On average, 11% of firms in OECD regions were created within the previous 12-month period, with regional differences in a country of up to 13 percentage points.
Creations of new firms and closures of existing, but unsuccessful, firms are quintessential components of a functioning economy. New firms generate employment, spur competition and foster innovation, and the replacement of old unprofitable firms typically contributes to a more efficient allocation of resources within regional economies.
Each year the business environment in the OECD area is characterised by considerable changes as new firms replace old ones. In 2015, almost 10.8 % of firms with at least one employee in OECD regions consisted of newly created firms. At the same time, around 9.4% of existing firms with employment were closed in 2015. The net creation rate of firms, the difference between creation and closure rates, was 1.4%, which was 2 percentage points higher than in 2014. Across OECD countries, regional firm creations differ significantly. While the average regional firm creation rate was below 5% in Belgium and Norway, in several Eastern European countries, such as the Czech Republic, Estonia or Hungary, the regional average surpassed 10% ( 1.21). Similarly, average regional net firm creation rates range from more than 4% in the United Kingdom to -2.7% in the Slovak Republic.
