The number of new businesses being launched reached record levels in 2015, with over 608,100 new companies being incorporated last year, a 5% increase on 2014, which itself set a record.
The Centre for Entrepreneurs (CFE), which compiled the research from Companies House records, said the findings represented a “cultural shift in the UK economy”. This is partly because the improving economy and resultant increase in hiring from established companies hasn’t dented the continued growth in entrepreneurialism we’ve witnessed in recent years.
“It shows it isn’t just survival entrepreneurship,” Matt Smith, director of the CFE, told BusinessZone. “People still wanted to start their own business now that there are jobs available.”
Smith added the trend reflects an increase in self-employment, more small businesses and “a lot more flexibility to what you do”.
Indeed, the research notes the wider societal trends of increased flexible working hours, and greater professional and personal autonomy that happened after financial crisis, arguing this shows entrepreneurship is becoming ingrained in the UK’s business culture.
The increase in the number of startups doesn’t appear to have lead to an increase in business failures, according to Smith, although survival rates dropped marginally in first three quarters of last year.
London continued to dominate the startup landscape, accounting for 15 of the top 20 areas with the highest number of formations per capita. However, Manchester, Edinburgh and Birmingham are making significant in-roads. In addition, the study noted:
- University towns are underperforming in entrepreneurial activity, with Cambridge startups per 1,000 population dropping from 15.9 in 2014 to 9 in 2015. In addition, Oxford only saw 6.8 startups per 1,000 people, raising concerns that universities are failing to capitalise on their entrepreneurial potential
- British seaside towns – including Brighton, Poole and Southend-on-Sea – also make the top 20 on a per capita basis, confirming a trend identified in a recent CFE publication on the rising entrepreneurial tide reviving British seaside towns
CFE has produced a map of support for startups, including accelerator programmes, co-working spaces, government initiatives and grants, to help encourage the positive trend in the number of new businesses.