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Industry and business

The information on this page was compiled before the coronavirus (COVID-19) pandemic, which has had a significant impact on many aspects of daily life.  Data and intelligence are emerging all the time about the effects of the virus and the measures taken to control its spread.  Accordingly, we will update this page as relevant information becomes available.

The most detailed counts of business come from the 'UK business counts' data set, which is based on an extract compiled from the Inter Departmental Business Register (IDBR).  Businesses are either counted at an enterprise or local unit level:

  • An enterprise can be thought of as the overall business, made up of all the individual sites or workplaces. It is defined as the smallest combination of legal units (generally based on VAT and/or PAYE records) that has a certain degree of autonomy within an enterprise group.
  • A local unit is an individual site (for example a factory or shop) associated with an enterprise. It can also be referred to as a workplace. Most businesses will only be counted once as an enterprise and once as a local unit i.e. they operate from a single site.

According to the latest published data:

  • In 2018 there were 10,130 enterprises in Herefordshire.  Similarly to nationally, the majority (90%) of these were ‘micro’ enterprises employing 9 or fewer employees whilst 9% were ‘small’ (employing 10 to 49 people), and 1.4% were ‘medium’ size enterprises employing 50 to 249 employees. Enterprises classified as ‘large’ (employing 250 employees or more) accounted for a very small percentage (0.1%).
  • In 2018, there were 11,460 local units; 1,325 more local units than enterprises. Again, similarly to the regional and national picture, 86% of local units were categorised as ‘micro’ (employing 9 or less people), the majority (73%) of which had less than five employees.

Business enterprises by industry and legal status

  • ‘Agriculture, forestry and fishing’ was the largest industry with 2,415 businesses; 24% of total businesses in Herefordshire, followed by ‘construction’ and ‘professional, technical activities’ (11% each). These industries were largely made up of ‘micro’ businesses, where fewer than ten people were employed (Figure 1).
  • ‘Agriculture, forestry & fishing’, ‘business administration & support services’, ‘manufacturing’ and ‘education’ were the only industries to have large any businesses employing 250 or more people, whilst medium sized businesses (50-249 employees) were predominantly in ‘education’ and ‘manufacturing'.
  • The industries that represented the least number of businesses in Herefordshire were ‘mining, quarrying and utilities’, ‘financial and insurance’ and ‘public administration and defence’ (together accounting for only 3% of all businesses).

Figure 1: Proportion of businesses (enterprises) in Herefordshire by employment size band and industry 2018

Proportion of businesses (enterprises) in Herefordshire by employment size band and industry 2018

Source: Office for National Statistics

  • As might be expected, a higher proportion of public sector organisations were classed as 'medium' or 'large' than within the private sector (see figure 2 below). 
  • The vast majority (92%) of enterprises in Herefordshire had an annual turnover of less than £1 million, with just 2% having a turnover of more than £5 million.
  • Of those enterprises with an annual turnover of £5 million or over, 44% were in the ‘agriculture, forestry and fishing’ or ‘manufacturing’ sectors.

Figure 2: Proportion of businesses (local units) in Herefordshire by employment size band and legal status 2018

Chart showing the proportion of businesses (local units) in Herefordshire by employment size band and legal status in 2018. categorised into micro, small, medium-sized and large.

Source: Office for National Statistics

Births, deaths and active businesses 2007-2017

The following information looks at the formation (birth) and closure (death) of businesses as well as the survival rate. These statistics are based on the registration of businesses on the VAT (Value Added Tax) and PAYE (Pay As You Earn) tax schemes.

Key points:

  • The new business registration rate [1] in Herefordshire is lower than that of west Midlands but higher than England as a whole. During 2017 there were a total of 760 business births in Herefordshire and 765 deaths, and the active business population was 8,480 (figure 3).
  • Across West Midlands and England there were more business start-ups recorded than business closures.
  • The turnover of businesses (the rate of births and deaths) in Herefordshire is generally lower than across England (figure 3).

Figure 3: Rate of births and deaths as a proportion of active businesses between 2007 and 2017 in Herefordshire and England.

Chart showing rate of business births and deaths as a proportion of active businesses in 2004 to 2015 across Herefordshire and England.

Source: Office for National Statistics 

  • In 2017, the rate of business births per 10,000 population aged 16+ in Herefordshire was 47.1, lower than that of West Midlands region (65.2) and England as a whole (75.4).
  • Survival rates among the Herefordshire business population are generally greater than nationally for businesses that have been active for 3 years or more.  

Businesses locally and nationally are at most risk of closure when they are between 2 and 3 years old.

The knowledge economy

The knowledge economy may be described as the part of the economy where organisations generate wealth by utilising a knowledge specialism in their workforce. This may include the knowledge to use a certain technology.  There is no single way of defining what the ‘knowledge economy’ is, rather a number of separate definitions i.e. particular types of businesses or occupations associated with higher knowledge requirements and levels of skills.  Unless otherwise stated we have used the Eurostat definition of knowledge intensive services based on Standard Industrial Classification (SIC) 2007 codes.[2]  Manufacturing is not included within this definition as there are a separate set of definitions for high-technology manufacturing. Defining knowledge intensive activities using standard industrial classification codes has its limitations. Primarily because a business and its employees are all classified by a single code according to the main activity at the site in question. This means a whole business is classified as knowledge intensive even if it only part of the business or a fraction of employees who are actually engaged in ‘knowledge intensive’ activity.

Knowledge business within the county

In Herefordshire in 2015, there were approximately 3,000 businesses that were classed as providing knowledge intensive services, about 26 per cent of all business units in Herefordshire. This is lower than for England (39%) but similar to the West Midlands region (34%).

People working within knowledge intensive (KI) industries

In 2015, there were 27,700 employee jobs in knowledge intensive industries in Herefordshire, approximately 37% of all workplace employment in the county.  This proportion is lower than the West Midlands region (43%), The Marches Local Enterprise Zone (41%) and across England as a whole (49%). Within the knowledge intensive services sector the ‘other’ category made up the vast majority within Herefordshire (28% of total employment) followed by ‘market services’ (6%), ‘hi-tech’ (2%) and ‘financial’ (1%). This is similar to the distribution elsewhere, although ‘market services’, financial’ and ‘hi-tech’ all accounted for more employment nationally than in Herefordshire. Looking in more detail at the ‘other’ knowledge intensive services, the vast majority is made up of public service activities (public administration and defence; education; human health; residential care; and social work activities without accommodation). In fact 75% of all employment in knowledge intensive employment was in these sectors (more than across England (58%) or the West Midlands (64%)).

[1] The rate of business registrations per 10,000 resident population aged 16 and above

[2] Hi-tech KI services: 59, 60, 61, 62, 63, 72    KI financial services: 64, 65, 66    KI market services: 50, 51, 69, 70, 71, 73, 74, 78, 80    Other KI services: 58, 75, 84, 85, 86, 87, 88, 90, 91, 92, 93