New firms thrive

Sep 10 2008 by Andrew Hebden, The Journal

IT’S not getting any easier to find silver linings to this economic crisis, but there’s perhaps a glimpse of one in today’s report from Barclays Bank which examines business start-ups in the UK.

Far from the gloomy sentiment distracting people from setting up firms, it suggests the picture in Newcastle has proved resilient in the past quarter. This contrasts with the UK trend, where there has been a decline in start-ups.

There could be several reasons for this apparently surprising pattern.

It could reflect the tendency for the North East to feel the cool winds of an economic downturn slightly later than other parts of the country. Figures for the next quarter will illustrate whether or not this is the case.

More encouragingly, it could be an indication of the robustness of the growing entrepreneurial spirit in the region. This has long been regarded as a weakness in the North East and many schemes have been devised in an effort to buck a trend often seen as a legacy of the days when thousands of workers were employed in the region’s traditional industries.

It will certainly be interesting to see what happens to those people sadly made redundant in the current downturn. Today we feature the story of Darren Atkinson, a joiner recently made redundant by a housing developer. He has decided to set up in business himself and has found a demand among householders who are choosing to refurbish their homes instead of moving.

There is anecdotal evidence that some of those made redundant by Northern Rock may choose a similar path.

Many of these people have deep roots in the North East and won’t be willing to up sticks. We know there are job opportunities in the region, but the prospect of being your own boss will no doubt prove tempting for many.

Only time will tell if the Northern Rock effect comes to mean the proliferation of small financial businesses in the North East which could become big employers.

Andrew Hebden is assistant editor (business) of The Journal