The Covid-19 pandemic has been one of the most significant events of the last 70 years, eliciting a global response and a seismic shift in the business community.
For businesses that began life in the pandemic, their founders often faced a ‘now or never’ moment with many using the pandemic as an opportunity to reassess their priorities and focus on long-standing ambitions to start a business while others were forced to pivot their work and livelihoods.
Some 800,000 companies were registered in the first year of the pandemic, a 22% increase compared with the previous year. CBI Economics analysis, commissioned by NatWest, found that if all of these new businesses were equipped with the tools to grow and succeed, £20.4bn could be added to the UK economy. Harnessing this potential will require a clear understanding of the characteristics of these founders and the challenges they face in the months ahead.
To gain greater insights about the little-known experience of pandemic-born firms, CBI Economics surveyed 543 businesses from across the UK. Key findings include:
- Only 13% cited regulation as a challenge when starting their business
- Access to finance was a key concern for many burgeoning business leaders, with 55% highlighting this post 2020, compared with 42% pre-COVID
- 4 in 5 firms report no plans to wind down their business
- Pandemic-born businesses are more likely to say it is important to adopt the newest technologies compared to their pre-pandemic counterparts (56% versus 71%)
- Pandemic-born businesses are 20% more likely to use both sustainable materials and suppliers, compared with firms established prior 2020.
Most importantly, 80% of this ‘Generation Covid’ of start-ups intend to continue trading in the months ahead. Although these businesses have great ambitions for growth and innovation, the current economic landscape could jeopardise their success. An increase in the cost of materials or delays across their supply chains could stall the growth of their business operations or the delivery of new products.
Fostering a culture of growth and innovation in this new cohort of pandemic-born businesses will be key to the UK’s success on the world stage, and a post-pandemic recovery.