Lewisham tops UK Very Small Businesses table

Inspired by Boris' "nation of SMEs" speech at Tory party conference yesterday, The FT data blog has looked at the size of the UK micro business community - companies that employ between 0-4 people, which represent over three quarters of SMEs.

The FT analysis of ONS data shows Lewisham top of the VSB table

Using ONS statistics, they find that London has more of these businesses as a proportion of the area's total  number of businesses than any other region and that this borough has more very small businesses (VSBs) as a percentage of its total than any other part of the country. In Lewisham, VSBs represent 84.2% of the total.

It's hard to know what to make of these numbers, since they also confirm how low Lewisham's employment base is (with almost exactly half the total number of businesses located in Wandsworth). However, looking at this chart, it's probably fair to say it's better to be at the top of the scale than at the bottom, with stellar performers like Hull, Stoke and Dundee.

The other positive to draw from this is that developments like Martin's Yard (not far off completion now) are targeting the right type of tenant - if Brockley's going to attract more employers, it will be in the form of Very Small Businesses.

You can register for free with The FT to read the blog in full.

57 comments:

Sanjit Chudha said...

Interesting, I agree with you that it better to be at the top of the very small businesses league than the bottom. In a recession however, small businesses are also very vulnerable to debt arising from poor cashflow (late payers etc). Whilst there is much to celebrate (the community mindedness of so much of Lewisham arises in part from the high degree of localism and small businesses in the borough), a part of me also longs for the borough to start attracting larger scale employers. In light of cuts within the local NHS and the borough I don't see a very bright picture for 2013. Sorry to be be so glum. I for one will do what I can to shop locally (at Brockley and Lewisham markets for example).

Anonymous said...

Err, to the defence of Hull, Stoke and Dundee (your incorrect victims here). If you want a job it's best to be at the bottom. That means more jobs!

They have a lot less VSBs, i.e. they have more larger business, which means more jobs. For the best job situation you would want to be in the bottom right (i.e. most companies and a high % of them being big).

Kind of goes against your argument.

THNick said...

Don't "VSBs" just mean "small shops" and tradesmen? Reflecting that lewisham doesn't really do large scale businesses in any way but provides services to residents who travel elsewhere for work. This is a situation which can only occur in a suburb rather than in a urban area as a whole.

Anonymous said...

Small businesses yes
Ripoff small businesses no

You know what I'm saying.

Brockley Nick said...

@Anon - have you seen the unemployment rates in Hull, Stoke and Dundee?

I'm saying there is a suggested correlation between a high proportion of small businesses and a successful economy: lots of small businesses = dynamic entrepreneurial local economy, creating new jobs. Relatively few small businesses = reliant on legacy industries, which tend not to create new jobs.

Brockley Nick said...

@THNick - The FT blog says the top six sectors with the highest proportion of VSBs are:

1. Agriculture, forestry and fishing
2. IT and communications
3. Professional, scientific and technical
4. Construction
5. Property
6. Business admin and support services

So no, VSBs don't equal shops and tradesmen. I think we can probably discount agriculture as being a major local employer, but Lewisham probably has a reasonable spread of the others.

mb said...

Remember that many 'professional' consultants and non permanent staff set themselves up as ltd companies, does it include them? I could throw my TfL issue HobNob in this office and take out the eye of several who organise themselves in that way. I won't as dont have any, its a metaphorical biscuit.

Brockley Nick said...

Sure, and the blog points that out. Such consultants exist in every sector though.

Brockley Nick said...

BTW - nowhere do I say that we oughtn't want more larger companies and I do say that we shouldn't read too much in to this.

Just pointing out that, given we know Lewisham has traditionally struggled to attract employers, this is reasonably encouraging - and that - you have a better chance of finding work in Barnet or Wandsworth than Hull or Stoke.

It suggests Martin's Yard has decent long-term prospects, which is good for Brockley.

Anonymous said...

Personally I don't think real Brockley will be realised until we have something like a Starbucks or a KFC on the high st.

Anonymous said...

The question is how many of these small businesses are business that can provide a long term job or career path for people in the community? If it’s because Lewisham has more Texan chicken shops than any other area, then the numbers aren't really relevant.

Lou Baker said...

What these figures mean is Lewisham has fewer big businesses - ie) the important ones - than the rest of London.

And we have the fewest because we probably have some of the worst transport links - particularly amongst more central boroughs. Why set up in Lewisham when you could set up in Southwark. Ealing or Haringey - which are at least all on the Tube.

Lube said...

Haringey 82.9% lewisham 84.2% they occupy the same part of the scatter chart which rather undermines your own argument.

Anonymous said...

12:19 - Chicken restaurants are - surprise surprise - also businesses that people can build their careers on - both from an entrepreneurial ownership point of view but also a point of sale, customer experience standpoint.

