Uptick in digitally focussed start-ups

It’s not surprising to hear of an increase in the number of new start-ups formed during or immediately following a downturn in economic activity. However, recent research suggests that the 2021 figures were higher than some may have expected and the growth appears to be driven by the use of digital and remote platforms.

Natural response to a downturn

The turbulence caused to the global economy as a result of the pandemic, the war in Ukraine and the fluctuations in output and underlying costs, continues to plague national economies affecting and undermining long term corporate confidence. Whenever similar circumstances have happened in the past, the number of start-ups tends to rise as individuals that find themselves out of work replace their salary income through contracting and/or starting out on their own. It is a cyclical process that sees more people registering as sole traders and/or incorporating limited companies and partnerships when employers are not hiring or the right jobs do not exist in the economy.

Digital and home working make the difference

The recent research by accounting software provider Intuit QuickBooks, not only shows that the number of start-ups was up 14% in 2021, but also suggests that as many as three million people in the UK may be considering starting a company. Indications are that the uptick in new start-ups is linked to the change in working styles, with more people able to start and run a business from home due to the increase in availability of digital platforms.

The ability to work remotely, more flexibility in working hours and more tools to help people get set up and start trading creates a perfect opportunity for would-be entrepreneurs that may have previously shied away from going it alone. Those who maintained their employment status but are now being encouraged to return to the office and the old way of doing things, after enjoying a different style of work, may be fuelling that three million figure as they weigh up their options.

Free and low cost applications such as virtual meeting platforms, Google suite, accounting software and multi-channel ecommerce tools mean that the cost of entry for new participants is low, removing one of the key hurdles. A more relaxed business atmosphere with meetings taking place virtually and less stigma around working from home also makes starting up seem easier breaking down the barriers and protocols of yesteryear.