New research indicates that Wales could be struggling with entrepreneurship after figures show that it is the region with the fewest new start-ups since the EU referendum.
The UK Start-up Index, launched by credit check specialist Creditsafe, reveals which regions have suffered and which have benefited since the referendum result was announced in June 2016. Wales came in at the bottom of the table with an 18% decrease in new businesses from May 2016-April 2019, while the West Midlands saw a 21% increase over the same period.
Wales recorded 22,415 start-ups from May 2016-April 2017, dropping to 18,255 in 2018-2019.
Scotland and the South West were the only other regions to see a decrease, at 3% and 0.59% respectively.
Creditsafe also gathered data on the number of insolvencies and found Wales to have had a 66% increase in insolvencies over the past three years. It sits in the middle of the table, with Northern Ireland recorded as the region with the most insolvencies (up 114%), and the West Midlands as the region with the fewest (10.3%).
Ian Price, CBI Wales Director said:
“New data from Creditsafe is always hugely instructive and gives great insight into business conditions on the ground. Unfortunately the findings make disappointing reading for Wales, with it seemingly lagging behind other regions and nations.
“There’s a clear need to understand why these statistics suggest that entrepreneurship in Wales in Wales is stalling and how we can learn positive lessons from those parts of the UK that seem to be in a stronger position.
“We also need to check that Brexit is not having a more negative affect on Wales than on other UK regions. A better understanding of the regional impact of Brexit uncertainty could be crucial, particularly as we continue to face the unappetising prospect of no deal and with so many questions left unresolved.”
Comparing the total number of start-ups in each region from in 2016/17 and 2018/19, the percentage increases/decreases were as follows:
- West Midlands – 21.24%
- Greater London – 13.42%
- Northern Ireland – 13.08%
- North East – 9.99%
- Yorkshire and Humberside – 8.14%
- East Midlands – 5.92%
- North West – 3.98%
- South East – 2.33%
- East Anglia – 2.09%
- South West – 0.59% (-)
- Scotland – 3.25% (-)
- Wales – 18.56% (-)
Professor Roger Awan-Scully, head of Politics and International Relations at Cardiff University, said:
“We know that Wales is particularly exposed to the economic downside risks of Brexit, and this important new data suggests that it may already be suffering negative consequences. Given that Wales was already one of the economically weakest parts of the UK, this news is very worrying indeed for the future”.
Chris Robertson, CEO at Creditsafe, commented:
“It’s a real shame that Wales has seen an 18% drop in start-ups since Brexit was announced; while two other regions suffered a decrease the disparity between Scotland and Wales is quite alarming.
“Though there could be other factors at play, it seems fair to say that Wales has been hit the hardest by Brexit. While other regions are defying the uncertainty and riding out the storm, budding entrepreneurs in Wales remain cautious – perhaps waiting to see whether a no-deal Brexit will go ahead, and the implications that will have.
“With one in 10 shops now empty we can only hope that economic stability resumes sooner rather than later, and with that the confidence for more people to start their own business.”