Can the same be said for the health of entrepreneurship in 2020/21?

At a time when entrepreneurial activity could hold the key to transforming the global economy and creating sustainable jobs, the UK version of the Global Entrepreneurship Monitor for 2020, authored by Professor Mark Hart and his team at Aston University and supported by NatWest, is essential reading. The report is full of insight and data for anyone wanting to understand the attitudes, activity and aspirations of those starting and managing a business.

Professor Hart says: “The GEM survey undertaken in the last few months of 2020 by my team 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. This is hardly surprising but the analysis has also shown that the entrepreneurial foundations of the economy and society are still strong and these will be crucial for the recovery.”

Entrepreneurs are by nature good at spotting opportunities and, in turn, resilient in riding out bad times. The share of those agreeing that starting a business would be a good career choice in 2020 jumped significantly, for example. And some entrepreneurs added that new opportunities have arisen because of the pandemic. But 53% felt that fear of failure would prevent them from starting a business (an increase from the 46% in 2019).

Andrew Harrison, Managing Director, Business Banking, at NatWest, says: “GEM is the most authoritative annual research into entrepreneurial activity and trends. It’s no surprise that the report shows total entrepreneurial activity in the UK dropped to below 2018 levels, from 9.9% in 2019 to 7.5%.

“This was undoubtedly due to the pandemic, but the good news is that more people expressed the intention of starting a business in 2020 than in previous years, from 11% in 2019 to 16.2%, which shows confidence in the economic recovery. 

“We need to continue to build back better and ensure that the small businesses forming the backbone of the UK economy receive the support they need to handle challenges such as cost pressures, staff shortages and gaps in their supply chain.”