Surge in entrepreneurship as UK start-ups reach record high in 2020

Surge in entrepreneurship as UK start-ups reach record high in 2020
Dan Martin
Dan MartinDan Martin Content & Events

Posted: Tue 12th Jan 2021

There were more than 770,000 new business formations in 2020 as the coronavirus pandemic led to a record number of start-ups.

Analysis of Companies House data by the Centre for Entrepreneurs shows there were 772,002 new businesses last year, up 13.25% on 2019.

Although January 2020 saw 0.6% fewer companies set up and there was a 29% year-on-year decline in April as the first COVID-19 lockdown took hold, start-ups had surged by June with a 47% average growth across the UK.

Despite more lockdowns, the growth continued for the rest of the year.

The COVID economy

The so-called 'COVID economy' drove much of the growth with major increases in the manufacturing and retail of medical equipment, pharmaceutical goods, cleaning products and personal protective equipment.

For example, disinfecting services saw a 230% hike and medical good retailers increased by 146%.

start-ups in 2020 - COVID economy

The at-home economy

With millions staying at home, thousands of people started new companies. Online retail start-ups doubled to 43,127 in 2020.

The demand for certain products inspired many to start businesses with retailers of bread and cakes increasing by 77% and sellers of flowers, plants and seeds rising by 75% to 1,737.

UK start-ups in 2020 - retail

Hospitality and leisure

Unsurprisingly given the heavy restrictions, hotels, restaurants, pubs and bars all saw a decline in new start-ups created. Conference organisers also fell by 23% with tour operators seeing the same decrease.

Takeway food shops and mobile food stands saw a 21% hike though with 17,399 new businesses set up.

start-ups in 2020 - hospitality and leisure

Regional start-ups

England, Wales and Scotland all saw year-on-year rises - 14.3%, 5.6% and 2.1% respectively - but Northern Ireland saw an overall 1.7% decrease.

London was the area with the biggest growth in start-ups. There was a 22% rise to 269,734 businesses. Alongside the West Midlands, London also had the strongest recovery post-lockdown with a 62% increase in June.

You can see specific data for all local authority areas here.

start-ups in 2020

Dan Martin
Dan MartinDan Martin Content & Events
I'm a freelance content creator and event host who helps small businesses and the organisations that support them. I have 18 years of experience as a small business journalist having interviewed hundreds of entrepreneurs from billionaires like Sir Richard Branson to the founders behind brand new start-ups. I've worked for a range of leading small business publications and support groups, most recently as head of content at Enterprise Nation where I was responsible for the prolific output of content on the company's blog and social media. I'm based in Bristol where I run and host regular events with the local small business community and have strong connections to major business organisations in the south west region. In total, I've hosted over 50 events; from intimate meet-ups to conferences with an audience of hundreds including events for international brands like Facebook and Xero. I'm also a big fan of podcasts having hosted Enterprise Nation's Small Business Sessions as well as lots of online events including Facebook Live interviews, webinars and three live web chats from inside 10 Downing Street. With my partner, I co-run Lifestyle District, a lifestyle blog focused on culture, art, theatre and photography. I'm here to help. I'm volunteering free advice calls of up to an hour as part of the Recovery Advice for Business scheme, over the next 6 months. Please get in touch to see how I can help your business. 

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