As the UK economy has gradually recovered from the effects of the pandemic there has been the usual mixture of good and bad news. The glass could be half full, with the UK growing at the fastest rate of G20 countries, or half-empty, with worker shortages threatening to derail the recovery, both being headlines within five minutes of each other.
But at the end of August there was one piece of undisputed good news. City AM reported that the UK had been named as the best country in Europe to start a business. The study, carried out by e-money platform Tide, also found that the UK had the lowest costs for starting a business.
The study considered a number of factors, including the jobless rate, the ease of doing business and the number of days required to set up a business, with Ireland coming second in the rankings, ahead of Holland and Denmark. Germany, Italy and Spain didn’t feature in the top ten.
You may have heard about the record numbers of people who set up their own business during the pandemic. A significant proportion of these will be younger entrepreneurs and another report in City AM, published earlier in the month, gave even more cause for optimism. The headline on the article based on a report published by AXA was very simple. “SMEs with young business owners saw stronger performance in the pandemic.”
In 2020 companies run by decision makers aged between 55 and 64 saw turnover reduce by 29%. Companies run by 45 to 54 year olds didn’t fare much better. SMEs run by people between 25 and 34 saw turnover fall by just 12%. But for companies run by 18 to 24 year olds the drop in turnover was just 7%.
For Claudio Gienal, CEO of AXA, the conclusion was obvious. “The report finds that younger entrepreneurs have brought out new services and products, listened to the needs of local clients and been faster to deploy digital solutions.”
According to statistics from the Federation of Small Business (FSB) there were 5.94m small businesses with up to forty nine employees in the UK at the start of 2020. This made up 99.3% of total businesses in the UK with 13.3m people employed and a turnover of £1.6tn, equal to 36% of the turnover of the private sector.
As more and more people, especially young people, decide that running their own business will give them the work/life balance they want post-pandemic, any news that is good for small businesses and business start-ups is going to be good for the overall UK economy.
The UK economy grew at the fastest rate of all the G20 countries in the second quarter of the year, with the OECD reporting growth of 4.8%. Making the UK an attractive place to start and build a business can only consolidate that economic growth which, in the long run, will benefit us all.