Scotland’s largest city has come a long way since its humble origins. Glasgow has gone from being a rural trading post to becoming one of Europe’s top financial centres, and the city has responded well to the challenges presented by globalisation, population growth, and the ever-increasing demand for competitiveness. As a result, Glasgow has become a particularly attractive destination for both established business owners and startups. As part of our ‘Top Cities for Business’ series, in this post we take a detailed look at the many reasons why Glasgow is a top choice for companies and entrepreneurs.

An overview of Glasgow’s economy
Over the past two decades, the local authorities in Glasgow have been focusing on diversifying the city’s economic base and on investing in modern infrastructure in order to attract businesses and further investment. This strategy has certainly paid off, since the Scottish city has been one of the few UK urban centres to be successful at weathering the economic storm brought about by the global crisis. Glasgow ranks 16th in terms of economic competitiveness within the UK (outside of London) and is very close to attaining the competitiveness levels of cities like Brussels and Copenhagen. It is estimated that the city’s companies produce an annual turnover of over £31 million, a figure that represents 12.7 per cent of Scotland’s total economic output.

In 2013, the city council leader for Glasgow affirmed that the city was already back to pre-recession levels in terms of private sector investment. To put it simply, the city has made all the right choices and has prioritised high-value industries in order to promote economic development and stability. Glasgow’s key industry sectors are detailed below.

Key industry sectors in Glasgow
The Glaswegian economy is dominated by the finance and business services sector. It is believed that this sector provides employment to over 50,000 people. Companies that operate in the finance sector have been attracted to the city due to its excellent infrastructure. For example, the International Financial Services District was specifically created in 2001 to this end. Currently, the city’s business district provides 2.75 million square feet of Grade A office floor space to national and international firms. To date, this project has helped secure over £1 billion in investment and has created nearly 16,000 jobs in the city. The IFSD is now home to leading financial companies like JP Morgan, ACCA, Clydesdale Bank, BNP Paribas, Barclays, and Morgan Stanley.

Retail is another booming economic sector in Glasgow. In fact, the city is considered the UK’s second retail centre, only surpassed by London’s West End. The retail sector employs 10 per cent of the city’s workforce. The tourist and hospitality industry experienced an important boost following the celebration of the Commonwealth Games in 2014. It is estimated that currently more than 30,000 people are employed in this sector. The growing economic impact of business tourism is also worth mentioning, as the local city council reported that this sector generated £1 billion in revenues between 2005 and 2013. Other important sectors include healthcare, business services, and science and technology.

Employment and Skills
Glasgow was traditionally known for having high unemployment levels, but in recent years the city has reversed this trend and now has an economically active population of over 380,000 people in employment, and 32 per cent of those have a university degree. In addition, the city’s universities have strong links with high-value industry sectors like information technology, finance, biotechnology, and the pharmaceutical sector.

Self-employment rates in Glasgow have been steadily growing over the past decade and are now set at 7.4 per cent. This is an important economic indicator, as it suggests that Glasgow is moving in the right direction in terms of supporting startups and business innovation.

The Scottish city is at the forefront of British entrepreneurship. According to a 2014 article published by StartUp Britain, Glasgow is one of the country’s top entrepreneurial hotspots. Last year, more than 8,000 new businesses were registered in the city, which ranks fifth in terms of startup rates behind London, Manchester, Birmingham, and Harrow.

Promoting business development in Glasgow: Government schemes

In order to support the current growth levels, the local government has launched a number of schemes that promote business development. Some of the most important schemes include:

- Startup grants for the value of £1,000
- Rent subsidies for newly established companies through the New Business Fund
- The West Scotland Loan Fund, which provides gap funding to qualifying companies
- The Digital Enterprise Glasgow project, which offers incubator space and rent-free desks at various locations
- Relocation funding for companies who want to move their premises to the IFSD

For all these reasons and more, Glasgow is one of the top cities for business in the UK.

Sources:

http://investglasgow.com/wp-content/uploads/2014/02/GEF-indiv-pgs-nav.pdf

http://www.zyen.com/images/GFCI_25March2013.pdf

http://www.ft.com/cms/s/0/63301bac-a50c-11e2-a94c-00144feabdc0.html#axzz3TXMWQAjs

http://www.ifsdglasgow.co.uk

http://www.bbc.co.uk/news/uk-scotland-scotland-business-15683570

http://www.startupbritain.co/news/2014-01-26/new-figures-reveal-regional-entrepreneurial-hotspots

http://www.glasgow.gov.uk/businesssupport