Research shows number of new businesses in UK up by 78% since 2010
- Islington tops list of cities and boroughs with best conditions for entrepreneurs
- Edinburgh is second, thanks to government support
- University towns Bristol and Brighton, Manchester, Birmingham and Leeds strong for start-ups
6 December 2017 According to new research commissioned by wealth manager Kleinwort Hambros, entrepreneurs are forming an increasingly vital part of the UK economy with the number of new businesses rising by 78% per cent to almost 420,000 in just six years.
The research, carried out on behalf of Kleinwort Hambros by the Centre for Economics and Business Research (Cebr), reveals that the number of new businesses has substantially increased in the UK and that the survival rate, the number of businesses still in operation after one year, has also improved. Indeed, in 2011, around 87% of businesses founded in the UK in 2010 were still in operation. This figure improved significantly in the years to 2015, when more than 92% of businesses founded a year earlier had survived. The research also shows that start-ups in professional, scientific and technical businesses are most likely to survive. Almost 95% of businesses founded in these industries in 2014 were still in operation in 2015.
Paul Bentley, head of entrepreneurs at Kleinwort Hambros, has seen a 30 per cent increase in the number of successful entrepreneurs joining the wealth manager in the last five years. He said: “Entrepreneurs are the primary drivers of innovation across the UK, bringing new technologies and business models to the consumer. Although many start-ups fall by the wayside, a substantial number of businesses are surviving and helping to enrich the corporate landscape in the UK, especially after 2012. We believe this is because the financial crisis has given way to a more benign macroeconomic climate and an increase in consumer spending and business investment. We also saw interest rates cut to record lows which has decreased the cost of borrow helping to boost credit lines for the private sector.”
He adds that the rise in entrepreneurial activity is also a result of larger organisations facing challenges from new technology. The same organisations are less likely to be able to lay career paths in front of graduates, or lock staff into pension schemes which has given way to a larger pool of skilled labour available to work for fledgling business. The cost of computer equipment has also reduced, making it less expensive to start a business from scratch.
The research also shows the London boroughs and cities in the UK where entrepreneurs are most likely to succeed. Islington in London tops the list for the best conditions for entrepreneurs, closely followed by Edinburgh. According to Cebr’s criteria for success, including start-up activity, economic conditions, business conditions and government support, Islington achieved a near perfect score. The latter’s success is mainly due to its highly educated workforce and excellent internet speed. Edinburgh, a close runner-up, benefits from high scores for government support and robust performance across other indicators.
London tops the list of the best places for entrepreneurial activity with Islington and Hackney particularly dominating as the hosts of the digital and creative industries that have changed the face of East London over the past few years. London benefits from high scores for employment density and the concentration of financial services jobs and productivity. Tower Hamlets, Hackney and Redbridge can be found towards the top of the London list as start-ups move further away from central London to make the most of lower office rents.
About the Centre for Economics and Business Research:
Cebr – the Centre for Economics and Business Research - is a leading economics consultancy, founded in 1993 by Douglas McWilliams. Cebr has wide ranging experience and expertise on subjects from micro-economic impact studies to macro-economic forecasting across the UK, the Eurozone and global economy.
For more information and the latest reports from Cebr, please visit www.cebr.com