- The number of new UK businesses rose by 78% to 414,000 between 2010 and 2016
- The impact of the Brexit vote upon entrepreneurial activity remains to be seen, but consumer spending has already dipped and business investment has slowed.
LONDON — British entrepreneurs are forming an increasingly vital part of the economy with the number of new businesses rising by 78% to 414,000 between 2010 and 2016 according to the ONS, but the impact of the Brexit vote entrepreneurial activity remains to be seen.
New research commissioned by wealth manager Kleinwort Hambros by the Centre for Economics and Business Research (Cebr) found that the birth rate and survival rate — the number of businesses still in operation after one year — both improved dramatically between 2010 and 2016.
In particular, the research found that start-ups in professional, scientific, and technical businesses have the best survival rate of any sectors, with 95% of businesses founded in 2014 still in operation in 2015, the last year for which that data is available.
Paul Bentley, head of entrepreneurs at Kleinwort Hambros, said entrepreneurial activity was driven by a more benign macroeconomic environment since the financial crash, although consumer spending in Britain has dipped in the wake of the Brexit vote.
“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 said.
Business investment has also slowed since the UK voted to leave the EU, but still rose by 0.2% in the second quarter of this year.
The data also found that London, Edinburgh, and Aberdeen were the locations where British businesses are most likely to succeed, based on a ranking which analysed start-up activity, economic conditions, business conditions and government support:
The north London borough of Islington came first on account of its highly educated workforce, while Edinburgh came second for its high score for government support.