Personal Finance

UK Startup Statistics: Top Industries and Regions

Less than half of all UK startups make it through their 5th year. We analysed the most recent business demography data from the Office for National Statistics (ONS) to determine how a startup's location and industry might affect its odds of success. Here are the industries and regions of the UK that have posted the best startup growth and survival rates in recent years.

The United Kingdom may be one of the best places in Europe to start a new company, but what are the read odds of success? It depends in part on where you're located and the industry of your new venture.

UK Startup Viability by Industry

The best industries for startups in the UK have a large number of startup births, strong growth in the number of new companies formed and high survival rates. Data across these three metrics from the ONS shows that the top industries for new businesses in the UK include health, education, transport & storage, business admin & support and professional, scientific & technical.

chart showing the top UK industries for startups

Birth Rates by Industry

There were more professional, scientific and technical startups born in 2016 than any other industry: 86,265, which reflects a 41% growth in births from 2012. Next, there were 64,075 business administration and support service companies formed in 2016, followed by 51,615 construction companies.

The industries with the biggest surge in birth growth were transport and storage (215% increase from 2012 to 2016), education (174% increase) and business admin and support services (113% increase).

Industry2016 BirthsBirth Growth 2012 - 2016
Professional, scientific and technical86,26541%
Business administration and support services64,075113%
Construction51,61577%
Information and communication33,62531%
Transport and storage (inc. postal)27,400215%
Retail27,12518%
Accommodation and food services25,87528%
Production18,39029%
Arts, entertainment, recreation and other services16,80012%
Health16,50093%
Property12,68538%
Wholesale9,825-1%
Education9,475174%
Motor trades8,55035%
Finance and insurance (Excl 6420)5,69528%

Survival Rates by Industry

The most recent 5-year survival rate for UK startups is 43.2%. That means more than half of all startups fail within 5 years. However, survival rates are much different from industry to industry.

Health-related startups have had the best survival rates in the UK, with 55% of new ventures making it through their 5th year. Education startups were the next most successful in terms of longevity, with a 49.1% 5-year survival rate.

chart showing UK startup survival rates by industry
New businesses related to health have had the best survival rates

Accommodation and food service startups are the least likely to succeed, with only 34.2% surviving a full 5 years.

Industry1-Year Survival Rate2-Year Survival Rate3-Year Survival Rate4-Year Survival Rate5-Year Survival Rate
Health93.5%81.7%70.6%62.0%55.0%
Education91.5%76.6%64.0%56.1%49.1%
Information and communication92.8%77.4%63.5%54.5%47.4%
Professional, scientific and technical93.1%78.3%64.2%54.8%46.9%
Arts, entertainment, recreation and other services91.4%73.6%60.0%51.6%45.2%
Property78.6%62.8%54.1%48.4%44.0%
Production89.9%71.4%57.6%49.4%43.5%
Motor trades92.1%72.8%57.5%49.2%43.2%
Finance and insurance (Excl 6420)85.4%68.8%57.3%49.6%43.1%
Construction90.3%71.2%57.4%49.3%42.9%
Transport and storage (inc. postal)91.8%73.1%56.7%47.8%41.3%
Retail92.3%72.8%57.0%47.8%40.9%
Business administration and support services90.3%72.3%56.5%46.9%37.7%
Wholesale90.8%67.3%50.7%41.9%35.8%
Accommodation and food services92.6%72.5%54.1%42.6%34.2%
Average91.3%73.9%59.4%50.4%43.2%

How UK Regions Compare

The region with the best 5-year survival rate for new startups is the South West. Interestingly, the South West only has the 5th best 1-year survival rate—but companies that make it past that first year have the best odds of getting through 5 years without failing. The East and East Midlands have the 2nd and 3rd best 5-year survival rates.

chart showing 5-year survival rates for startups in each region of the United Kingdom

Those starting a new company in London have the worst odds of success, with only 39.3% of startups making it through the 5th year intact.

Regions Ranked by 5-Year Survival Rates1 Year2 Years3 Years4 Years5 Years
1South West92.1%73.4%63.4%53.9%45.8%
2East93.6%73.5%63.0%53.3%45.4%
3East Midlands92.7%74.4%61.6%51.8%44.9%
4South East91.6%73.0%63.6%53.4%44.8%
5Northern Ireland88.5%69.8%58.1%49.4%44.7%
6West Midlands92.3%72.7%61.8%51.6%44.4%
7Wales91.8%71.1%60.0%50.6%44.0%
8Yorkshire and The Humber*91.7%71.8%62.0%51.9%43.9%
9Scotland91.7%71.3%60.4%51.3%43.7%
10North East92.4%71.6%59.6%49.9%43.6%
11North West91.7%70.8%60.9%50.8%42.9%
12London89.8%68.1%58.9%48.1%39.3%
Average91.5%71.3%61.2%51.2%43.2%

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