Tower Hamlets is in the top three local authority areas with the best potential for economic growth, a new study reveals.
The research, compiled by business consultancy firm Winning Pitch, charts the national proportion of high growth industries in each area.
The borough outranked the remaining East London Lines boroughs in the London local authority areas significantly, with Hackney the next best placed at eighth, Croydon fourteenth, and Lewisham in the bottom three (31st).
“Local businesses are quite creative and diverse, and have established unique selling positions,” a council spokesperson said. “This has enabled them to ride out economic challenges better than other areas, positioning them for strong growth in the future.”
Joanna Smolka, marketing executive for Investis, an online communications company now based in Tower Hamlets agreed with the council’s opinion. “It’s next to the City which brings business,” she said. “For retailers, Tower Hamlets is perfect. It’s a unique area with niche markets [for traders]” and “a trendy, arty area for people to be themselves.”
The study used a unique approach for recognising “high growth” small businesses called the High Growth Company Quotient. Besides accounting for the number of small and medium-sized enterprises in an area, the HiQ indicates the relative proportion of “gazelles” – businesses that have more than ten employees and had a turnover of £1 million within their first three years.
Tower Hamlets has a thriving retail community, with areas like Spitalfields Market and Brick Lane exemplifying the successful enterprises implicated in the research.
The Whitechapel Gallery, the long-standing art institution, is one of the most successful enterprises in the borough, and continues to grow even during the recession.
“The belief is that, east London has 180 galleries and thousands of artists, which contribute to a creative economy” says Rachel Mapplebeck, head of communication for the Whitechapel Gallery. “The diverse mix is driving the regeneration of the area.”
“It’s amazing what Whitechapel has done since our reopening in April, after the £13 million renovation. We aim to put half a million people through the doors this year, and we’re on about 300,000 at the moment, which is twice as much as last year.”
She added: “It’s been really successful for the gallery, and for the prosperity and growth of the surrounding area.”
The success of Tower Hamlets and Hackney in this research is particularly significant as they are two of the most deprived boroughs in the capital. Yet in this study they have come above boroughs more often associated with economic prosperity such as Kensington & Chelsea, Richmond upon Thames and Harrow.
Mahmoud Rauf, chair of Brick Lane Business Association, however, feels that the borough has been misrepresented. “Unfortunately, I beg to differ with the ‘findings’”, he said. “When I see our members struggling to survive, closing the business or shop in the prime location, I am unable to say businesses in Tower Hamlets are thriving in this recession.”
Mr Rauf suggests that the research focused on too small an area of the borough. “I would like to know which area of the borough the report is referring to. I do not have any evidence to say that any retail business is thriving.
“It seems to me that this report is too positive,” he concluded. “We should not over simplify the difficult period people are going through.”