- Early stage entrepreneurial activity increased sharply in Wales in 2021 compared to 2020
- This increase is due to the fact that new founders are continuing with their start-up plans that were postponed in the course of 2020
- The number of women starting new businesses rose sharply in 2021, while the number of older entrepreneurs doubled.
A new report from Aston University and NatWest, sponsored by the Welsh Government, has revealed that the Covid pandemic has created new opportunities for Welsh entrepreneurs in 2021.
The most recent Global Entrepreneurship Team (GEM) report, based on a sample of just over 10,000 people, found that almost one in three working-age people was either an entrepreneur or intended to start a business within the next three years.
GEM is the world’s largest entrepreneurship survey and the only global research source that collects entrepreneurship data directly from individual entrepreneurs. It measures various rates of entrepreneurship in 47 countries in 2021. It is sponsored by NatWest.
GEM’s UK team – led by Professor Mark Hart of Aston University – compared attitudes, activities and aspirations in the UK, Germany and the United States, as well as the UK’s four home countries. The early-stage entrepreneurial activity rate of 10.3% in Wales is statistically similar to the rest of the UK (11.5%), significantly higher than in Germany (6.9%) and France (7.7%) , but lower than in the US (16.5%).
Early-stage entrepreneurial activity in 2021 had surged compared to 2020 as the economy recovered after Covid lockdown restrictions were fully lifted on “Freedom Day” on July 19.
The report found that the increase was due to more than normal aspiring entrepreneurs – that is, individuals in the first three months of launching their new business – as many continued with their startup plans, which have been delayed in many aspects throughout 2020 The company was closed for a long time.
The number of women in Wales starting new businesses in 2021 has risen sharply – now nearly one in ten adult women is in the early stages of starting their own business, an all-time high.
Mark Hart, Professor of Small Business and Entrepreneurship at Aston Business School and Deputy Director of the UK Enterprise Research Centre, Said: “In 2020 we saw a collapse in early-stage entrepreneurial activity as many decided to delay their move to starting their own businesses in the face of the worst economic downturn in 300 years – but within 12 months it has bounced back.
“The GEM survey, conducted in mid-2021, showed a sharp increase in the number of people in the early stages of starting a new business compared to the pre-pandemic peak in 2019. It is now at the highest level since the survey began in 1999 and is an indicator of UK business resilience.
“The 2021 recovery has been fueled by more women than ever taking the steps to start their own businesses. In 2021 it will no longer be true that “women start their own business half as often as men”. It is now nearly three quarters across the UK, although there are significant differences between home countries, with Wales coming closest to parity at 92%.
“The more than doubling of early-stage entrepreneurship among older people can be explained by the ‘great resignation’ observed during the pandemic, as older people reassess their future economic activity and position in the labor market.
“It is important for the UK economy that the pandemic has not had a detrimental impact on the level of entrepreneurship among immigrants and ethnic minorities, which remains higher than that of lifelong residents and the non-ethnic population.
“However, the current energy crisis and projected impending recession means we must ensure that aspiring entrepreneurs have the support they need from all quarters to weather this next economic tsunami, which is already impacting many across Europe, with soaring insolvency rates Industry sectors.”
Andrew Harrison, Head of Business Banking NatWestsaid: “Against the challenging backdrop of the pandemic and cost of living crisis, the findings of this report reaffirm that Wales is a nation of entrepreneurs, with around one in three adults now either running a business or aspiring to start one.
“The resilience of small businesses over the last few years is both inspiring and important. With the economy facing significant turbulence in the coming year, it is vital that Wales and the rest of the UK have a thriving ecosystem to support this boom in entrepreneurship, which is central to economic stability and growth .
“As the UK’s largest corporate bank, we are committed to doing our part to ensure future business success stories begin, scale and thrive.”
The full GEM UK report, as well as individual reports for Wales, Scotland and Northern Ireland in collaboration with NatWest, Ulster Bank and RBS are available to download here.
