What are the best and worst industries for startups in 2016?

We run through the winners and losers, according to recent research conducted by O2 Business and the Centre of Economic and Business Research.

Rise of the sharing economy

Leading the way in terms of startup opportunity are rental and leasing businesses, such as those based on similar models to Uber and Airbnb. These types of startups boasted the best turnover, productivity and employment statistics - providing a clear vindication of the so-called ‘sharing economy’.

Familiar businesses also faring well

Elsewhere, professional services, architecture and engineering all appear in good health, startups within these sectors surviving and thriving according to the research.

Book publishing still appears to be lucrative, as does the manufacturing of beverages, the nation’s growing taste for craft beer meaning that thousands of microbreweries are springing up and proving profitable. PR startups are performing well too, according to the research. Take a look at the top 10 in full, and see if your business is amongst them…

Rank Sector Examples of sub-sectors
1 Rental and leasing activities Rental and leasing of cars and light motor vehicles, rental and leasing of intellectual property
2 Other professional, scientific and technical activities Environmental consulting activities, specialised design activities
3 Activities of head offices; management consultancy activities Public relations and communications activities, financial management activities
4 Architectural and engineering activities; technical testing and analysis Technical testing and analysis, engineering design activities
5 Office administrative, office support and other business support activities Activities of call centres, photocopying, document preparation and other specialised office support activities
6 Publishing activities Publishing of computer games, other software publishing, book publishing
7 Manufacture of computer, electronic and optical products Manufacture of electronic components
8 Computer programming, consultancy and related activities Business and domestic software development, information technology consultancy activities
9 Manufacture of beverages Distilling, rectifying and blending of spirits, manufacture of beer
10 Scientific research and development Research and experiential development on biotechnology, other research and experiential development on natural sciences and engineering

Enough of the winners though, which startups are having a tougher time?

So much for the special relationship…

The UK’s entertainment startups are struggling the most according to the report, a mass of media companies failing in the face of fierce American competition. Motion picture, video and television programme production and sound recording have all been hit, as has Britain’s once buoyant music publishing industry.

A digital downfall?

Looking through the rest of the startup strugglers it’s clear that digital forces are also at play, traditional retail, printing and postal activities all facing disruption from technology. Manufacturing appears to be in trouble too - perhaps more thanks to competition from abroad - but we wouldn’t bet against 3D printing bringing yet more upheaval.

Take a look at the 10 most struggling industries in the table below…

Rank Sector Examples of sub-sectors
1 Motion picture, video and television programme production, sound recording and music publishing activities Motion picture production activities, video production activities, television programme distribution activities
2 Other manufacturing Manufacture of sports equipment, manufacture of medical instruments
3 Postal and courier activities Postal activities under universal service obligation, licensed carriers
4 Water transport Inland freight water transport, sea and coastal passenger transport
5 Manufacture of wood and of products of wood and cork, except furniture; manufacture of articles of straw and plating materials Manufacture of wooden containers, manufacture of other builders’ carpentry and joinery
6 Retail trade, except of motor vehicles and motorcycles Retail sale of books, games and music recordings in specialised stores
7 Manufacture of chemicals and chemical products Fertilisers and plastics in primary forms
8 Manufacture of basic metals Copper production, aluminium production
9 Printing and reproduction of recorded media Printing of newspapers, binding and related services
10 Programing and broadcasting activities Radio broadcasting

Does your business fit into either list? Does the research ring true? Tell us your thoughts in the comments section below

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