UK start-up community worth £196bn a year to UK economy
Virgin StartUp has called on the chancellor to address access to funding in the Autumn Statement and boost UK start-up survival rates
The UK’s thriving start-up scene generates more than £196bn for the UK economy every year, according to Virgin StartUp's first annual The Start-Up Low Down: How Start-ups are changing Britain report.
According to the report, 40% of all businesses in the UK were established within the last three years and are responsible for 12% of all people or 3.24 million people.
Entrepreneurs are also helping to combat unemployment across the UK by creating work for themselves, with 45% of respondents unemployed when they applied for a start-up business loan.
However, it appears more needs to be done to support fledgling businesses with 42% of start-ups founded between 2009 and 2014 not surviving past the three year mark. Of those, 61% said they lacked the confidence or access to finance to maintain growth.
In the depths of the recession, 2009 saw the lowest number of new start-ups created in the UK (269,000), but that figure has since increased by more than 50%, with 366,000 businesses established so far in 2016.
Companies in the health and education sector have the highest rates of survival at 68% (10% higher than average), with the hospitality sector enduring amongst the lowest (55%).
The UK’s so called ‘Flat White Economy’, populated by information and technology start-ups, experienced the most significant growth between 2009 and 2014 at 80%.
Sir Richard Branson, Virgin Group founder, commented:
“I’m so proud of everything Virgin StartUp and the thousands of entrepreneurs we support have achieved over the last three years. I’ve seen first hand some fantastic, disruptive businesses, who are making huge progress in their industries.
“Our report marks Virgin StartUp’s third birthday and shows the fantastic boost start-ups are bringing to the economy. Entrepreneurship truly is alive and well across the UK.”