London is still the best place in the UK to do business, although its competitive advantage over the rest of the nation is narrowing, new indicators suggest.
The UK Competitive Index 2006 reveals that London, along with the east and the south east of England, has registered a fall in its competitiveness since last year.
Conversely, huge improvements in competitiveness were seen in Northern Ireland, Yorkshire, Wales and the north east.
London and its surrounding regions however continue to perform above the average level of UK competitiveness. Out of the top 25 most competitive localities, 23 are in London and the south east.
The index measures competitiveness by blending factors such as research and development expenditure, start-up rates, skill levels, exports, productivity, employment and salary levels.
The findings appear to herald a closing of the north-south divide, since the most pronounced gains in relative regional competitiveness all come from outside London and the south east.
Northern Ireland tops the list of regions that have increased their competitiveness (4.4% up on last year’s score), followed by Yorkshire, Wales, the north east and Scotland.
Dr Robert Huggins, who compiled the UK Competitiveness Index, published jointly with The Work Foundation, said, “For as long as most of us can remember, the story of the UK’s economic performance has been a tale of two nations – the go-ahead London and south east region and the north and west of the country stuck in the doldrums of post-industrial blight.
“This year’s UK Competitiveness Index represents the first signs that a new chapter is about to be written,” he added.
However, the Work Foundation warns that major problems exist at a national level, with the index showing that business start-ups have fallen in all regions.
© Crimson Business Ltd. 2006
