Starting a business can be a daunting and challenging experience, but keeping the momentum going can be even harder. There are many factors to consider, such as outgoings and turnover, when it comes to building a successful business.
However, one prominent factor that can affect business success is where you establish it and in what sector. Small Business Prices has researched various metrics, such as industry growth, business death rate and expected revenue, to reveal the best countries across the globe to establish a business within if you want it to be successful.
The United States Is the Best Country To Set Up a Business
|Rank||Country||Business Survival Rate %||Number of New Registered Businesses (per year)||Gross Domestic Spending on Research and Development per year (million £)|
We’ve looked at 43 countries across the world and analysed various metrics to compile a list of the top 10 best, and worst, countries for starting a business within if you want it to be successful.
The United States and United Kingdom take spots one and two respectively. Both countries have over 650,000 registered businesses (the USA has 733,825 and the UK 664,974). However, they differ massively on how much they spend on research and development. The USA spends just under half a billion on elevating businesses across their country, whereas the UK spends a considerably lower amount of £38,315 million.
It should be noted that gross domestic spend on research and development doesn’t always equate to business success. In Mexico just over $5 million is pumped into businesses, a mere sum in comparison to that spent in the USA. Regardless of the difference in spend, Mexico ranks only 8 places lower than the number one country, with 83,903 businesses. This could be due to Mexico’s existing skills and infrastructure that make it an attractive country for businesses. International companies; HP, Coca-Cola and Intel all manufacture their products in Mexico.
Iceland Has the Least Amount of Registered Businesses
Rank Country Business Survival Rate % Number of Registered Businesses Gross Domestic Spending on Research and Development (million £)
1 Iceland 76.3 2,283 333
2 Austria 86.38 3,830 10,858
3 Canada 60 4,065 20,426
4 Slovenia 85.87 4,182 1,153
5 Malta 86.08 5,527 N/A
6 Lithuania 63.5 6,072 716
7 Luxembourg 89.62 7,309 557
8 Costa Rica N/A 8,984 N/A
9 Greece 96.86 9,793 2,847
10 Latvia 74.96 9,864 263
Taking last place, as the worst country to set up a business, is Iceland. The Scandinavian country has an overall business survival rate of 76.3%, and the total number of registered businesses sits at 2,283. This is a considerable reduction in comparison to the top ten countries. The difference in how populated the countries are could be a playing factor; the population for the second-place best country (UK) is 9,425,622 whereas Iceland sits close to just over half a million, with 590,335 residents.
Iceland also has the second least amount of money spent on research and development for businesses, with only £333 million being spent across the country. Latvia, a country situated in the north east of Europe, took the top spot of this unfortunate variable – spending just £263 million on researching and developing their citizens’ businesses.
The Most Successful Businesses in the UK are Within the Scientific and Technical Industries
|Rank||Industry||Active Companies in UK (in thousand)||Company Births in UK (in thousand)||Company Deaths in UK (in thousand)|
|1||Professional, Scientific and Technical||544||66||60|
|3||Business Administration and Support Services||304||59||45|
|4||Information and Communication||263||32||28|
If you are looking to have a successful, thriving business within the United Kingdom then you should consider setting up a business in the professional, scientific and technical industry. Examples of businesses within this sector include; legal advice, engineering, architectural, medical and veterinary establishments.
There are 544,000 active businesses within this industry in the UK, with the birth rate sitting at 66,000 and the deaths at 60,000. Although businesses within the professional, scientific and technical industry are the most successful, jobs within this sector require a high level of training and expertise in order to work within them.
The second most successful industry in the UK is construction, with 402,000 active businesses. Although this is nearly 150,000 less than the professional, scientific and industrial industry, the death rate is considerably less. For construction businesses the death rate sits at 42,000. This reduced number of business deaths could be down to the increased demand for new housing, offices and overall industrialisation that the UK is under.
Businesses Within the Education Industry are the Least Viable in the UK
Rank Industry Active Companies in UK (in thousand) Company Births in UK (in thousand) Company Deaths in UK (in thousand)
1 Education 46 5 5
2 Finance and Insurance 48 6 5
3 Motor Trades 85 8 8
4 Health 114 10 9
5 Wholesale 116 10 11
Taking bottom place as the worst industry to set up a business within in the UK is the Education industry. There are just 46,000 active establishments within this sector, however the birth, and death rate of such businesses both sit at 5,000 showing that for every new business in this industry, another is likely to fail or shut down. Although this is not a thriving industry, it is one of the most consistent within the UK.
Following closely behind, and being the second least successful industry in the UK is the finance and insurance industry. With only 2,000 more businesses than the education sector, and showcasing a total active number of 48,000, this is another industry you should reconsider establishing a business within if you want it to thrive. However, it should be considered that 1,000 more businesses are birthed within this sector than in education, so it could be an industry that will become successful in years to come.
Globally, Businesses Within the Biotech Industry Are Expected to Be the Most Successful
Rank Industry Number of Firms Established Jan 2021 (globally) Expected Growth in Revenue in the Next 2 Years (%)
1 Drugs (Biotechnology) 547 144.01
2 Banks (Regional) 598 5.71
3 Drugs (Pharmaceutical) 287 140.37
4 Software (System & Application) 388 25.08
5 Oil/Gas (Production And Exploration) 278 -7.24
6 Investments & Asset Management 348 4.77
7 Healthcare Products 265 52.62
8 Real Estate Investment Trust 238 2.2
9 Financial Services. (Non-Bank & Insurance) 235 4.82
10 Electronics (General) 157 26.91
If you do set up your business within the United Kingdom, your end goal will probably be for it to have global success. So which industries are currently thriving at a global level?
The most successful industry worldwide as of January 2021 is that of the biotechnological drug industry. 547 firms were established within this industry at the beginning of the year, showing that entrepreneurs clearly saw a huge gap in this market. Although this industry requires a lot of training, understanding and education, entrepreneurs have failed to be put off venturing into this market.
Biotech is also expected to see the most expected growth revenue within the next 2 years, with an influx of 144.01%. Both drug industries (biotechnical and pharmaceutical) surpass all the other industries expected growth by a huge percentage. The outbreak of COVID-19, and the desperate need for the world to find vaccinations and medical treatments is most likely the causing factor of this.
COVID-19 can also be to blame for the expected decline in growth of the airport transport world. Within the next two years this industry is expected to see a decline in revenue of -16.03%. With countries consistently being placed under new social and travel restrictions, people’s need for air travel have been considerably reduced, and won’t return to normal for a few years.
Based on this data, if you are wanting to start a business that will flourish, and continue to succeed in years to come, then embarking into the drug (biotechnological) industry is the best route to go.
From all our research, and analysis of data, if you are wanting to give your business the best chance to succeed, and thrive then you should be aiming to establish your company within the United States or United Kingdom. You should also consider embarking into the professional, scientific and technical industry -more specifically into the biotechnical sector of drug research.
Methodology and Sources
We compiled the data through researching the most up to date metrics associated with countries and businesses. We looked into each country, and how their overall businesses do. We then focussed on industries, and how successful they are not only just within the United Kingdom, but also globally.