When Chris Meah enrolled for a computer coding course as an undergraduate, he soon realised that he had more sisters than there were women in the class. It confirmed his suspicions. “The computer geek character you see on TV is pretty close to the reality,” he said. “Almost everyone is white, nerdy and male.”
The experience inspired him to establish School of Code, which runs 16-week boot camps for aspiring technology whizzes. Birmingham-based Meah, 29, wants to attract as diverse a range of participants as possible. The first boot camp did just that — graduates included a stay-at-home mum, a fine arts student and a probation officer.
School of Code is one of thousands of start-ups founded in England’s second city each year, many of them part of the digital economy. There were 12,108 businesses set up in Birmingham last year, according to research to be released tomorrow by the Centre of Entrepreneurs, a think tank. Data taken from Companies House shows it topped the league of local authorities outside London for creating new companies for a fifth consecutive year.
Is it something in the Brummie water? Perhaps not — Birmingham is, after all, the country’s second-largest metropolis. Yet, as the table shows, it is way ahead of other highly populated rivals, such as Manchester, Glasgow and Edinburgh.
Part of the explanation is that after decades of underperformance since the early 1970s, Birmingham’s economy is now powering ahead.
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Last week, I left the redeveloped New Street station and walked past the new headquarters of HSBC UK. The soon-to-open building is next door to the gigantic Library of Birmingham — a five-year-old architectural masterpiece — or monstrosity — depending on your viewpoint. The city was recently awarded the 2022 Commonwealth Games and will have two stations of the HS2 railway line. The cranes dotting the skyline suggest that the building frenzy is far from over.
How cities compare
The renewed energy in the city has encouraged entrepreneurs to put down roots. “Ten years ago, there was a very mediocre feel about the place,” said Veejay Lingiah, chief executive of education technology business Learning Labs. “Now confidence is on the up. Everything we need is available here.”
Learning Labs, which offers an app to help students who do not speak English as their first language to learn more effectively, has grown rapidly since it was founded in 2012. Lingiah, 44, was able to raise £1m in equity and grant funding through contacts in the city, a feat that might have been impossible 10 years ago.
Despite the potential of Learning Labs and many more like-minded start-ups, it can feel as if Birmingham is overlooked when discussing Britain’s entrepreneurial hotspots.
It does not have the swagger of Manchester, the brains of Cambridge or the urban cool of Bristol. Is the city failing to communicate its potential?
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If it is, it is not for lack of trying. Andy Street, the Conservative mayor of the West Midlands, is cheerleader-in-chief. The energetic former John Lewis boss is never knowingly unenthusiastic about anything, yet admits that Birmingham “could do a better job” of telling its story.
Still, the facts speak for themselves, Street said. “This hasn’t come about by accident. We have a clear view of which transformative parts of the economy that will spawn start-ups.”
Street is especially proud of the region’s digital prowess. He points to about 14,500 digital and tech businesses registered across the West Midlands, which includes Coventry and Wolverhampton as well as Birmingham. “That is about 60% more than Greater Manchester on the same population numbers.”
The explosion in start-ups has come without significant backing from government so far. George Osborne’s Northern Powerhouse initiative does not include Birmingham. A similar project, the Midlands Engine, is up and running and does include a £250m investment fund. However, it is still in its early stages.
“What I would say, in typical Brummie style, is that we’ve got on and done this over the past five years without specific support for our tech sector,” said Street.
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It is not all glory for Birmingham. Like the rest of the UK, the city saw a fall in company formations last year. Overall, the number of start-ups created in Britain last year fell 13.7% to 589,000, according to the Centre for Entrepreneurs. The figure includes distortions, such as businesses classified as contractor accounting firms, which allow individuals to reduce their tax bills by working as a contractor.
Excluding distortions, Birmingham saw a 5.1% year-on-year drop in the number of companies formed. That was less than the average fall across the country, though still disappointing. Nonetheless, the long-term picture looks good, according to Street.
Key to the strategy is retaining graduates from the city’s universities, as well as attracting them from other parts of the country. The West Midlands has plenty of attractions for young workers. The average price of a home is just over £180,000, compared with about £470,000 in London, the latest Halifax house price index shows. And the commute is usually quicker, adds Street.
It all adds up. Matt Hicks co-founded Linear Diagnostics seven years ago as a spinout from Birmingham University. The company is developing a hand-held device to detect infections. Hicks, 45, lives in nearby Sutton Coldfield and can be at his desk in less than half an hour. “It means you can enjoy a nice lifestyle and run a great business,” he said.