It looks like interest rates will rise in the UK and EU zone as govt debt levels rise rapidly, big companies announce layoffs and the Ukraine conflict drags on as both sides try to save face after spending billions on a stalemate via drone tech. Then there’s Iran and Hormuz. So for insurers looking to help start ups grow with Commercial and BI cover, how are things looking? 1st Formations has some analysis;
New analysis of 108,851 company incorporations between 2024 and 2025 by leading company formation agent 1st Formations has revealed a fundamental shift in the UK’s entrepreneurial landscape.
The analysis looks at which sectors have seen a shift in new company incorporations, uncovering a hidden ‘industrial renaissance’, spearheaded by high-growth niche sectors.
The data shows that while overall incorporations fell by seven per cent year-on-year in 2025, with traditional retail and hospitality facing particularly strong headwinds, UK entrepreneurs are increasingly launching businesses in industries that are playing an active role in innovation, advanced manufacturing, sustainability, and emerging technologies – aligning with long-term structural demand and government-backed growth strategies.
The data highlights strong year-on-year growth between 2024 and 2025 across several specialist sectors, including fishing and aquaculture (78%), the manufacture of chemicals and chemical products (67%), the manufacture of rubber and plastic products (59%), and insurance, reinsurance, and pension funding (54%).
Together, these trends point towards what 1st Formations describes as ‘a new era of specialist entrepreneurship’, with founders focusing on sectors that support long-term economic resilience, technological innovation, and evolving market demand.
Graeme Donnelly, founder and CEO at 1st Formations, said: “While overall registrations have dipped, the data suggests founders are becoming increasingly strategic about where they invest their time and resources.
“Entrepreneurs are gravitating towards sectors that support the UK’s future economy, whether that’s through strengthening supply chains, supporting sustainability goals, or developing specialist services for emerging markets. Rather than a slowdown in entrepreneurship, we’re seeing a shift towards more targeted and opportunity-driven business creation.”
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Sector
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YoY growth 2024-2025
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Fishing and aquaculture
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78%
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Manufacture of chemicals and chemical products
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67%
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Manufacture of rubber and plastic products
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59%
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Insurance, reinsurance, and pension funding
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54%
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The four sectors with the highest year-on-year growth between 2024 and 2025
Alongside this, the information and communication sector grew by nine per cent year-on-year, outperforming the national average of 7 per cent and reinforcing its position as a cornerstone of the UK’s startup ecosystem.
Analysis of company names reveals a notable rise in the use of the term ‘AI’, increasing from 153 in 2024 to 301 in 2025, almost doubling year-on-year. This indicates a growing shift towards AI-focused products and services, the rise of agentic AI, or AI branding among businesses.
This growth is being further supported by government backing, with recent Budget measures focused on helping tech firms to start up, scale up, and remain in the UK through expanded funding, AI adoption programmes, and continued research and development incentives.
Graeme added: “Together, these trends highlight a dual-track evolution in UK entrepreneurship. On the one hand, there’s rapid growth in deep tech and digital innovation. On the other, there’s a renewed focus on foundational industries, such as fishing and chemicals, which underpin the infrastructure required for future technologies to scale.
“With increasing numbers of entrepreneurs launching AI-driven businesses and entering specialist industrial sectors, this could mark the start of a longer trend toward the specialised startup. Founders are becoming more focused, more strategic, and more willing to build expertise in niche markets.”
For more support on starting and running a business, see this useful Resource Hub on forming and growing a company.
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