Scotland’s start-up surge as UK business population hits record 5.66 million

Scotland is leading the UK with the fastest growth in business start-ups, according to new research.

The latest New Start-up Index from NatWest/Royal Bank of Scotland and Beauhurst shows the UK’s active business population continues to grow as entrepreneurs adapt to changing consumer habits and technological advances.

A total of 402,000 new businesses were registered with Companies House in the first half of 2026. Although that was down 5.7 per cent on the total registered in the same period last year, entrepreneurial activity remained widespread across every region of the UK. The UK’s active business population has now reached a record 5.66 million companies. Some of these “start-ups” may be subsidiaries or offshoots of existing businesses.

The New Start-up Index is produced by NatWest Group in partnership with Beauhurst.

Scotland recorded the strongest growth in start-up activity, with incorporations rising about 3.7 per cent to 20,900, compared with the second half of 2025.

Technology businesses were a standout performer during the first half of the year, the report noted. Application software became the UK’s most active start-up category, with 28,100 new businesses incorporated. The wider digital and technology sector also recorded strong growth, reflecting continued innovation and investment in areas such as artificial intelligence (AI) and emerging technologies.

While incorporation volumes have adjusted compared with previous years, the data suggests regulatory reforms may be contributing to a higher-quality company register by reducing low-intent and fraudulent registrations.

Darren Pirie, head of accelerator and strategic partnerships at Royal Bank of Scotland, said: “The latest data shows UK entrepreneurship remains in good health. While start-up formation has moderated, more businesses are operating across the UK than ever before and founders continue to identify opportunities for growth, particularly in high-potential sectors such as technology and software.

“The strength of entrepreneurial activity across every region of the country underlines the important role new businesses play in supporting innovation, investment and local economic growth.”

Sebastian Burnside, chief economist for Royal Bank of Scotland, said the UK’s start-up economy was “adjusting” and not retreating.

“While incorporations eased in the first half of 2026, the active company base has continued to grow, showing the underlying resilience of UK entrepreneurs against a turbulent backdrop,” he said.

“The shift towards software and digital businesses is especially striking and speaks to the economy’s changing centre of gravity as technology transforms what we do and how we do it. This underlines the importance of backing the founders who are driving those opportunities wherever they are, connecting them to the right support, and helping turn ambition into long-term growth.”

Anisha Fernandes, founder of Glasgow-based cybersecurity pioneer Cyber Thistle, said: “Turning complex technology into a scalable product comes with unique funding and development challenges, but the strength of the local ecosystem, along with tailored support and a resilient network in Glasgow has been vital in helping us navigate that journey at Cyber Thistle.

“But also looking ahead, targeted investment and supportive policy in Scotland will be critical to empowering high-growth, technology-led businesses to scale internationally.”

The New Start-up Index is produced by NatWest Group in partnership with Beauhurst and analyses Companies House incorporation data across the UK.

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