From lockdown to opening up. The slings and arrows of the unprecedented pandemic. Businesses have pivoted. Businesses have petrified. Businesses have perished.
Yet the defining feature of the last 18 months is the record number of new company formations.
Companies House recently published data for the year to the end of March 2021. There were 810,316 company incorporations in 2020/21. This is an increase of 21.8% when compared with 2019 to 2020. 2020 to 2021 saw the highest number of incorporations on record. This trend continues. The first 6 months of this calendar year has seen 60,000 more new companies established than in 2020.
ONS is another data source. They report business creations in the UK in Quarter 1 2021 as being 14% higher than Quarter 1 2020. This is the highest first-quarter figure since the start of this series in 2017. On average these companies have 2.3 members of staff. This adds up to a significant source of employment.
Around half of all companies in the UK are less than 5 years old. All this goes to show that the entrepreneurial and start-up spirit is to the vibrancy of the UK economy.
Not every business is going to thrive of course. Over the last 18 months, stories of businesses wiped out through no fault of their own are legion. Companies House and ONS also report company deaths as well as births. Company dissolutions, to use the technical term, have been harder to track. The government has relaxed regulations relating to 'strike-offs' during the pandemic.
Over the long term though, the population of companies in the UK continues to grow. Between 1979 and 2021, the total register has increased by 3.9 million companies. One of the few decreases came in 2008 - 2009, the financial crisis. This crisis has generated the opposite response - a boom in start-ups.
The goal must be for as many of those companies to become sustainable businesses. Working at the heart of local economies. A few will have a bigger dream. The UK has recorded its 100th tech firm valued at $1 billion or more. This figure has more than doubled since 2017. It is also more than twice the number of Germany, our closest European rival, Germany. In fact, The UK ranks behind only the US and China.
Napoleon may have once called the UK a 'nation of shopkeepers'. Today, we are a nation of start-ups. We can all be grateful for that. And we should support these businesses through our spending power. As consumers and buyers of business products and services. And as a State, we should continue to question whether we could be doing more.
