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Pandemic-born startups could contribute more than £20bn to UK economy

pandemic startups

Startups founded during the pandemic are forecast to contribute more than £20bn to the UK economy, according to new data.

A joint report from NatWest Group and CBI Economics has revealed that in the first year of the pandemic alone, around 800,00 new companies were registered in the UK, an increase of 22% from the prior year.

The report also showed how startups born in the pandemic were forced to innovate with new technology and business practices to navigate the difficult period. The study found these companies were more likely to incorporate the use of new technologies and sustainable materials.

“Pandemic-born businesses – led by ambitious, resilient entrepreneurs – have innovated in so many ways, and at such speed, giving me a great sense of optimism,” said Tony Danker, director-general of CBI.

The study further highlighted the UK’s position as an entrepreneurial hub, finding that pre-pandemic, the number of new businesses created as a share of total firms was 13%, a higher figure than both the US and Germany.

“A thriving economy is dependent on a flourishing entrepreneurial culture. As we come out of the pandemic, despite rising inflation and the cost-of-living crisis, now is a great time to start a business and become an entrepreneur,” said NatWest Group chief executive Alison Rose

“There’s more support than ever in terms of access to grants and funding, networking, mentoring and angel investment.”

Looking into the issues facing recently founded UK startups, the report found that only 13% cited regulation as a challenge when starting a company. Access to finance, however, was a key concern for 55% of UK startups.

Danker said: “It’s crucial we give these leaders the support they need to grow and succeed. Rising energy prices, supply chain challenges, an uncertain economic outlook and a cost-of-living crisis mean we’ve some testing months, and possibly years, ahead.