Regional economies are the building blocks of UK competitiveness. The nation?s ability to produce high-value products and services depends on the creation and strengthening of regional clusters of industries that become hubs of innovation.
Understanding is growing about how these clusters enhance productivity and spur innovation by bringing together technology, information, specialised talent, competing companies, academic institutions and other organisations. Close proximity, and the accompanying tight linkages, yield better market insights, more refined research agendas, larger pools of specialised talent, and faster deployment of new knowledge.
In our global economy, place matters more than ever. Even as technology, capital and knowledge diffuse internationally, the levers of national prosperity are, in fact, becoming more localised. As talented people and new ideas become the most critical drivers of economic growth, regional economic conditions have assumed greater importance. Regions that can attract talented residents and support the development of highly innovative firms will support great prosperity. Regions that rely on low-cost labour and basic extraction of natural resources will not.
From a regional perspective, while London, the most densely populated region of the UK, has almost 53 venture-backed companies for every one million people, it is Scotland that leads the way on this measure. North of the border, there are 54 companies per one million people, with £435m institutional investment and an average of £3.2m per company.
Along with London, Cambridge, Oxford and the Thames Valley, Edinburgh and Glasgow have become the best-known innovation hubs in the UK. These developing clusters are attributed to the pool of experienced entrepreneurs, based within the regions, who have previously received venture financing.
It is these serial entrepreneurs who are essential in encouraging new ventures by others and are often active in backing these ventures as executives or as business angels.