UK sees 101 new businesses launched every hour in 2023

Despite our current economic challenges the first half of 2023 has showcased a remarkable surge in entrepreneurship: a staggering 101 new businesses springing to life every hour across the United Kingdom, according to a recent study by iwoca, one of Europe’s largest small business lenders.

The data reveals an impressive 9% increase compared to the same period in 2022, when 402,000 businesses were set up.

London has emerged as the frontrunner in business creation per capita, with 1,768 new businesses per 100,000 people, and Camden led the pack among all London boroughs, boasting an impressive 13,646 new companies per 100,000 residents. This marked a substantial increase of nearly 3,500 companies compared to the previous year. 

Hackney (6,383) and Islington (6,241) also featured prominently in the top three, highlighting London’s dominance in the entrepreneurial landscape.

The North West followed closely behind, registering 612 new businesses per 100,000 residents, rising from its third-place position in the previous year – and The West Midlands, last year’s runner-up, slipped to third place with 574 businesses established per 100,000 residents.

Scotland found itself at the bottom of the list for the second consecutive year, with a mere 365 businesses created per 100,000 inhabitants. The North East unfortunately didn’t fare much better, securing the second-to-last spot with 376 businesses per 100,000 residents. But overall, the atmosphere in the entrepreneurial and small business psyche is positive, and there is always room for change.

Full UK new business analysis

Encouraging signs for self-employment

While self-employment experienced a decline throughout 2020 and 2021, the trend shifted in 2022, with sustained increases suggesting a resurgence in entrepreneurial spirit.

According to the Office for National Statistics (ONS), the UK counted 4.39 million active self-employed individuals so far, reflecting a notable increase of 154,000 compared to this time in 2022.

ONS data also revealed that in the first quarter of 2023, 43% of the 738,000 job moves were initiated by resignations, a slight uptick from the 40% reported in 2022. This indicates that more individuals have been willing to leave traditional employment and venture into entrepreneurship this year.

Seema Desai, Chief Operating Officer at iwoca, expressed optimism regarding the surge in business creation, even in the face of high inflation and economic uncertainty. 

She noted that: “This will be vital for the country’s economic growth over the next few years, and is a huge vote of confidence in the UK as a place to do business,” and that the data “shows the spirit of entrepreneurship is strong across the whole country”.

This surge in business creation, combined with the Governments’ recent commitment of £1 billion to support said new businesses, bodes well for the UK’s economic growth in the coming years – and signifies a strong vote of confidence in the country as a hub for business development.