UK entrepreneurs shift focus to “future-proofing” industrial and tech sector, new data shows
Startups Magazine Roshini Bains
UK founders are starting fewer companies overall, but more are going into AI, chemicals and aquaculture. That points to a shift from quick wins to niches tied to long-term demand.
Based on reporting by Startups Magazine, Roshini Bains — read the original for the full story.
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1st Formations looked at 108,851 UK company incorporations from 2024 to 2025 and found a notable change in what founders are building. Overall incorporations were down 7% in 2025, yet some specialist sectors were growing fast enough to suggest a different story underneath the headline number.
The strongest gains were in businesses that sit far from the usual startup clichés. Fishing and aquaculture rose 78% year on year. The manufacture of chemicals and chemical products climbed 67%, while the manufacture of rubber and plastic products increased 59%. Insurance, reinsurance and pension funding was up 54%.
That mix is what gives the report its edge. It suggests more founders are betting on sectors tied to supply chains, sustainability and long-term demand, while traditional retail and hospitality are having a tougher run. Graeme Donnelly, founder and CEO at 1st Formations, said the data points to founders being more strategic about where they put time and money.
The digital side is still moving too. The information and communication sector grew 9% year on year, beating the 7% national average. And company names containing AI almost doubled, rising from 153 in 2024 to 301 in 2025. The government is also backing tech firms with funding, AI adoption programmes and research and development incentives, which gives that trend some tailwind.
What 1st Formations sees is not a broad startup boom, but a split screen: more deep tech and digital work on one side, more foundational industry on the other. Donnelly argues that could be the start of a longer move toward specialised startups, built for narrow markets rather than broad hype.
My take — AI-written commentary, not fact-checked reporting
This is the rare startup trend that actually sounds useful. Britain does not need another flood of generic apps; it needs more businesses that make things, move things, or support the stuff that keeps the country running. Also, “AI” in a company name is not a strategy, though it does make for excellent investor theatre.
Read more about this at: Startups Magazine
