Originally written by Timothy Adler on Small Business
The number of new company launches in the UK fell 25 per cent on average between January and May as COVID-19 swept through Britain.
The biggest fall of 40 per cent was during the four weeks following lockdown on March 23, according to a new Economics Observatory report.
The figures are important because new bussinesses are the engine room of the economy, employing more young people whose job prospects have been worse hit by the virus.
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In America, where the data is more complete, an average 16.3m jobs are created and 14.9m jobs are destroyed each year. This means that annually a third of all US jobs are either new or destroyed.
However, start-ups in the US create 2.9m more jobs than they destroy each year, so microbusinesses are large contributors to job creation. In addition, it is start-ups which are often the most productive when it comes to lifting aggregate productivity growth.
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The good news is that since May’s reopening, UK registrations have bounced back, with Economics Observatory suggesting just 7,100 fewer