Welsh economy hampered by a startling decline in start-ups

WALES is facing an entrepreneurial crisis and almost no-one is talking about it.

- DYLAN JONES-EVANS

New data from the Office for National Statistics should be ringing alarm bells across Cardiff Bay, local authorities, our universities and every organisation that claims to champion business growth.

Between 2021 and 2023, the number of new businesses created across Wales fell by almost 25%, which is nearly double the UK average decline of 13% and means that thousands of ideas that could have become employers, innovators and taxpayers never even got off the ground.

This poses an uncomfortable question for those in government and the agencies tasked with supporting entrepreneurs.

Where are the Welsh Government, Business Wales and, most of all, the Development Bank of Wales in all of this? These organisations were created and are generously funded by the public purse to support entrepreneurial activity. Yet on their watch, startup creation in Wales has fallen faster than anywhere else in the UK outside Northern Ireland.

The decline is sharpest in the Cardiff Capital Region, the part of Wales that should be leading national recovery. Between 2021 and 2023, 2,225 fewer businesses were created here, a fall of almost 29%. This is not simply a statistical blip but a massive contraction in the entrepreneurial capacity of the area that contains our capital city, or biggest concentration of businesses and our leading university.

And it comes despite more than £1bn in City Deal investment that was meant to stimulate innovation, build capacity and attract the next generation of high-growth firms.

To fully understand the scale of the problem, it helps to translate these lost startups into economic terms.