The data released today does not paint a rosy picture for the health of business formation. Far fewer businesses were set up in 2023 than in 2022. This dramatic decline also emphasizes the harsh realities that entrepreneurs face in their formative years. With only 39% of businesses created in 2018 surviving to see their fifth anniversary, the risks involved in entrepreneurship are stark and significant. Policymakers need to recognize this and provide robust support to nurture these fledgling enterprises.
Regional disparities are also hard to ignore. The case for additional support to regional businesses is clear. London significantly outperforms all other regions when it comes to the proportion of businesses classed as 'high growth'. In fact, 6.3% of London-based businesses with 10 or more employees are classified as 'high-growth', showcasing their potential. This sharply contrasts with the much lower figures of the West Midlands and Northern Ireland, which demonstrate the need for targeted government assistance.
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