According to a report by O2, not only are incubated and accelerated start-ups likely to secure significant financial investment – on average more than £68,000 once they have graduated – but the support and guidance they receive gives them an invaluable edge versus their competition.
Of those programmes able to quantify the number of start-ups still operating, the survival rate for start-ups reaches almost 92 per cent, compared to a two-year survival rate of 75.6 per cent for all small businesses.
The research examines the incubator and accelerator ecosystem as a whole, revealing a more than 110 per cent rise in the number of formal programmes operating over the past three years.
The report also reveals who is driving such rapid growth. Over 40 per cent of all the start-up programmes in the UK are currently privately run, with a third of these receiving backing from public sector organisations.
A further 12 per cent are owned by large corporate enterprises, with Telefónica, John Lewis, Barclays and Distill Ventures (Diageo) all launching their own programmes, while another 25 per cent are affiliated to educational organisations such as universities or business schools.
Almost two thirds of incubators and accelerators (61 per cent) are based in the capital – ten times more than the number outside it.
However, cities such as Birmingham and Edinburgh are both demonstrating promising growth as accelerator and incubator hubs, both at least doubling the number of programmes operating in the past two years to four and three respectively.
Wales and Northern Ireland have a number of dynamic new co-working spaces or business centres, but they are relatively underserved by accelerators or incubators.
Feilim Mackle, O2’s sales & service director says, ‘The rise in UK start-up programmes creates a unique opportunity for the entrepreneurs, but only if businesses and the government take responsibility for investing in these programmes to ensure they offer long-term, quality support. A loss in momentum could see some of the UK’s best entrepreneurial talent go to waste.’
Business minister Matthew Hancock adds, ‘With more than double the number of incubators and accelerators today than in 2011, the UK is fast becoming the best place in the world to start and grow a business.
‘From London’s Tech City to exciting new clusters in Birmingham, Edinburgh and Manchester, large companies and Government are coming together to help foster exciting new businesses. We are creating an environment where entrepreneurs can hone their ideas and thrive.’
Further reading on starting a business
