Surge in entrepreneurship as UK start-ups reach record high in 2020

There were more than 770,000 new business formations in 2020 as the coronavirus pandemic led to a record number of start-ups.

Analysis of Companies House data by the Centre for Entrepreneurs shows there were 772,002 new businesses last year, up 13.25% on 2019.

Although January 2020 saw 0.6% fewer companies set up and there was a 29% year-on-year decline in April as the first COVID-19 lockdown took hold, start-ups had surged by June with a 47% average growth across the UK.

Despite more lockdowns, the growth continued for the rest of the year.

The COVID economy

The so-called 'COVID economy' drove much of the growth with major increases in the manufacturing and retail of medical equipment, pharmaceutical goods, cleaning products and personal protective equipment.

For example, disinfecting services saw a 230% hike and medical good retailers increased by 146%.

The at-home economy

With millions staying at home, thousands of people started new companies. Online retail start-ups doubled to 43,127 in 2020.

The demand for certain products inspired many to start businesses with retailers of bread and cakes increasing by 77% and sellers of flowers, plants and seeds rising by 75% to 1,737.

Hospitality and leisure

Unsurprisingly given the heavy restrictions, hotels, restaurants, pubs and bars all saw a decline in new start-ups created. Conference organisers also fell by 23% with tour operators seeing the same decrease.

Takeway food shops and mobile food stands saw a 21% hike though with 17,399 new businesses set up.

Regional start-ups

England, Wales and Scotland all saw year-on-year rises - 14.3%, 5.6% and 2.1% respectively - but Northern Ireland saw an overall 1.7% decrease.

London was the area with the biggest growth in start-ups. There was a 22% rise to 269,734 businesses. Alongside the West Midlands, London also had the strongest recovery post-lockdown with a 62% increase in June.

You can see specific data for all local authority areas here.