Growth in the number of businesses in the US has been outpaced by many other economies around the world in the last year, reveals a new study by UHY, the international accounting and consultancy network.
According to UHY, there has been a two percent increase in US business starts in the last year. There were 11 million businesses in total in the US in 2016 compared to 10.8 million in 2015 (see table below).
In comparison, overall across all countries in the study (21), business numbers in 2016 increased by 8% on the previous year.
UHY points out that major advanced economies with already large numbers of businesses, such as the US, can often find it difficult to add to their stock, whereas emerging economies may have more capacity to do so.
It adds that although economic conditions and levels of entrepreneurship are healthy in the US, securing investment can pose problems for small business success.
UHY explains that failing to provide adequate data when soliciting investors or not doing enough research on the competitive landscape are key obstacles to accessing vital investment funds.
The Top 5 rankings in the UHY table for growth in business numbers are dominated by emerging economies.
China topped the table, with a 19 percent increase in business numbers in the last year. There were over 26 million Chinese businesses in total in 2016 compared to almost 22 million in 2015. India is in fifth position with an annual increase of seven percent to 1.1 million businesses in 2016.
Of the Western economies* studied, the UK is first, coming 6th in the UHY table. Numbers of businesses in the UK increased by six percent in the last year, taking the total to 3.9 million.
Rick David of UHY member firm UHY Advisors comments: “Enterprise and entrepreneurship in the US is growing, but not at the same impressive speed that some rival economies are enjoying.”
“Like many developed economies where markets are already highly competitive, America does not have the same scope to grow new businesses at such rapid rates found in China and developing countries. However, ambition remains strong.”
“It is important to remember that the US is still the world’s leading economy. Recent actions by policymakers in the US to revamp the US corporate tax system should significantly impact the growth of future business creation across the country. We expect moves, such as this to dramatically impact the ability of the US economy to keep pace with other similar, high-performing Western economies like the UK.”
“With a good number of incubators and accelerators in operation to support the start-up ecosystem, innovation and entrepreneurship are robust – but we need to make sure that whether the right conditions to allow businesses to thrive are in place.”
“Start-ups and small businesses must maximise their chances of securing much-needed investment funding by making sure they do their homework thoroughly, if they are to flourish and grow.”
China tops table for pace of growth in business numbers – increasing total stock by almost a fifth in a year
*France, Germany, Italy, Japan, UK, United States
Notes on the figures (rounded to the nearest thousand):
Japan – 2015 figure is an estimate based on 2014 and 2016 figures; UK – figures have a year-end of 31 March 2016 and 2017, and are figures from UK’s Companies House on new incorporations and dissolved companies; Germany – 2016 figure is an estimate based on new registrations and de-registrations for 2016; Belgium – figures are for 2014 and 2015, the most up-to-date figures available; Vietnam – 2016 figure is an estimate based on annual growth rate 2010-15; Australia – Year end June 30 June 2015 and 2016; Pakistan – figures are for fiscal years 2015-16 and 2016-17 and measure the number of companies registered with the Securities and Exchange Commission of Pakistan (SECP).