Former coal mining communities have lower levels of entrepreneurship

New research from the University of St Andrews, funded by the Economic and Social Research Council and with Oxford Brookes University and the University of Liverpool, has found that business start-up rates are significantly lower in former mining communities.   

In a paper published this month in the journal Entrepreneurship and Regional Development, the researchers found that locations which are previously associated with traditional large-scale industries such as coal mining, struggle to escape their industrial legacy of low levels of entrepreneurship despite generational change.  

Due to a form of inter-generational “imprinting”, the sons and daughters of miners continue to favour occupations which favour a traditional employment contract rather than seeking to become entrepreneurs.   

The researchers analysed data from the UK’s Start Up Loan Scheme, spanning 2012–2022 which is the largest single start-up support programme in the UK. The scheme has support more than 100,000 start-ups during this time period across the UK.  

Former coal mining communities are heavily spatially concentrated in certain mostly rural parts of the UK such as Yorkshire, Durham, South Wales and places like Fife and Ayrshire in Scotland.  

This spatial concentration means that mining areas are often seen as representing urban problems in rural settings, for example they are often associated with high levels of unemployment, low wage employment, poor health outcomes and high out-migration. 

Despite such a scheme being seen as a potential antidote to unemployment, start-up failure rates are proportionally higher by formerly unemployed entrepreneurs.    

Commenting on the study Professor Marc Cowling from Oxford Brookes University, said: “The findings show that there is the potential for younger entrepreneurs to help regenerate left behind communities where opportunities for meaningful employment are still scarce, but this requires supportive policy interventions.” 

The paper’s findings highlight that areas such as former mining communities seem unable to break out of a self-perpetuating cycle of long levels of entrepreneurship due to these important path dependencies despite major policy interventions such as the SUL start-up scheme.   

Co-author of the paper, Professor Ross Brown from the University of St Andrews Business School stated that “entrepreneurship is a highly context specific process and some communities are clearly less fertile breeding grounds to help nurture entrepreneurial activities than others”.