Not everyone is lucky enough to join a nice office job with friends of the family for their first employment after their "gap yah".

michael said...

The FT Blog makes the point:
"In employment terms, therefore, big firms are still where it’s at"

So while Martin's Yard is a decent development, will bring in small start-ups, and probably maximise employment per square foot, it will not develop large businesses based in Lewisham. Successful businesses will need to move out of borough.

One problem of drawing any conclusion from these statistics is that large organisations do not only employ people in their registered HQ address, what would be beneficial is more large companies coming into Lewisham to create employment opportunities in the local area beyond retail, local government, health and education industries.

Anonymous said...

@Anon 12.59: Chip on your shoulder?

I got my nice office job out of Uni by working hard and interviewing for it. No "friends of the family" to get me on the job ladder thank you very much.

Anonymous said...

First job of your life was it? Very tough, was it?

urbansurgery said...

Given that the vertical axis is a ratio you could equally read this as Lewisham being at the bottom of the larger than 4 person business.

Careful how you spin that one. A failure to attract large scale employment is hardly an ringing endorsment.

Brockley Nick said...

Agreed, I think the original article makes exactly that point.

AAA said...

There is a lot of big stuff that Lewisham simply doesn't have: offices (not many about), large scale retail (no shiny new malls with big anchor stores), manufacturing (not much in the way of factories)...

Perhaps this is compounded by a bigger than usual proportion of small independant retailers rather than small branches of national chains... Don't know if thats because boots doesnt want to be on a smallish high street next to a betting shop or because independant coffee shops rule the brockley streets.

Basically we are Dominics rather than Dominos...

Anonymous said...

Anon at 13:33. Stop being a twerp. Because your first job wasn't 12hrs a day peeling spuds any comparison is easy? I could easily say that 8hrs in a top shop where it's dull and you don't really engage brain is far easier that 4hrs a day, plus course work, plus debts, plus no guarantee of passing a physics degree. I wouldn't because its a scenario created to illustrate a weak point. Very few grads get anywhere because of contacts. Most who take a year off pay for it themselves or borrow the money. So do 18yr old plumbers and builders. I know because I did it, you'll also find tradesmen in the uk from Australia doing the same. Why do you think there are so many uk bar staff in Sydney?

As stated, it's a chip on your shoulder.

Anonymous said...

How many coffee shops do we have? I'm sure a landlord would prefer the steady and higher income from a high street chain. Nice try in blaming courageous small traders for blighting the high street.

Anonymous said...

Anon 14:47 - http://www.youtube.com/watch?v=eKFjWR7X5dU

Anonymous said...

It makes me wonder where all these small business live.

Lewisham hardly seems a hive of enterprise. The politics of this borough are not business friendly (unless they are big corporations with legal departments.) The big employers around here are the public services like the NHS and run of the mill retail.

I would hazard a guess, that if they are going by registered address, it may be that a lot of City workers (of which, there are great many) have locally registered little service companies for their job hopping.

Registered addresses are not their place of work.

Bit of a daft, rather meaningless table. Some sort of marketing thing?

Brockley Nick said...

Where do the small businesses live?

In clusters in places like Deptford, New Cross, Blackheath, Forest Hill and even Brockley.

There are loads of small businesses based in the areas - some at home, some squeezed in to mews buildings and some occupying places like the Brockley business centre.

Why locate here?

Low prices. Good access to talent from Goldsmiths, Lewisham College et al. Good transport links to London Bridge and Shoreditch.

But I guess, for most small business people based here, the reason they're here is because they live here.

Anonymous said...

There is not exactly an abundance of available office space and business premises to rent in Lewisham.

Developers seem rather keener on turning everywhere into flats than offices.

Lewisham would not be the first place on the list to set up a business.

I guess they just did an analysis of a registered addresses. Big difference between that and a place of work.

Brockley Nick said...

"There is not exactly an abundance of available office space and business premises to rent in Lewisham."

Agreed. That's why the Martin's Yard development is so important / interesting. If the space is filled quickly it will prove the demand is there and give the Council more courage to insist that developers provide more work space in future.

Tim Lund said...
This comment has been removed by the author.
Tim Lund said...

How many are companies with just one employee - many of which will be service companies set up for the purposes of reducing National Insurance

whealie said...

There may be other reasons for the figures, such as relatively cheap housing in the borough attracting individuals earning little from their very small businesses.

Lewisham has an unusually high concentration of media types - the new National Union of Journalists' branch has more than 500 members, for example. There are lots of actors and musicians too.

Many of these are freelances, self-employed or micro-businesses.

While many of us have chosen to run our own businesses, others have been forced to go freelance because the nature of the industry sectors in which we work and the lack of secure employment.

