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 health, education, transport & storage, business admin & support and professional, scientific & technical.
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).
| Industry | 2016 Births | Birth Growth 2012 - 2016 |
|---|---|---|
| Professional, scientific and technical | 86,265 | 41% |
| Business administration and support services | 64,075 | 113% |
| Construction | 51,615 | 77% |
| Information and communication | 33,625 | 31% |
| Transport and storage (inc. postal) | 27,400 | 215% |
| Retail | 27,125 | 18% |
| Accommodation and food services | 25,875 | 28% |
| Production | 18,390 | 29% |
| Arts, entertainment, recreation and other services | 16,800 | 12% |
| Health | 16,500 | 93% |
| Property | 12,685 | 38% |
| Wholesale | 9,825 | -1% |
| Education | 9,475 | 174% |
| Motor trades | 8,550 | 35% |
| Finance and insurance (Excl 6420) | 5,695 | 28% |
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.
Accommodation and food service startups are the least likely to succeed, with only 34.2% 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 |
|---|---|---|---|---|---|
| Health | 93.5% | 81.7% | 70.6% | 62.0% | 55.0% |
| Education | 91.5% | 76.6% | 64.0% | 56.1% | 49.1% |
| Information and communication | 92.8% | 77.4% | 63.5% | 54.5% | 47.4% |
| Professional, scientific and technical | 93.1% | 78.3% | 64.2% | 54.8% | 46.9% |
| Arts, entertainment, recreation and other services | 91.4% | 73.6% | 60.0% | 51.6% | 45.2% |
| Property | 78.6% | 62.8% | 54.1% | 48.4% | 44.0% |
| Production | 89.9% | 71.4% | 57.6% | 49.4% | 43.5% |
| Motor trades | 92.1% | 72.8% | 57.5% | 49.2% | 43.2% |
| Finance and insurance (Excl 6420) | 85.4% | 68.8% | 57.3% | 49.6% | 43.1% |
| Construction | 90.3% | 71.2% | 57.4% | 49.3% | 42.9% |
| Transport and storage (inc. postal) | 91.8% | 73.1% | 56.7% | 47.8% | 41.3% |
| Retail | 92.3% | 72.8% | 57.0% | 47.8% | 40.9% |
| Business administration and support services | 90.3% | 72.3% | 56.5% | 46.9% | 37.7% |
| Wholesale | 90.8% | 67.3% | 50.7% | 41.9% | 35.8% |
| Accommodation and food services | 92.6% | 72.5% | 54.1% | 42.6% | 34.2% |
| Average | 91.3% | 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.
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 Rates | 1 Year | 2 Years | 3 Years | 4 Years | 5 Years | |
|---|---|---|---|---|---|---|
| 1 | South West | 92.1% | 73.4% | 63.4% | 53.9% | 45.8% |
| 2 | East | 93.6% | 73.5% | 63.0% | 53.3% | 45.4% |
| 3 | East Midlands | 92.7% | 74.4% | 61.6% | 51.8% | 44.9% |
| 4 | South East | 91.6% | 73.0% | 63.6% | 53.4% | 44.8% |
| 5 | Northern Ireland | 88.5% | 69.8% | 58.1% | 49.4% | 44.7% |
| 6 | West Midlands | 92.3% | 72.7% | 61.8% | 51.6% | 44.4% |
| 7 | Wales | 91.8% | 71.1% | 60.0% | 50.6% | 44.0% |
| 8 | Yorkshire and The Humber* | 91.7% | 71.8% | 62.0% | 51.9% | 43.9% |
| 9 | Scotland | 91.7% | 71.3% | 60.4% | 51.3% | 43.7% |
| 10 | North East | 92.4% | 71.6% | 59.6% | 49.9% | 43.6% |
| 11 | North West | 91.7% | 70.8% | 60.9% | 50.8% | 42.9% |
| 12 | London | 89.8% | 68.1% | 58.9% | 48.1% | 39.3% |
| Average | 91.5% | 71.3% | 61.2% | 51.2% | 43.2% |