More UK start-ups survive first year of business than European counterparts
Britain's start-up survival rate healthier than France and Germany thanks to more relaxed employment laws and government initiatives
More of Britain’s start-ups are surviving their first year of business than their European peers, according to a study by Rosseau Associates.
The research highlights that, of the 234,000 UK businesses launched in 2011, 93% of start-ups survived their first year of business, compared to an average survival rate of 83% across Europe.
Britain’s start-up scene has had more “robust health” than Europe’s other major economies France (79%) and Germany (78%), and has experienced the strongest economic growth in Europe as a whole.
Rosseau Associates suggests this could be a result of the UK’s comparatively relaxed employment laws, making it easier to find staff. The business consultancy has argued that, in the UK, it is also easier to vary the number of hours worked and how many staff can be employed without facing legal issues.
The government’s business initiatives are also cited as a significant help to business survival. For example, R&D tax relief allows small businesses to claim an extra 125% of their eligible research and development costs from their taxable income
In addition, the new government recently pledged to cut red tape for small businesses by at least £10bn over the next five years, as many companies believed this should be top priority.
The first ever small business minister, Anna Soubry, has also been appointed to represent the interests of small business in government.
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Michael Heath, business development director at Rousseau Associates, commented: “UK small businesses have been given a helping hand with favourable government policies, which have allowed them to keep growth on track.
“These policies have helped to make it less of a risk for start-ups to take on new staff and expand. While zero hours contracts have often been misunderstood they can offer both employers and employees flexibility.
“The recession also forced a great deal of innovation. For example, while the high street was facing huge numbers of voids the pop-up shop and restaurant model provided an efficient way for entrepreneurs to test new concepts before committing to setting up a business.”