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

1-minute read

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

Mark James

16 March 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...

RankSectorExamples of sub-sectors
1Rental and leasing activitiesRental and leasing of cars and light motor vehicles, rental and leasing of intellectual property
2Other professional, scientific and technical activitiesEnvironmental consulting activities, specialised design activities
3Activities of head offices; management consultancy activitiesPublic relations and communications activities, financial management activities
4Architectural and engineering activities; technical testing and analysisTechnical testing and analysis, engineering design activities
5Office administrative, office support and other business support activitiesActivities of call centres, photocopying, document preparation and other specialised office support activities
6Publishing activitiesPublishing of computer games, other software publishing, book publishing
7Manufacture of computer, electronic and optical productsManufacture of electronic components
8Computer programming, consultancy and related activitiesBusiness and domestic software development, information technology consultancy activities
9Manufacture of beveragesDistilling, rectifying and blending of spirits, manufacture of beer
10Scientific research and developmentResearch 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…

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