Thousands set up new businesses during lockdown

By Nicky Godding

2 November 2020

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The number of new businesses increased by 51,269 (30.2 per cent) in the third quarter of 2020, compared with the same quarter of the previous year, according to government statistics. This is the largest quarter three year on year increase since 2012, when quarterly breakdowns were first recorded.

Of these, audit, tax and consulting firm RSM found the number of new UK tech start-ups rose by almost 16 per cent in the third quarter of this year.

A total of 10,435 software development and games businesses have been incorporated so far this year, according to data held by Companies House. In quarter three 2020 there were 3,641 tech start-ups incorporated, up by 15.5 per cent since quarter one, when 3,150 were recorded.

David Blacher, Head of RSM technology, media and telecoms team, said: “At a time when many sectors are feeling crippled by the impact of the pandemic, it is encouraging to see the tech industry experiencing growth. This can be attributed in part to the lockdown, which drove an increase in demand for technology to support remote working. The huge increase in working from home, as well as leisure time spent at home, has meant far greater need for digital technology and a growing demand for digital entertainment.”

Regional figures demonstrated strong growth in many areas of the UK, with Scotland seeing a 57 per cent increase in the number of tech start-ups in quarter three compared with quarter one figures. Second highest was the West Midlands with a 48 per cent rise. The South West of England recorded a rise of 20 per cent and the South East, a rise of 11 per cent.

While most areas saw at least some growth in tech start-ups, in some regions the technology sector may be declining. Wales had a six per cent reduction in the number of tech start-ups in quarter three compared with quarter one figures, while the east of England dropped 1.4 per cent, and Yorkshire and the Humber was down by almost one per cent.

According to another piece of research, this time by Royal Mail, nearly 16,000 e-commerce businesses were created between March and July this year.
At the same time, Royal Mail saw a substantial shift in its business from letters to parcels. Parcel volumes grew by 34 per cent (177 million more parcels), while parcel revenues grew by 33.1% year on year for the five months to 31st August.

By Nicky Godding

Nicky Godding is editor of The Business Magazine. Before her journalism career, she worked mainly in public relations moving into writing when she was invited to launch Retail Watch, a publication covering retail and real estate across Europe.

After some years of constant travelling, she tucked away her passport and concentrated on business writing, co-founding a successful regional business magazine. She has interviewed some of the UK’s most successful entrepreneurs who have built multi-million-pound businesses and reported on many science and technology firsts.

She reports on the region’s thriving business economy from start-ups, family businesses and multi-million-pound corporations, to the professionals that support their growth and the institutions that educate the next generation of business leaders.