British businesses formed during the pandemic could be a significant driving force for the UK economy.
Around 800,000 companies were formed during the first year of the pandemic, which was up by nearly a quarter, at 22 per cent, on the previous pandemic-free year.
More adopt the latest technology
Now data from a joint report by CBI Economics and the NatWest Group, shows that businesses born during the pandemic could add a whopping £20.4 billion to the UK economy.
Before the pandemic struck, the number of new businesses eclipsed other economies, up eight per cent on the US and 11 per cent on Germany, with the survival rate in 2019 up at 89 per cent, nine points higher than the EU average.
The survey found that these new enterprises were more likely to adopt the newest technologies compared to their pre-pandemic counterparts (56 per cent versus 71 per cent).
In addition, these new businesses are 20 per cent more likely to use both sustainable materials and suppliers.
The survey of 543 firms also found:
- When starting their business only 13 per cent named regulation and red tape a challenge.
- Access to finance was a key concern for many, with 55 per cent saying access to finance was a concern, compared with 42 per cent before the pandemic.
- 80 per cent, or four out of five firms, report no plans to wind down their business.
Tony Danker, CBI Director-General, said: “Pandemic-born businesses – led by ambitious, resilient entrepreneurs – have innovated in so many ways, and at such speed, giving me great sense of optimism. It’s crucial we give these leaders the support they need to grow and succeed.
“Rising energy prices, supply chain challenges, an uncertain economic outlook and cost-of-living crisis mean we’ve some testing months, and possibly years, ahead.
“For start-ups which count their experience in months, not years, that environment is even tougher. That said, even if the cost of doing business is rising, the cost of starting a business shouldn’t. The UK needs the ideas and ingenuity of entrepreneurs to help us grow.”
For help and advice on related matters, please contact us.