The number of new businesses being launched in the UK’s poorest areas has surpassed the national average, according to new research.
The research, in the form of the Entrepreneurs Index, was compiled by Barclays and the Business Growth Fund (BGF). Overall, it found that the number of active companies in the UK increased by 3.9% in the six months to June 2014, reaching a total of 3m.
Since the beginning of the recession, Western markets have witnessed a flurry of new businesses in form of entrepreneurships and mini-entrepreneurships. In the UK, this meteoric rise has been a reaction to the recession, whilst also being a key part in helping prop up the economy’s recovery.
The start-up trend, it appears, is showing no signs of abating, with the path now paved for a new era of business growth. Currently, 7.1% of 18 to 64-year-olds are in the process of starting or already starting a new business, whilst a record 550,000 businesses are expected to start in 2014.
Whether the rise will continue is yet to be seen, with many debating whether new start-ups are a reactionary response to job losses, or whether they encompass a broader change in attitudes towards business and employment.
Richard Phelps, managing director of Barclays Wealth and Investment Management, said: “It is clear that the conscious drive from government and the private sector to encourage small businesses has truly embedded entrepreneurship into the UK business.”
What is more surprising about the research results, however, is the influx of businesses within some of the UK’s most economically damaged areas. Within the same time period, Manchester increased its business base by 8.6%, Liverpool by 8%, Blackpool by 5.4% and Doncaster by 4.6%. Comparatively, wealthier areas such as Beverley added just 2.5%.
Meanwhile, investment in SMEs has also grown. In the 12 months to June 2014, there was an 8.2% increase in the number of partial or full sales of companies, resulting in at least £200,000 of individual wealth.
Stephen Welton, chief executive of BGF, said: “It is very encouraging to see not only a swell in the number of new businesses starting up, but also that people are starting to realise the wealth behind these businesses once again.”
