Last week, UK Chancellor Rachel Reeves announced the government’s plan to “kick start” the UK’s faltering economic growth, including by building “Europe’s Silicon Valley” between Oxford and Cambridge.

However, new research commissioned by ecosystem experts Capital Enterprise shows that Manchester, Liverpool and Leeds are among the top locations for UK entrepreneurs to start new businesses.

Manchester was the most-favoured city outside London when decision makers at UK technology businesses were asked which UK city they would choose if they started a new business.

The research by the not-for-profit startup support organisation also found that Edinburgh was in fourth place, while Liverpool was ranked five out of more than 40 cities for starting a new business, ahead of Oxford, Cambridge and Bristol, and placing an impressive two North Western cities in the top five. A little further down the rankings were Glasgow in eighth place, while Leeds came in 11^th..

Key findings included:

• 28% of leaders believe Manchester would be the best city to start a new business
• 28% also believe London would be the worst city
• 100% said local talent availability was important, with over half citing it as a key factor in deciding where to build and grow
• 84% of those surveyed feel an area’s transport & connectivity is either ‘very important’ or ‘essential’
• 44% listed entrepreneur and business support as a factor that would influence choice of location

The research highlighted the potential for a cluster of cities in North West England to play a key part in boosting the UK’s start-up sector and its overall economic growth.

Last month, the Mayor of Greater Manchester, Andy Burnham announced a 10-year growth plan which he said could add £13 billion to the UK economy.

Jonny Clark, who leads Capital Enterprise, said: “Tech entrepreneurs are increasingly drawn to the North’s growing innovation hubs, not just for affordability but for the strong networks of talent, transport links and business support they provide. By enabling founders to access funding, support and world class talent, programmes like the Turing Innovation Catalyst AI Accelerator are vital in stimulating these dynamic startup ecosystems. These factors propel founders to fulfil their potential to become major employers, drive economic growth, and shape the region’s future.”

Liz Scott, director at Manchester’s Turing Innovation Catalyst, added: “This new research reflects what we see on the ground: tech entrepreneurs are gravitating to Greater Manchester because it combines access to talent with leading research hubs and a close-knit business support ecosystem. By empowering entrepreneurs and innovators from across the region, Turing Innovation Catalyst Manchester plays a key role in connecting startup founders with the mentorship and investment they need to succeed.”

Research by Capital Enterprise also found that, despite North West cities being among the favourite places to start a new business, more than half (55%) of business leaders believe the UK government could do more to encourage start-ups outside London and the South East. Nearly eight-in-ten (78%) business leaders questioned said that business support, incubators and accelerators are “very” or “extremely” important in encouraging new business growth.

Martin Fergie, founder of Spotlight Pathologies – one of the startups on the Turing Innovation Catalyst programme, that uses AI to enable precise blood cancer diagnoses – said: “Manchester is an ideal base for an AI medtech startup, combining world-class clinical research, leading cancer institutes like The Christie, and a thriving tech ecosystem supported by major global companies—creating the perfect environment for innovation and growth.”

The research was done online by Research Without Barriers – RWB. All surveys were conducted between 16^th January 2025 and 28^th January 2025, and came from a sample comprised of 303 decision makers in UK technology businesses of all sizes.

The Turning Innovation Catalyst will be spotlighting its most recent accelerator cohort at the Innovation with Impact AI Startup Showcase, taking place on 5th February.