- Rhondda Cynon Taf in Wales ranked 99th with a score of 1.4 out of 10, posting the lowest five-year business survival rate
- Birmingham ranks last with a score of just 0.7 out of 10, recording a 92% decline in new business creation.
- London boroughs secure three of the top spots, despite experiencing a 54% drop in new business registrations between 2021 and 2023.
A new study by the SEO agency Startup Voyager has identified the UK’s best locations for startups, with London boroughs claiming the top three spots.
The study analysed the 100 most populated UK local authorities, ranking them on factors including five-year business survival rates, employment growth, startup funding, and new business creation figures. Each area was then scored out of 10.
Camden leads with a score of 7.4 out of 10, recording 2,555 new businesses per 100,000 residents in 2023. The London borough maintained strong performance despite experiencing a 54.4% decline in new business registrations between 2021 and 2023.
Islington is second with a score of 6.8 out of 10, benefiting from a 36.1% five-year business survival rate and 1,903 new businesses per 100,000 residents in 2023.
Third-placed Hackney scored 6.4 out of 10, showing the highest five-year business survival rate (41.1%) among the top three areas, though it experienced a steeper 63.7% decline in new business creation.
Solihull emerged as the highest-ranked non-London location, taking fourth place with a score of 5.7 out of 10. The authority posted a solid 40.1% five-year business survival rate, despite creating fewer new businesses (503 per 100,000) than top-ranked areas.
Highland in Scotland ranked fifth with a score of 5.7 out of 10, demonstrating the strongest five-year business survival rate (45.9%) among the top ten locations, showing that smaller urban areas can offer stability for new ventures.
Merton, another London borough, secured sixth place with a 5.7 out of 10 score. Its 42.9% five-year business survival rate was the second highest among the top ten, suggesting a supportive environment for business longevity.
Armagh City, Banbridge and Craigavon in Northern Ireland ranked seventh with a score of 5.3 out of 10, boasting the highest five-year business survival rate (50.4%) among all top ten areas, but created only 278 new businesses per 100,000 residents.
North Somerset took eighth place with a score of 5.3 out of 10, showing a respectable 42.6% five-year business survival rate and moderate new business creation figures of 476 per 100,000 residents.
Shropshire ranked ninth with a 5.0 out of 10 score, demonstrating a remarkable 50.9% five-year business survival rate – the second highest in the top ten – but suffered a severe 71.6% decline in new business creation since 2021.
Aberdeen City completed the top ten with a score of 4.9 out of 10, showing a five-year business survival rate of 39.7% and creating 385 new businesses per 100,000 residents in 2023.
Table showing the top 10 local authorities for startups
| Rank | Local Authority | Five-Year Business Survival Rate | New Businesses Created in 2023 per 100k | Change in New Businesses 2021-23 | Score (Out of 10) |
| 1 | Camden | 34.0% | 2,555 | -54.4% | 7.4 |
| 2 | Islington | 36.1% | 1,903 | -54.0% | 6.8 |
| 3 | Hackney | 41.1% | 1,721 | -63.7% | 6.4 |
| 4 | Solihull | 40.1% | 503 | -46.5% | 5.7 |
| 5 | Highland | 45.9% | 382 | -53.4% | 5.7 |
| 6 | Merton | 42.9% | 704 | -55.2% | 5.7 |
| 7 | Armagh City, Banbridge and Craigavon | 50.4% | 278 | -64.8% | 5.3 |
| 8 | North Somerset | 42.6% | 476 | -56.7% | 5.3 |
| 9 | Shropshire | 50.9% | 360 | -71.6% | 5.0 |
| 10 | Aberdeen City | 39.7% | 385 | -55.3% | 4.9 |
At the other end of the scale, Birmingham ranked last with a score of just 0.7 out of 10. The city recorded a 92.2% decline in new business creation between 2021 and 2023 – and had a five-year business survival rate of 25%.
Rhondda Cynon Taf in Wales ranked 99th with a score of 1.4 out of 10, posting the lowest five-year business survival rate (22.5%) among all areas analysed.
Liverpool and Manchester placed 98th and 97th, respectively, both showing five-year business survival rates below 30% and experiencing severe declines in new business creation since 2021.
Major cities generally performed poorly, with Glasgow ranked 95th (2.4 out of 10), Leeds 94th (2.4 out of 10), and Cardiff 81st (3.2 out of 10). This suggests that smaller, less congested areas might offer better conditions for sustainable business growth.
The data revealed stark regional variations, with London boroughs claiming eight of the top 20 positions, while Northern England and Wales dominate the bottom rankings.
Peter Banerjea, CEO and Co-founder of Startup Voyager, commented:
“The statistics released today show that the most populous areas aren’t necessarily providing the best environment for startup growth and sustainability. While London boroughs like Camden continue to attract high numbers of new businesses, the exceptional survival rates in areas like Shropshire and Highland tell an important story.
“We’re seeing two distinct patterns in the data. First, business creation has declined across all regions since 2021, likely reflecting the economic challenges and uncertainty of the past few years. Second, some smaller urban areas are outperforming major cities in terms of business survival.
“For entrepreneurs considering where to establish their startup, looking beyond the obvious big-city locations might offer better long-term prospects. The highest five-year survival rates appear in areas with less competition and potentially lower operating costs, which could be crucial factors during a startup’s critical early years.”