New research has found that start-ups that were launched in the 21st Century, known as Generation Z’ companies, have changed the shape of the business landscape and helped to drive economic growth.

According to research from Experian, the UK’s business population rose to 3.4 million by the end of last year, a considerable increase on the 1.5 million registered in 2000, with start-ups, which have few fixed assets and long-term liabilities, dominating the sectors experiencing the strongest growth.

Of the businesses that started since 2000, web firms account for 8.5 per cent, with the number of companies operating in this sector having increased by a whopping 237 per cent between then and last year. Meanwhile, the number of firms in the health space has increased from 6,993 in 2000 to 59,907 in 2014, while retail businesses have increased by 444 per cent over the same period.

Of the tech firms formed since 2000, almost half were started by individuals working from a small or home office. Of these, just 13 per cent have long-term liabilities on their first set of accounts, 1.2 per cent have bank loans and 1.4 per cent have an overdraft. Meanwhile, nine out of 10 were created with less than £10,000 worth of fixed assets, while 29 per cent of the assets held by these start-ups are in cash.

As Experian’s report points out, the business population has experienced two decades of almost uninterrupted growth, falling only in 2009 and 2010. A record 586,818 companies were set up in 2014, 27.5 per cent more than the 459,967 created in 2007 when the economy was at its peak. These start-ups accounted for 17.3 per cent of the business population last year.

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