Pandemic-born businesses could add £20.4bn to UK economy

Businesses founded during the pandemic could boost the UK economy by up to £20.4 billion according to a recent report by CBI Economics and NatWest Group.

Around 800,000 companies were formed in 2020, representing a 22 per cent increase on the year before. CBI Economics surveyed 543 of them for its report titled 'How the pandemic shaped the start-up landscape'.

One of the key differences to the concerns of business leaders following the pandemic is access to finance, with 55 per cent noting this as a concern post-pandemic, compared to 42 per cent before.

On the other hand, ‘Generation Covid’ businesses tend to be more open to technological integration than their pre-pandemic counterparts, with 71 per cent saying it is important to adopt the newest technologies versus 56 per cent.

Pandemic-born business also tend to be more environmentally conscious, being 20 per cent more likely to use both sustainable materials and suppliers.

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One of these is The Book Shelf, a Halesowen-based company supporting authors in publishing their work through a mix of coaching and editing.

Its founder, Ameesha Smith-Green, said: “Everything we do as a business is trying to encourage authors to be more sustainable. We encourage eBooks and print on demand rather than book printing. We’re also working towards B Corp certification, and we’ve set up a partnership with the Rainforest Trust.”

The UK has historically been a good place for entrepreneurship. Before the pandemic, the number of new businesses created as a share of total firms was 13 per cent, higher than both the United States (eight per cent) and Germany (11 per cent). These businesses also tended to be resilient, with 89 per cent surviving their first year in 2018.

The report shows this is a trend which has continued, as 80 per cent of firms say they have no plans to wind down their business. The UK is also seen as facilitative to startups, with only 13 per cent citing regulations as a challenge when beginning their business.

Tony Danker, director-general of CBI, said: “Pandemic-born businesses - led by ambitious, resilient entrepreneurs - have innovated in so many ways, and at such speed, giving me great sense of optimism. 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 cost-of-living crisis mean we’ve some testing months, and possibly years, ahead. For start-ups which count their experience in months, not years, that environment is even tougher.

“That said, even if the cost of doing business is rising, the cost of starting a business shouldn’t. The UK needs the ideas and ingenuity of entrepreneurs to help us grow.”

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