Fall in start-up since start of recession

The number of new businesses being set up around the world has fallen as a result of the recession, according to new figures from Global Entrepreneurship Monitor (GEM).

The report shows that the number of start-ups was down by 10 per cent last year in 20 of the world’s wealthiest nations.

The UK came off relatively well with only a 6 per cent fall in new businesses being registered while the US saw a huge 24 per cent drop.

The GEM reports are based on interviews with 180,000 people in 54 countries. One of the founders of GEM, Professor Bill Bygrave of Babson College in the US, said entrepreneurs were finding it more difficult to get financial support for their start-ups: "Throughout the world, would-be entrepreneurs reported greater difficulty in obtaining financial backing for their start-up activities, especially from informal investors - families, friends, and strangers.”

He explained that the pool of money available to start-ups has fallen from $400 billion to $350 billion – representing a 12.5 per cent drop across the globe.

Funding for people looking to start a firm or indeed buy a business is expected to increase as countries slowly emerge from the recession.

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