Over a quarter of a million new firms began trading last year, the highest increase since figures have been recorded, according to new government statistics.
Data from the Department of Trade & Inudstry's (DTI) Small Business Service (SBS) show an increase of 260,000 new businesses operating since the start of 2004.
The business population boom is the highest year on year increase since 1995, when the government began monitoring the numbers and brings the total number of firms currently trading to 4.3 million, up from 4 million at the beginning of 2003.
There are now over half a million more businesses trading than there were in 1997.
"We must continue to support new and existing businesses and ensure that they are at the forefront of our efforts for encouraging a sustainable entrepreneurial culture," said Alun Michael, minister for industry and the regions.
"It is essential that we continue to build on this economic stability and help businesses succeed and prosper by reducing the barriers that prevent enterprising individuals who want to start in business take those important first steps."
The increase in new firms was spread across all industries and sectors, the data confirmed, and at least 95% of businesses in all areas are small firms.
