New research ranks best UK locations for AI businesses

20/06/2024

This research report offers an exploration of 59 of the United Kingdom’s leading towns and cities for fostering artificial intelligence (AI) enterprises. By analysing key metrics that contribute to a thriving AI ecosystem, this study identifies the most advantageous environments for AI business growth and sustainability.

The research reveals several key insights and notable results regarding the top cities for AI enterprises in the United Kingdom.

Cambridge emerges as the leading location for AI businesses, boasting the highest overall ranking. It demonstrates a strong balance across various metrics, including a substantial number of AI-related businesses (140) and a significant online search volume per person (0.1674). Additionally, Cambridge shows a promising business survival rate of 46.2%, indicating a supportive environment for long-term success.

Bristol ranks second, highlighted by an impressive online search volume per person (0.6703) and a solid count of AI-related businesses (101). Its business survival rate stands at 42.8%, reflecting a stable and encouraging atmosphere for AI enterprises.

Reading secures the third position with notable strengths in AI job vacancies per person (0.000113) and a considerable online search volume (0.3556). Despite a slightly lower business survival rate of 38.9%, Reading’s robust AI ecosystem supports its high ranking.

Graph: Online search volume for AI-related phrases

Other cities, such as Lincoln and Newcastle upon Tyne, show strong performances with high online search volumes and commendable business survival rates (43.8% and 41.4%, respectively). These locations, though smaller in terms of the number of AI businesses, provide fertile ground for AI innovation and growth.

Graph: AI-related job vacancies per person

London, while having the highest number of AI-related businesses (approx. 5000), ranks tenth overall due to its relatively lower AI job vacancies per person (0.000021) and a moderate business survival rate (39.2%). This highlights the competitive nature of the capital’s AI market, which, while abundant in opportunities, presents challenges in sustainability and job availability.

Graph: 5-year business survival rate (%)

Notably, Exeter and Tunbridge Wells stand out for their exceptional business survival rates (51.6% and 51.1%, respectively), indicating very supportive environments for sustaining AI businesses over the long term.

Graph: Number of AI businesses per person

The findings from this report highlight the diversity of strengths across various UK cities, offering valuable insights for stakeholders aiming to establish, invest in, or expand AI operations. These insights reveal not only the current hotspots for AI activity but also the emerging regions with potential for significant future growth.

Patterns and surprises

Analysis reveals several patterns and unexpected findings that offer deeper insights into the UK’s AI landscape.

Geographical distribution

A noticeable pattern is the geographical diversity of the top-ranked cities. While traditional tech hubs like Cambridge and London perform well, cities across different regions, such as Bristol in the South West and Newcastle upon Tyne in the North East, also show strong potential. This indicates that AI business opportunities are not confined to a single area but are spread throughout the UK.

High search volumes and business density

Cities like Bristol and Newcastle upon Tyne exhibit high online search volumes for AI-related phrases, suggesting strong local interest and engagement with AI technologies. This correlates with a substantial presence of AI businesses and job opportunities, reinforcing the importance of public interest in fostering an AI-friendly environment.

Business survival rates

Unexpectedly, smaller locations like Exeter and Tunbridge Wells report some of the highest business survival rates (51.6% and 51.1%, respectively). This contrasts with larger cities where the competitive environment might pose more challenges to business longevity. These findings suggest that smaller cities can offer supportive conditions for sustained business success, likely due to less saturated markets and potentially more personalised local support.

Job vacancy anomalies

Slough, despite being relatively lower in overall ranking, stands out with an exceptionally high AI job vacancy rate per person (0.001109). This anomaly suggests a high demand for AI professionals in the area, which could be attributed to the presence of specific AI-intensive industries or large organisations seeking specialised talent.

London’s mixed results

London, while having the highest number of AI-related businesses (5000), presents a lower than expected AI job vacancy rate per person (0.000021) and a moderate business survival rate (39.2%). This highlights the intense competition and saturation in the capital, making it a challenging environment for new AI ventures despite its vast opportunities.

Low job vacancy but high survival rates

Some places, such as Gloucester and Ipswich, demonstrate lower AI job vacancy rates but boast high business survival rates (47.8% and 43.4%, respectively). This suggests that while job openings may be fewer, the existing businesses are thriving, pointing to stable and supportive business environments.

Emerging cities

Locations like Lincoln and Chelmsford, although not traditionally recognised as tech hubs, are emerging as promising locations for AI businesses. Lincoln’s strong online search volume (0.3638) and Chelmsford’s solid business survival rate (44.8%) indicate growing interest and support for AI development in these areas.

These patterns and unexpected points highlight the dynamic and evolving nature of the AI business landscape in the UK. They underscore the importance of considering a range of factors when evaluating the best locations for AI enterprises, beyond just the traditional tech centres.

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