UNLOCKING THE POTENTIAL OF REGIONAL ENTREPRENEURS

3 July 2014

The performance of the UK’s regions in supporting enterprise is revealed by an in-depth study published today. The Santander Enterprise Index (SEI) provides the first comprehensive review of how effectively entrepreneurship is supported across the country and shows that overall the UK performs well, with its regions ranked between 2nd and 59th of 125 EU regions1.

However, the analysis, which assesses factors within categories of ability, attitude and aspiration, reveals large variations within the performances of the different UK regions. This is primarily due to a greater premium being placed on aspiration in certain areas of the UK. Santander believes that boosting aspirations in the lower ranked regions will be vital in encouraging enterprise in those locations.

Santander commissioned the world-renowned Global Entrepreneurship and Development Institute (GEDI) to develop the Index. It shows that the London region and the South East perform extremely well relative to other regions, respectively ranked second and ninth of all EU regions. By contrast, the East Midlands, Wales and the North East don’t score as strongly and are ranked 42nd, 45th and 59th of the 125 across Europe.

GEDI’s analysis shows that London’s strong performance in the SEI ranking is due to its ‘aspiration premium’. While societal and economic infrastructure in the rest of the UK is strong, entrepreneurs and potential entrepreneurs do not appear to be displaying the same confidence to take advantage of it as their peers in London; too few are getting new products to market, adopting new technologies, or exporting their products and services overseas. GEDI believes that this relative weakness in aspirations may be acting as a bottleneck that is preventing UK regions from performing at their maximum potential.

The table below shows the ranking of UK entrepreneurship ecosystems, giving the separate rankings for factors within the categories of Attitude, Ability and Aspiration.

Region Overall Score Rank EU125 Attitude Rank EU125 Ability Rank EU125 Aspiration Rank EU125
London  79.9  2  79.0  5  83.0  2  77.7  2
South East  69.5  9  70.7  9  80.0  3  57.9  28
East of England  61.5  22  63.4  24  64.1  25  57.0  30
 South West  60.7  24  63.6  22  68.1  16  50.4  47
 North West  59.0  28  62.3  25  65.9  21  49.0  49
 Scotland  59.0  29  59.8  32  72.2  12  44.9  67
 West Midlands  58.6  33  62.0  26  66.0  20  47.6  53
 Northern Ireland  58.0  35  58.8  34  62.7  29  52.6  43
 Yorkshire &The Humber  56.4  40  61.7  27  62.2  31  45.4  65
 East Midlands  55.3  42  61.6  28  62.1  30  42.2  70
 Wales  54.7  45  57.8  36  61.2  32  45.0  66
 North East  48.9  59  54.7  42  56.3  46  35.8  89

 Source: Santander Enterprise Index, July 20141

Santander has launched a wide ranging package of support for entrepreneurs designed to help all regions take advantage of the aspiration premium. These include

  • The new Santander Business Incubator in Liverpool – Santander is the first UK bank to create a physical environment, which provides early stage SMEs with fast-growth potential access to space, facilities and support. The scheme does not take equity in the start-ups (unlike many other schemes that take 6-8pc), nor charge for office space

  • A $100m investment fund – the Santander Fin-Tech Fund – launched today - specifically targets start-ups in the fin-tech sector 

  • Funding circle partnership – the first partnership between a UK bank and an online alternative finance provider which will give thousands of small British businesses greater access to finance

  • Santander Trade Portal & Trade Club – an online information platform and networking centre, which enables businesses to explore and exploit import and export opportunities through both demystifying the process and providing connections to up to five million SMEs around the world

  • The new “Santander Passport” for companies, which will give customers carrying out business abroad access to the same services at the group’s subsidiaries in other countries, providing them with dedicated local support as in their home market, taking into account their overall relationship with the Bank

Ana Botin, chief executive of Santander UK, said: “Enterprise is a crucial engine of economic growth – enterprise and entrepreneurs drive innovation, productivity growth, and job creation.

