UK Startup Statistics: Top Industries and Regions
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 construction, transport & storage and professional, scientific & technical businesses in terms of growth and number of births; but property and finance & insurance businesses have the best 5-year outlooks.
Birth Rates by Industry
There were more construction startups born in the UK in 2022 than any other industry: 49,390. Next, there were 47,445 professional, scientific and technical companies formed in 2022, followed by 36,460 new transport and storage (inc. postal) companies.
These numbers may seem large, but the number of UK startups has dropped in recent years. In 2022, 336,925 new companies were formed in the UK, a decrease of 5.6% compared to five years earlier.
The industries with the biggest increase in birth growth were transport and storage (51% increase over five years), wholesale (+16%, excl motor) and real estate (+10%).
| Industry | 2022 Births | 5-Year Change in Birth |
|---|---|---|
| Construction | 49,390 | -4% |
| Professional, scientific and technical | 47,445 | -25% |
| Transport and storage (inc. postal) | 36,460 | 51% |
| Retail (excl motor) | 29,420 | -1% |
| Accommodation and food services | 28,550 | 6% |
| Public admin and defence | 25,595 | -12% |
| Information and communication | 22,455 | -25% |
| Business administration and support services | 14,375 | -22% |
| Manufacturing | 13,660 | -5% |
| Real estate | 11,825 | 10% |
| Other service activities | 11,185 | 10% |
| Health | 10,890 | -5% |
| Wholesale (excl motor) | 10,760 | 16% |
| Arts, entertainment and recreation | 7,905 | 0% |
| Motor trades | 7,575 | -7% |
| Education | 5,000 | -8% |
| Finance and insurance | 2,775 | -38% |
| Water supply, sewerage, waste management | 1,020 | 5% |
| Electricity, gas, steam and air conditioning supply | 520 | -31% |
| Agriculture, forestry and fishing | 120 | -23% |
Survival Rates by Industry
The most recent 5-year survival rate for UK startups is 39.6%. That means nearly two thirds of all startups fail within 5 years. However, the data shows that survival rates are very different from one industry to the next industry.
For example, in recent years, property-related startups have had the best survival rates in the UK, with 55.9% of new ventures making it through their 5th year. Finance and insurance startups were the next most successful in terms of longevity, with a 49% 5-year survival rate.
While transport & storage has seen the largest amount of startup growth (51% more new companies compared to five years ago), this industry has the worst survival rates, with only 24% making it to year 5; the other 76% fail within five years. Business admin and support services have also done poorly, with only 30.6% surviving a full 5 years.
| Industry | 1-Year Survival Rate | 2-Year Survival Rate | 3-Year Survival Rate | 4-Year Survival Rate | 5-Year Survival Rate |
|---|---|---|---|---|---|
| Property | 95.7% | 80.2% | 67.9% | 60.4% | 55.9% |
| Finance and insurance (Excl 6420) | 92.1% | 76.7% | 65.3% | 55.6% | 49.0% |
| Arts, entertainment, recreation and other services | 95.6% | 77.3% | 63.0% | 54.5% | 48.9% |
| Motor trades | 94.5% | 74.9% | 58.8% | 50.6% | 46.3% |
| Education | 84.1% | 69.2% | 57.4% | 50.5% | 45.1% |
| Health | 88.4% | 66.7% | 56.3% | 49.5% | 44.7% |
| Production | 94.7% | 75.9% | 59.0% | 50.2% | 44.2% |
| Construction | 93.4% | 74.2% | 58.4% | 48.6% | 43.1% |
| Wholesale | 94.5% | 73.4% | 54.7% | 46.3% | 41.7% |
| Professional, scientific and technical | 94.9% | 76.6% | 61.0% | 49.8% | 40.9% |
| Information and communication | 95.8% | 79.2% | 63.4% | 50.9% | 40.1% |
| Accommodation and food services | 94.7% | 73.1% | 53.8% | 43.5% | 38.2% |
| Retail | 94.3% | 73.5% | 52.2% | 41.3% | 37.8% |
| Business administration and support services | 92.3% | 62.9% | 45.8% | 36.3% | 30.6% |
| Transport and storage (inc. postal) | 91.2% | 64.5% | 42.5% | 29.7% | 24.0% |
| Average | 93.7% | 72.9% | 56.1% | 46.0% | 39.6% |
How UK Regions Compare
The region with the best 5-year survival rate for new startups is now Northern Ireland! The best region was previously the South West, which now ranks 2nd. Interestingly, Northern Ireland has the worst 1-year survival rate (91.2%)—but companies that make it past that first year have the best odds of getting through 5 years without failing.
Those starting a new company in the North West have the worst odds of success, with only 31.6% of startups making it through the 5th year intact.
| Regions Ranked by 5-Year Survival Rates | 1 Year | 2 Years | 3 Years | 4 Years | 5 Years | |
|---|---|---|---|---|---|---|
| 1 | Northern Ireland | 91.2% | 75.0% | 62.3% | 54.6% | 49.0% |
| 2 | South West | 91.4% | 74.8% | 60.4% | 51.3% | 45.0% |
| 3 | South East | 94.4% | 76.9% | 61.4% | 51.2% | 43.9% |
| 4 | Yorkshire and The Humber | 93.4% | 74.5% | 59.0% | 49.9% | 43.5% |
| 5 | East Midlands | 94.2% | 73.5% | 57.0% | 47.7% | 41.3% |
| 6 | Scotland | 93.9% | 74.9% | 58.5% | 48.5% | 40.5% |
| 7 | North East | 93.7% | 74.0% | 55.2% | 45.5% | 39.5% |
| 8 | London | 93.8% | 72.7% | 55.9% | 45.8% | 39.2% |
| 9 | East | 94.0% | 76.9% | 57.8% | 45.2% | 39.2% |
| 10 | Wales | 93.8% | 75.2% | 55.8% | 43.2% | 37.2% |
| 11 | West Midlands | 94.4% | 64.7% | 48.7% | 40.7% | 35.2% |
| 12 | North West | 93.6% | 66.6% | 48.1% | 36.9% | 31.6% |
| Average | 93.7% | 72.9% | 56.1% | 46.0% | 39.6% | |