19 September 2023 – The past few years were tough for businesses around the world. But 2023 seems to be the year of the entrepreneurial spirit in the UK, despite the challenges.
When the COVID-19 pandemic reached the UK at the beginning of 2020, most people and businesses thought that the ensuing lockdown would only last for a few weeks. But over the next two years, pandemic restrictions and lockdowns made trading difficult for many small businesses.
Only government support, such as the furlough scheme and other support measures kept many from going under. As the UK came out of the pandemic, supply chain issues and rising inflation pushed many already struggling small businesses over the edge.
But now, in 2023, despite a still challenging economic landscape, the entrepreneurial spirit of the Brits got revived, with 101 new businesses created every hour so far between January and June this year.
Entrepreneurial Spirit Strongest In London
New research by iwoca has shown that the UK business register has received a boost in 2023. After analysing Comapnies House data, the small business lender revealed that over 436,000 new businesses were registered in the first half of 2023.
This is a staggering 101 new businesses every hour between January and June this year. In the same period last year approximately 402,000 new firms were set up, which means 2023 has seen an 8% increase.
London is leading the charge, proving that the entrepreneurial spirit is strongest in the capital. Iwoca’s Business Hotspots 2023 shows that per 100,000 people 1,768 businesses were started in London during the first half of this year. This is more than in any other region in the UK.
In total, 155,625 new businesses were started in London in the first six months of 2023, that’s on average 865 new companies every day.
Outside the capital, the North West has seen the most business incorporations, with 612 new businesses per 100,000 people, moving up a place from last year. The West Midlands, last year’s runner-up, had to content with the third spot, with 574 new businesses in 100,000 people.
Overall, 45,407 new businesses were registered in the North West of England, which equates to an average of 252 new companies having been set up daily. The West Midlands has seen 34,152 new firms being registered, or on average 190 every day in the first half of 2023.
At the bottom of the list is Scotland, with only 365 new businesses created per 100,000 people. Wales did marginally better, with 371 new incorporations.
Even though Scotland has had the fewest new companies created per 100,000 inhabitants, overall 19,992 new businesses were registered in this country, or 257 per day. Wales has seen 11,523 new incorporations, which equals on average of 64 per day.
New Self-Employment Boost Driven By Gen Z
During 2020 and 2021, self-employment rates declined, probably due to the challenges pandemic restrictions posed for small businesses. But in 2022 the desire to ditch employment picked up again, which continues into 2023.
According to data by the Office for National Statistics, so far this year, there were 4.39 million active self-employed people in the UK. This is 154,000 more than at the same time in 2022.
In the first three months of 2023, a whopping 43% of the 738,000 job moves were caused by resignations. This is 40% more than in 2022, showing that people in the UK are leaving their 9 to 5 jobs to become their own boss.
Generation Z, people born between the late 1990s and early 2000s, seem to drive this new boost in entrepreneurship. According to research by GoDaddy, this generation prefers to run their own business rather than getting a part-time job working in retail or hospitality.
The domain registrar surveyed over 1,000 Gen Z people in the UK and found out that 29% already have a side hustle and 50% are planning to start one.
It has never been easier to start a side hustle, and it’s brilliant to see the emergence of Gen Z entrepreneurs who are inspired to become their own boss and break away from more traditional sources of income.Andrew Gradon, Head of GoDaddy UK & Ireland
58% of respondents said running their own business is more attractive than working part-time in retail or hospitality to earn extra cash.
The main reason why these young Brits start a side hustle is money, and not a desire to be their own boss. 69% have said that financial security is their main concern during this cost-of-living crisis.
Gen Z prefers starting their own hustle over working a part-time job in the typical industries because of the hours involved. Young Brits want their evenings and weekends free to enjoy, not to be taken up by work.
The re-emergence of the entrepreneurial spirit is great news for the UK economy. If these new businesses can thrive, they can help our economy to recover from the recent years and grow.