“By building partnerships we can develop entrepreneurship ‘ecosystems’ to support today’s successful modern entrepreneurs; and thus enable regional and national economies to thrive. The Santander Enterprise Index will help start a conversation on how to unlock potential across the UK; to a point where success becomes inevitable.”

Santander has commissioned GEDI to carry out further analysis into the findings, with a specific focus on two case study regions – the North West and the East Midlands. Working with local business and support organisations, Santander and GEDI aim to identify the key factors holding back their performance and make recommendations on how those regions can use the aspiration premium to maximise their potential.

- Ends -

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Notes to editors

  1. Source: Santander Enterprise Index July 2014. To download a full copy of the report click here

About the Santander Enterprise Index
The Santander Enterprise Index (SEI) is an annual index that uses GEDI’s metho¬do¬logy to measure the health of the entrepreneurship ecosystems in each of the UK’s12 geographic regions. It then ranks the performance of these against each other, and against 113 other geo¬graphi¬cal regions within the European Union. This provides a picture of how the UK performs in both the domestic and international context.

The GEDI methodology collects data on the entrepreneurial attitudes, abilities and aspirations of the local population and then weights these against the prevailing social and economic “infrastructure” – this includes aspects such as broadband connectivity and the transport links to external markets. This process creates 14 “pillars” which GEDI uses to measure the health of the regional ecosystem. A region in which all 14 pillars are strong can be said to have a healthy entrepreneurial ecosystem and is likely to have a dynamic economy where entrepreneurs make a healthy and productive contribution toward economic growth (see Appendix II for a full description of all 14 pillars).

About GEDI
The Global Entrepreneurship and Development Institute (GEDI) is a non-profit organisation that advances research on links between entrepreneurship, economic development and prosperity. The institute was founded by world-leading entrepreneurship scholars from the George Mason University, University of Pécs and Imperial College London.

The main contribution of the Institute is the GEDI index, a breakthrough advance in measuring the quality and dynamics of entrepreneurship ecosystems at the national and regional level.

The GEDI index methodology, upon which the data in this report is based, has been validated in rigorous academic peer reviews and has been widely reported in media, including in The Economist, The Wall Street Journal, Financial Times and Forbes. The methodology has also been endorsed by the European Commission and has been used to inform the allocation of EU Structural and Cohesion Funds. The theoretical approach of GEDI has also influenced entrepreneurship policy thinking in transnational organisations such as United Nations Conference on Trade and Development.

About Santander
Santander Corporate & Commercial
provides dedicated relationship banking support to businesses with a turnover of more than £250,000. It is part of Santander UK plc, a leading financial services provider in the UK offering a wide range of personal and commercial financial products and services. At 31 December 2013, Santander UK had more than 14 million active customers with c. 20,000 employees, c. 1,000 branches and 50 regional Corporate Business Centres. Santander UK is subject to the full supervision of the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) in the UK. Santander UK plc customers are protected by the Financial Services Compensation Scheme (FSCS) in the UK.

To support trade capabilities across the globe, Santander has an International Desk in each of the markets it operates in, dedicated to helping customers who want to grow their business overseas. Its multilingual teams have extensive market knowledge of the countries covered by Santander's network, including details of local macroeconomics and the financial, regulatory, legislative and business environment. Santander is committed to lending to businesses at different stages of their development, including those ready to begin their international journey. Santander UK has a team of highly experienced trade specialists based across the UK who will work with businesses to gain a full understanding of their current and future aims and objectives.

Banco Santander (SAN.MC, STD.N, BNC.LN) is a retail and commercial bank, based in Spain, with a presence in 10 main markets. Santander is the largest bank in the euro zone by market capitalization. Founded in 1857, Santander had EUR 1.24 trillion in managed funds, 103 million customers, 13,927 branches – more than any other international bank – and 182,958 employees at the close of 2013. It is the largest financial group in Spain and Latin America. It also has significant positions in the United Kingdom, Portugal, Germany, Poland and the northeast United States. Santander registered EUR 4.37 billion in attributable profit in 2013, an increase of 90% from the previous year.

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