FAST GROWTH FIRMS LEVERAGE INNER CITY ADVANTAGE

STRATEGIC LOCATION AND UNTAPPED MARKET POTENTIAL IN UK'S INNER CITIES PROVING HIGHLY PROFITABLE FOR UK'S LEADING ENTREPRENEURS

New research released today, Tuesday 2nd December 2003, reveals how an emerging group of 'elite' firms in the UK's poorest areas have realised the competitive advantages of their inner city locations to become some of the fastest growing and most profitable firms in the UK.

The report of the third annual Inner City 100 Index, a listing of the top 100 firms located in the UK's most deprived wards, Competing for Change, highlights leading entrepreneurs' innovative growth strategies and their success in competing nationally and internationally.

Inner City 100, dubbed the 'Enterprise Oscars' by Chancellor of the Exchequer Gordon Brown, is a nef project supported by The Royal Bank of Scotland and NatWest. Inner City 100 is the only index of fast growing businesses in Britain's most deprived inner city areas and marks a turning point in understanding the economic potential of the UK's disadvantaged urban areas.

The firms that make up the 2003 Index are highly diverse, across a broad range of sectors, and challenge negative perceptions of businesses based in deprived inner city areas. They are highly involved in their local areas and most use local suppliers and recruit a local workforce, in whom they invest well beyond the standard for small and medium enterprises. The majority cite their close involvement with their local communities as a major competitive advantage, giving them access to local knowledge and building staff commitment and beneficial business relationships.

With record five-year growth rates and strong profitability, this year's Inner City 100 have built their success on excellent customer service, and strong business relationships. The majority have long-term public sector and major private sector customers.

Firms in the Inner City 100 2003 are bedrocks of innovation and entrepreneurship for the UK. They have adopted sound growth strategies including strategic partnerships, mergers and product diversification, to develop highly successful products and services. Ensuring that this entrepreneurial activity continues is central to developing the UK's knowledge economy.

'Competing for Change' recognises the Government's considerable progress in supporting inner cities (with over 60 per cent of firms reporting improvements), but weaknesses remain in the design, timeliness and quality of business support available.

Further, although 35 per cent of firms were co-founded or founded by women, more needs to be done to ensure that women have access to established financial networks to grow their firms. The report also finds that access to growth finance is a recurrent issue across the Index, with the majority of these important urban economic engines funding their growth from their own profits and bank facilities rather than using growth funding options.

97 per cent of Inner City 100 firms are optimistic about their business prospects over the next five years. This is not naïve but reflects their record of successfully competing from their inner city base. The Index businesses dispel the myth of inner city firms from a stereotyped set of sectors lurching from crisis to crisis on the brink of financial disaster. Inner City 100 firms are capitalising on market opportunities in their communities to compete at the national and international levels.

The Chancellor of the Exchequer, the Rt. Honourable Gordon Brown said: "Inner City 100 is helping to create a more dynamic, innovative and enterprising Britain. For far too long, the image of enterprise in this country has been of a closed circle with millions left out 

"But I believe that there should be no no-go areas for enterprise culture, and that the British economy will do best when men and women from the nation's high, as well as low, unemployment communities - and from all social backgrounds - have confidence that they can transform their ideas and hopes into business start ups and growing firms, building an enterprise culture genuinely open to all."
 
Sarah Forster, Director of the Enterprising Communities programme at nef said: "Competing with the best, the Inner City 100 are well-managed, innovative companies that compare favourably not only with their inner city peers but the best companies in the country."

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	Publications Inner City 100 report - Competing for Change