Ulster University: Business birth rate on the rise, but north remains ‘least dynamic part of the UK'
NORTHERN Ireland remains the least dynamic part of the UK when it comes to new businesses entering the market, analysis from Ulster University suggests.
The institution’s Economic Policy Centre (EPC) made the conclusion after assessing business births and deaths over a decade.
Between 2010-2021, business ‘births’ in the north rose by 45 per cent, reaching 6,655 in 2021, the highest in over the decade.
But that compared to an increase of 55 per cent across the UK over the same period.
And while the business ‘death’ rate here has fallen, Ulster University’s EPC said the north's business ‘churn’ rate, lags well behind the UK.
Churn is measured as the business birth rate plus the death rate. Between 2010 and 2021, it rose from 16.6 per cent to 18.3 per cent in the north.
The UK rate in 2021 stood at 23.5 per cent.
The EPC’s researchers said the combination of a lower business birth rate and a lower business death rate indicates that Northern Ireland’s economy is less dynamic than other regions of the UK.
The study also found that the highest business birth rates in the north were in sectors with low productivity levels.
The sector with highest birth rate in 2021 and the fastest growth in births over the decade was ‘transport and storage’. The report said it had the lowest productivity levels of business births.
The largest number of business births and deaths annually was recorded in the construction sector while the lowest has been largely in the education sector.
UUEPC economist Karien Bonner said: “In order to boost overall economic performance and narrow the gap between business dynamism rates here and the UK, Northern Ireland needs to refocus on facilitating more highly productive firm entrants, with a capacity for innovation and growth.
“Ensuring adequate access to both financial capital and human capital in terms of a skilled pipeline of individuals in high productivity sectors is crucial.
“For productivity improvements from business start-ups to be sustained, capacity for growth by way of access to skilled employees and funding will be necessary to ensure that those that survive are the most productive.”