Most graduates coming out of Goldsmiths are probably starting out as freelances because full-time jobs are scarce.

The result of oversupply has allowed most national newspapers, for example, to cut their freelance rates and even negotiate cuts from long-serving and well-known columnists.

It's not necessarily a success story.

Anonymous said...

What makes you think Martins Yard will be suitable for all small businesses?

It depends very much on the rents and the terms.

Will it will allow people to rent a desk or an office at modest cost for a startup?

Martins Yard:

4 blocks of three and four storeys incorporating balconies, comprising 20 commercial units (3,000 square metres floorspace for Use Class B1) at ground and first floor and 12 one bedroom, 32 two bedroom, 2 three bedroom and 2 four bedroom self contained residential units at second and third floor

20 commercial units is not a lot and...48 residential units.

So rather more flats than businesses.

Does Lewisham actually have a policy regarding small business development?

kolp said...

Exploit or be exploited. Is the fundamental choice you get in our society.

Brockley Nick said...

@Whealie - yes, all good points.

Tamsin said...

Lewisham not only fails to attract decent sized employers but fails to keep those they have, being content to be a dormitary for the City and not do much about providing local work of the blue collar and labouring variety. Why else did they opt to build more than the quota of housing required by John Prescott?

The Council is the biggest local employer followed, I believe by the NHS - and that is even with all the contracting out.

There used to be a reasonable amount of food manufacturing and lgiht industry. Pearce Signs on the New Cross Road were probably the last to go (anyone remember the little neon man running up and down his neon ladder?), but there have also be significant bottling works, Peak Freans biscuits (although that might have been just over the border in Southwark), even some brewing, and, a long time ago now, Enos Fruit Salts and an iron works making railway engines (one of which is still running in Snowdonia).

Brockley Nick said...

@Tamsin - one of the reasons why there is not more "blue collar" (not sure this is a useful descriptor any more) employment in the borough is that local spending power is relatively weak, compared to other parts of London (low density, poor borough)

More residential development means more spending power means more local jobs in retail, leisure and support services - a lot of which is "blue collar" work.

'O' level Marxism said...

@kolp, or choose to work for one employer over another depending on the pay, interest in the work, hours, pension, commute. Many people do actually have some choice. In the same way many employers have to pay more than they would prefer for labour. It's not as bleak or simple as you portray.

Brockley Nick said...

PS - it is obviously true that Lewisham has few big employers, but this line:

"The Council is the biggest local employer followed, I believe by the NHS"

Gets trotted out a lot. Councils are almost always the biggest employers in every part of the country. In Derby, where Rolls-Royce, one of our biggest employers (and a client) is based, the Council is still the biggest employer. That's because Councils are very big employers. So too is the NHS, particularly when you have a teaching hospital in your borough.

So it's a meaningless line. We are never (in the next couple of decades) going to get 1000+ employers in the borough. The aim should be to attract one or two 200+ employers and lots of good small businesses.

kolp said...

It's not as bleak or simple as you portray.

When we speak in fundamental terms, it is.

Tamsin said...

Yes, I agree with you. But it really bugged me when Sir Steve and Lewisham rushed in promising to build 50% more housing than they were required to do so and specifically did not care that they were losing significant light industry. So yes, bring on more developments like Masons Yard, and workshops and garages employing three or four people each, and a small industrial estate closer than Surrey Canal Road. (Does the Thurston Industrial Estate still exist - still half there on street view but not clear whether it was in the process of being demolished.)

Agree local residents spend some money locally so more housing is better than derelict land. But more workers would also spend money and there is a dearth of that lunch-time spend by people who have pay packets to spend with rather than just benefits or pensions. Think how 465 or whatever they were who took over from Come the Revolution were depending on lunch-time trade which just wasn't there and folded within months. I know there were a lot of other factors in that case but workers who only sleep in the borough do not make for a truly balanced local economy. We would not be losing so many local pubs if there were local workers having a drink after work and before going home. Most of the City workers surely drink in the wine-bars in the city with their colleagues before going their separate ways.

'O' Level Marxist said...

So don't speak in "fundamental terms" speak in terms of the messy reality most of us occupy. The working class plumber may occupy a far more powerful position than the waged professional in the city. The works isn't a simple exploiter/exploited split.

Mb said...

tamsin, The London particular survives, Panda Panda survives. both on the same stretch of road. Perhaps they did because they know what they are doing?

kolp said...

That's the neo-liberal mealy mouthedness I was talking about.

'O' level Marxist. said...

Sorry, I'm not as smart as you. Please explain your position rather than assuming everyone is incapable of understanding your argument. You're just chucking out slogans along with your toys. More clarity less dogma please. Your move.

kolp said...

I play chess not checkers.

kolp said...

