Top 50: Hi-tech firms are leading the way

GEOGRAPHICAL ANALYSIS

FURTHER EVIDENCE of London and the South-east's domination of the UK economy is revealed by a geographical analysis of the latest Independent on Sunday listing of fastest-growing private companies.

The league table, compiled in association with KITE, the forum where chief executives of growing companies meet to share their business experiences, shows that the region accounted for 22 of the 50 listed companies, among them the London-based Carphone Warehouse, which has appeared in several previous listings. Add in the seven from the South and South-west and the bias becomes even more apparent.

But it is not all bad news for the regions. The West Midlands shows signs of shrugging off its traditional industry past by supplying seven companies to the listing, including - in fourth position - last year's top-ranked company, the direct mail computer supplier the Software Warehouse. Among the other companies from the region associated with "metal-bashing" and other dying industries are the recruitment business Extra Personnel and the Caudwell Group, an international mobile phones business that has featured in the upper reaches of past listings.

The East Midlands did not do so well, but its three entries include last year's second-placed company, Prime Time Recruitment, which saw its annual growth rate more than halve, but which is still a significant business, with a turnover of nearly pounds 27m.

In common with past years, neither the north of England nor Wales accounts for many of the companies in this year's listing. However, the north has provided the third-ranked business, Rotrax Engineering Services, which according to its founders has succeeded by applying a service mentality to the engineering work that it carries out.

Scotland, meanwhile, though also traditionally an underperformer in this respect, has this time supplied the top company. By any standards, the growth of Glasgow's DX Communications has been phenomenal, with its 164 per cent annual growth rate comfortably exceeding the 132 per cent recorded last year by Software Warehouse.

Moreover, the Scots managed to cover both their traditional industry - in the shape of Fresh Catch - and the modem, through the computer company KSCL as well as DX.

SECTORAL ANALYSIS

THE UK'S steady shift from a manufacturing to a service economy is well and truly demonstrated by the Independent on Sunday's latest survey of the country's fastest-growing private companies.

As might have been expected, telecommunications, computers and recruitment are well to the fore, together accounting for nearly 20 out of the total. In fact, those sectors can increasingly be seen to be working together, since telecommunications and IT are becoming more and more closely integrated, while much of the growth in the recruitment market is caused by the shortage of appropriately skilled people in those two fields.

As Bill Bottriell, joint chief executive of second-placed Computer Futures, says, the fundamental changes in IT in recent years mean that it is permeating all walks of life. Moreover, with the rapid expansion of the Internet and the imminent arrival of products and services dependent upon it, that demand is likely to increase rather than diminish.

Again unsurprisingly, there are two pharmaceuticals companies in the listing. Pharmaceuticals - and in particular those based on biotechnology - is one area that has attracted a huge amount of interest and more than a little venture capital funding lately. This is partly a side-effect of Britain's strong position at the top end of the sector thanks to Glaxo Wellcome, SmithKline Beecham and AstraZeneca, but it is also connected with the strength of parts of the UK scientific community and the readiness of certain academic institutions to encourage research staff to commercially exploit their findings by establishing their own companies.

However, the Independent on Sunday's annual survey of fast-growing businesses has never been just about high-tech. Plenty of entrepreneurs find niches in the least likely of places and profit handsomely from them. For example, Card Protection Plan is - as its name suggests - an insurance service that provides cover in cases of the loss of credit or charge cards.

Or else they just find a way of doing it better than the established players. Consequently, Charlton House is one of several catering companies to have made the listing over the years. Equally, at a time when the top end of the brewing business, appears to be consolidating with increasing speed, there seems to be room for a smaller concern like George Gale & Co to grow at what is a perfectly respectable rate of 10 per cent.

Moreover, there is no more obvious a service industry than retail. And again, though sections of the high street have been hurting of late, there is still room for young upstarts to have a period of rapidly expanding sales, as northern-based Sportasia and London's Faith Shoes have demonstrated.

One of the reasons perhaps for the struggles at certain household-name stores has been the growth in popularity of mail order. And one of the increasingly important players in the clothing sector has been Boden, a catalogue company founded in the early Nineties by Johnnie Boden with the aim of supplying well-made basic garments for all the family at reasonable prices. After a difficult start, it has now struck such a chord that it often has trouble keeping up with demand.

And, increasingly sophisticated as the business environment has become, there is room this year - as in the past - for more traditional industries, such as engineering and vehicle manufacture as well as transport and haulage. This year's third-ranked company is an engineering business from the North- east.