The Brexit vote may have precipitated a period of gloom and economic uncertainty, but the start-up business sector is booming. That’s the opinion of the Virgin Group. A new study its Virgin StartUp arm found that entrepreneurship in the UK is alive, well and flourishing. The study found that the number of new start-up businesses has topped 1.2 million, and that the sector now accounts for 40 per cent of all active businesses in the UK.
So what did the Virgin report discover? Well, the headline figures were that start-up businesses, which the report defined as businesses which had been trading for less than 3 years, were responsible for generating an impressive £196 billion for the UK national economy. What’s more, Virgin’s study also found that UK start-ups generated many jobs and kept 3.4 million workers in employment. The good news is that with a further 366,000 businesses predicted for creation in 2016, those figures are likely to rise even further.
So where were most of the start-ups located? Well, unsurprisingly most new start-ups were found in London. In fact the report found that London produced 64 per cent more start-ups businesses than its nearest rival – the south east of England. The news in the capital was not all positive however, as the report also found that London also boasts the highest number of start-up closures and failures. In contrast, the south west and east of England, whilst not producing anything like as many new start-up businesses, experienced the highest levels of 3 year start-up survival rates – 63 per cent and 62 per cent respectively.
What about the rest of UK? What did Virgin discover here? Well, Scotland accounted for 6 per cent of all start-ups, and fared well against other regions like the East Midlands (6 per cent), the West Midlands (7 per cent) and Yorkshire and the Humber (7 per cent). In the South West of England start-up creation had also flourished on the back of the thriving tech hub across Bristol and Bath.
Which industry sectors benefited most from new start-up activity? Well, the Virgin report found that the sector that had experienced the most significant growth in the annual creation of start-ups was the information and communication sector, with an 80 per cent increase since 2009. This was closely followed by business services and professional services.
Sir Richard Branson, founder of the Virgin Group, said it was good to see that start-up businesses in the UK were flourishing, but he warned that if these new businesses were to have any chance of a long-term future, they would need help and further funding. Speaking about the report Sir Richard said
“I’ve seen first-hand some fantastic, disruptive businesses, who are making huge progress in their industries.”
“Our report shows the fantastic boost start-ups are bringing to the economy. Entrepreneurship truly is alive and well across the UK.”
“But an improving start-up landscape is only part of the story as once a business hits maturity and begins to move out of its infancy years, pre-scale businesses find further funding restrictive and difficult to navigate.”