A NatWest report has highlighted that one in seven adults is intending to become an entrepreneur, an increase of 50% since 2019.
In partnership with various universities and business schools across the UK, the 2021 Global Entrepreneurship Monitor report collated the responses from interviews with over 9,400 adults between the ages of 18 and 80 across 43 economies.
Unsurprisingly, the GEM survey undertaken in the last few months of 2020 showed a sharp fall in the number of individuals in the early stages of setting up a new business compared to the pre-pandemic high in 2019.
But the analysis also highlighted that the entrepreneurial foundations of the economy were still robust, and that these foundations would be crucial for the recovery after the pandemic in the post-Brexit era.
Some of the key findings included:
- The share of those agreeing that starting a business would be a good career choice in 2020 jumped significantly, from 58% in 2019 to 74% in 2020.
- More people expressed the intention of starting a business in 2020 than in previous years. This number was 11% in 2019 and had jumped dramatically to 16.2% in 2020.
- Overall, one in four people of working age in the UK were involved in some type of entrepreneurial activity or intended to start a business within the next three years.
- Entrepreneurs seeking informal investment from friends and family had more than doubled to 6.6%, from a decade earlier
On the flip side
- 18% of people surveyed had quit their business due to the pandemic.
- Despite a fairly positive outlook, the number of existing entrepreneurs in the UK dropped by nearly 25% during 2020.
Andrew Harrison, head of business banking at NatWest Group commented, “The findings from this year’s GEM report present a mixed picture of the UK’s SME landscape, showing that whilst the pandemic has clearly had a detrimental impact on overall numbers of entrepreneurs, increasing numbers of young people are now planning to start their own business.”
“We are hopeful that this significant uptick in future intent, combined with an economy that has shown robust signs of recovery, suggest the worst of the downturn has now passed.
“There is a lot of work still to be done to address the gaps in the wider environment to ensure future entrepreneurs are given the best opportunity to thrive, and this report highlights where the public and private sectors can come together to make a real difference.”
The report also outlined the key areas where conditions needed to improve to give future UK entrepreneurs the best chance of success.
In need of improvement is entrepreneurial education at schools, followed by government entrepreneurship programmes, improved government policy on business support, and better sharing of research and development.