Actually Brockley Ben or whoever it is that is hiding under the dupe account, delete my comments. Because this is a useful topic and I don't want is focussed on some p*ssing contest.

Anonymous said...

In the middle of Lewisham there's a high rise office block that is empty, only to be used in an emergency.

I believe transport figures show 60% of the residents who work do so outside of the Borough.

Other than the public sector council, NHS, schools and police are there any large scale employers in Lewisham?

Tamsin said...

@ Mb. I know. There were lots of factors in the failure of 465, but part of it (from the conversations on this blog) was their thinking they could just be open at lunch-time and did not need to cater for the commuting workers at either end of the day. They might have been able to do so if the level of industry was what it was in the area 40 years ago - but they couldn't now.

@the last Anon. No. And there won't be again - not like when there was the Mazawattee tea factory by the Surrey Canal (which did everything from processing the tea to making its own caddies and promotional goods) and the extensive railway repair and cleaning sheds where Sainsbury's now stands - with a brewery, porcelain manufacturer and chemical works thrown in.

But the council should do a lot more towards encouraging medium scale employment - as Nick says, one or two 200+ employers and lots of good small businesses. The offer of help to young unemployed to start market trading is almost derisory in this context.

Anonymous said...

Does drug dealing count as small business?

Anonymous said...

It did until the busybody raids of Upper Brockley Road and its environs :-(

Never forget... kick racism and lack of understanding over drugs OUT of Brockley

Anonymous said...

I guess Lewisham, like many inner London boroughs, is dominated by The City and Canary Wharf. That is where the big companies are located in the Financial sector that makes up about 25% of the London economy. There are probably 500k people commuting from other boroughs to work in these locations. Along with the West End, much of London transport infrastructure is designed to deliver the workers to their desks and get them home in the evening.

Lewisham therefore could be described as a dormitory borough. Work and Play and much of the Shopping are located in central London. Local shopping consists of large supermarkets and a handful of mediocre shopping centres and street markets.

There is no appreciable night time economy. Central Lewisham has only one or two pubs, it is not a place for entertainment. The only area where there is some entertainment is in a short stretch of New Cross Rd, that caters mainly for the local student population in the Goldsmiths student residences.

Is there any evidence to suggest that this situation will change?

We hear of plans from time to time to turn Deptford into the new Shoreditch. Though there is little evidence of much improvement. It seems quite dead.

Unless the big office buildings in the city start closing down and the businesses decentralising, I do not see this changing.

Moreover, I don't think it enters into the councils vision either. There is a lot of inertia. Business development and diversifying the economy do not seem to be high on the list of priorities.

This very small business table gives a very misleading impression. Lewisham is not a fertile incubator of small businesses.

Anonymous said...

Housing estates have swept away the old industrial buildings in Lewisham (and Brockley). Brockley Cross had the tea works and Dring and Fage who made precision measuring instruments. Up the road was (?) Acme designs where film props and sets were built. Lewisham had Broomfields the industrial bakery, Siemens making missile guidance systems, and the Penn engine works. And then there was the European HQ of Citibank, why didn't the council try to keep them in Lewisham?

Brockley Nick said...

Re: Citibank HQ (full disclosure: I recently did a small bit of work for Citi and they are an Edelman client). Looking at the Canary Wharf cluster and Citi's place within it, do you honestly think there is any way Lewisham could have held on to them?

Mb said...

You assume that those business were open to persuasion? I used to work for Alcatel-Lucent in Greenwich, still there but they have moved much of their R&D and sold off part of the site. That was a decision made in Paris for their own strategic reasons, little Greenwich could have done.

Mb said...

Wot he said....

Anonymous said...

Are there any medium sized employers in Lewisham?

When the regeneration board existed back in the noughties a waller from CitiBank was on the board.

I never saw an empty office block mentioned as part of the plans.

I guess CitiBank are still paying full buisness rate for the empty shell?

Why exactly are financial services clustered at Canary Wharf, computer terminals could be located anywhere.

Other industries such as 'Fleet Street' have gone their own ways.

Brockley Nick said...

"Why exactly are financial services clustered at Canary Wharf, computer terminals could be located anywhere."

Planning permission to build large new towers with huge floorplates for trading floors and more space between floors for the enormous amount of wiring and IT infrastructure that goes in to these buildings.

Space to build not just one, but many such buildings, so that you can attract an ecosystem of support services, hotels and leisure to attract businesses and employees.

The Jubilee Line extension and good A Road links. Because you need to be able to take all these people in and out of the area on a daily basis.

Clusters are really important to businesses. You could build no such business cluster in Central Lewisham.

Brockley Ben said...

@kolp I love that you think I'd hide behind anonymity to have a pop at your words of wisdom. Did it not occur to you that other people might not agree with and/or understand you?

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