the best possible start-up environment in the UK.
Gerard Grech, chief executive of Tech City UK, the government body tasked with fostering East London’s tech scene, commented: “[I am] listening to the community and will be informing government on the policies that need to be put into action.”
“We are confident that further initiatives and policies will continue to evolve to ensure London stays a global tech powerhouse.”
Several British businesses have also weighed in on the debate, with an overwhelming majority set on staying in the UK.
FinTech companies have vowed to stay true to the UK’s capital.
Katharina Fleiner 30/09/2016
