Although \u201clevelling up\u201d is not part of the government\u2019s vocabulary, reducing the wide economic divide<\/a> between London and the rest of the UK remains high on its agenda. However, levelling-up policies have been criticised<\/a> for being fragmented and lacking coherence, particularly because of the emphasis on large infrastructure investments. Infrastructure is only one of many factors that play into the long-term productivity differences in the UK.<\/p>\n Entrepreneurship and innovation are also central to regional economic competitiveness. But business start-up and scale-up rates are significantly higher in London and the south of England<\/a>, particularly along the M4 and M3 corridors<\/a>. These geographical variations are persistent over time<\/a>.<\/p>\n The lack of high-growth start-ups in the rest of the UK is particularly important. These businesses are mainly located in and around London, with only a thin spread across the rest of the country. In a list of the UK\u2019s 100 fastest-growing companies<\/a>, 36 are in London, with a further 15 in south-east England. <\/p>\n These rapidly growing companies make a disproportionate contribution to job creation, innovation and economic growth. A 2009 report<\/a> found that 6% of high-growth firms create more than 50% of jobs. This proportion has remained stable over the years, even during times of recession<\/a>. <\/p>\n Entrepreneurship needs the right environment to thrive \u2013 places that offer a \u201cfertile soil\u201d with support, talent, finance, markets and connections to start and grow companies. As such, entrepreneur-led levelling up needs an approach that develops these \u201cecosystems\u201d in the parts of the UK that have fallen behind more prosperous areas.<\/p>\n Entrepreneurial ecosystems are environments that bring together not only those who want to start businesses but also the people and institutions who support them. They need mentors with expertise and experience, employees with the right skills, investors who take calculated risks and intermediaries who can make connections.<\/p>\n Nurturing new businesses<\/p>\n So what does it take to build all of this? Our research on the emergence<\/a> and maturing<\/a> of ecosystems offers some important lessons.<\/p>\n It needs foundations. Particularly important are educational institutions that equip students with an entrepreneurial mindset<\/a>. They support enterprise creation and companies that attract and nurture skilled employees \u2013 the kind of people who may be future entrepreneurs or early hires in high-growth companies.<\/p>\n But it takes time. The foundations of today\u2019s successful ecosystems were laid more than a decade ago. Progress is often slow and hard to measure because elements in the ecosystem interact and evolve in unpredictable ways. As such, it is important to focus on long-term indicators of success. This includes those that are difficult to capture \u2013 things like willingness to pursue business opportunities despite the risk of failure, for example. <\/p>\n Thriving entrepreneurial ecosystems are characterised by virtuous circles, with success creating the ingredients that drive further success. Successful entrepreneurs, managers and investors frequently reinvest their wealth and experience<\/a> in their local ecosystem as serial entrepreneurs, business angels, mentors or board members. <\/p>\n And even business failures<\/a> can have positive effects on the ecosystem. Failures can trigger a recycling process as former employees are hired by other local companies.<\/p>\n Recognising that it takes an ecosystem to raise a start-up<\/a> means that collaboration is vital. Outcomes will be limited if ecosystem players \u2013 companies, investors, experienced entrepreneurs, support organisations and so on \u2013 focus only on their own narrow interests. But if they connect and work together for the wider benefit of the ecosystem then everyone can gain from the successes.<\/p>\n Connecting with others is a vital part of building entrepreneurial ecosystems. Many of the features that underpin successful ecosystems are about building culture and relationships. This includes events, mentoring and networks that enable peer-to-peer learning and celebrate role models.<\/p>\n And it\u2019s not always about having a local focus. Some activities to support high-growth entrepreneurs benefit from being delivered at the national or regional level. For example, public sector venture capital funds (government money that\u2019s invested in start-ups that might struggle to source private investment) are more effective if delivered at scale. Ecosystems also need to develop links with other locations to tap into their knowledge, skills and resources.<\/p>\n As successful ecosystems are typically based around large cities, it is essential that they develop strong connections with the smaller communities around them to prevent inequalities emerging within regions.<\/p>\n Ultimately, building ecosystems requires government funding but not government management. For example, the Scottish government\u2019s Ecosystem Fund<\/a> provides financial support for grassroots initiatives that may otherwise struggle to get off the ground. <\/p>\n![\"a](\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2025\/10\/file-20250922-66-sd7zft.jpg\")
<\/a><\/p>\n
\n Rawpixel.com\/Shutterstock<\/a><\/p>\n