UK entrepreneurial performance up 10% since 2011 to all time high
Every region in England saw growth, with West Midlands and Yorkshire and the Humber responsible for producing the highest number of scale-ups
The UK’s entrepreneurial performance has increased by 10% since 2011 to an all time high and is bouncing back after a decline in 2014, according to Barclays’ eighth Entrepreneurs Index.
The proportion of high growth companies in the UK has seen a marginal increase of 0.7% in 2016 – in sharp contrast with the 21% decline that took place last year – while the number securing growth capital has increased by 6%. Overall, there was a 4% rise in the number of active businesses from December 2015 to June 2016 equating to 345,000 new incorporations.
By region, the West Midlands (+2.7%) and Yorkshire and the Humber (+1.5%) were responsible for producing the highest number of scale-ups, while Scotland (-2.9%) and Wales (2.2%) both saw a decline.
There has also been an increase in the number of mergers & acquisitions of companies less than five years old, with the number of deals between December 2015 and June 2016 up 33% to a record level.
The service sector was responsible for the majority of deals (23%), followed by financial services (10%), industrial products and services (7%) and computer software (7%). However, IPO activity amongst 0-5 year old enterprises dropped by 36%.
The construction sector created the most high-growth companies (+4.6%), while business services (+1.3%), agriculture (+1%), retail (+1%) and customer services (+1%) were all above the UK average.
The ‘Total Early-stage Entrepreneurial Activity’ (TEA) – the number of people in the UK adult working-age population who are a nascent entrepreneur or owner-manager of a new business –dropped by nearly 4% to the end of 2015.
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Akshaya Bhargava, chief executive of wealth, entrepreneurs and business banking at Barclays, said: “Uncertainty is part of everyday life for entrepreneurs and those that succeed navigate unchartered waters and adapt to find opportunities to thrive.
“This year’s Entrepreneurs Index shows that before the EU Referendum, regulations and conditions for entrepreneurs had improved, making it easier to start a business and contributed to a rise in M&A. Until the outcome is fully known, it’s vital that we do everything in our power to deliver a strong environment to sustain UK entrepreneurial growth.”