The Entrepreneurs’ Forum has welcomed new figures showing a growth in the number of businesses employing people in the North East, but called for more to be done to support start-ups and growing companies in the region.
The complex Business Population Estimates, published this morning, have shown that there has been a fall in the overall number of private businesses in the North East. However:
There has been an increase in the number of businesses that employ people, from 37,900 to 38,900.
There has been long-term growth in the number of private sector businesses in the North East, from 123,700 in 2010 to 135,500 in 2015.
The number of employing businesses of all sizes, up to 250 employees, has increased in relation to 2014.
Nigel Mills, Chairman of the Entrepreneurs’ Forum, said: “Digging into these complex statistics shows that, while the headline figure of a reduction in the number of business in the region is disappointing, the broader news for the North East is better, with a strong increase in the number of employing businesses in the region. It is particularly pleasing that this upward trajectory is both a short and long-term trend.
“However, we must look at the report as a whole and see it as a warning that more must be done to support small businesses and help them to grow to become the employers of the future. We need more businesses employing more people. At present, we have 629 private businesses per 10,000 head of population here in the North East, which is 399 short of the national average, compared with 306 last year, so we continue to lag well behind. What we have seen in the North East, with a significant reduction in the number of businesses that are not employing people, reflects a national trend, where people have started their own enterprise, but then reverted to the security of direct employment, without moving to the next level as an SME.
“The challenge now is to support such new businesses to get them to the point where they can start to employ people, as we know that all net job growth comes from businesses that are less than five years old.
“Here in the North East, we continue to see entrepreneurs striving to support their peers and start-ups, as part of a wider regional environment that backs enterprise, through a mix of public, private and academic-led programmes.
“That support is out there, to help these start-ups to thrive, rather than fall by the wayside, but it is clear that more needs to be done to raise awareness of the help available. Assistance including the new Innovation Unit from the North East LEP and the funds available through Tees Valley Unlimited, the Tees Valley LEP, are vital to reversing this trend, which has accelerated to the potential detriment of future job creation.”