To say that the UK has long been a hotbed of entrepreneurship is almost a truism.
Around the world, our light-touch regulatory system, deep market for finance, innovative potential, and world-class learning institutions are the hallmarks of an almost unrivalled destination for new businesses. As a case in point, last year saw around 650,000 businesses created in this country.
Research from the Institute of Directors’ startup network (the IoD 99) today also reveals that, in addition to this appetite for starting new companies, the UK’s entrepreneurs are confident in their ability to grow and develop their businesses in the months to come.
In some ways, confidence must come naturally to an entrepreneur. The twin requirements of a healthy appetite for risk and enough conviction to weather the storm of starting a new business are not traits found in timid people.
However, given the inevitable pressures facing the business community next year (such as big new regulatory requirements and scenario planning for the outcome of Brexit talks), I am extremely heartened to see the UK’s company founders leading the way in anticipating a prosperous 2018.
In a survey of over 600 startup founders, over 83 per cent of respondents expressed optimism about the prospects for their company next year. This is a significant number, far exceeding the confidence levels of company directors more widely.
This confidence around the outlook for their own businesses also stands in stark contrast to entrepreneurs’ expectations for the wider economy next year. In the same sample of IoD 99ers, we found that net optimism about growth in the economy was a paltry five per cent.
It will come as little surprise that the entrepreneurs see the uncertainty caused by Brexit as the largest cloud on the horizon, and progress in this area would provide a tailwind for young companies.
The second greatest cause for concern cited is a lack of access to finance, while at the same time, the awareness of government schemes aimed at promoting funding for startups and scaleups is frustratingly low.
When presented with a list of key business support initiatives from the government, many founders had simply not heard of them. Awareness of the British Business Bank was just 17 per cent, while the Help to Grow loans programme was recognised by fewer than one in 10.
What this tells us is that government departments are still failing to communicate the benefits of established schemes to parts of the business community that could well benefit from them. Moreover, at a time when the government appears constrained in the direct support it can provide to growing businesses, making sure that these schemes are used more extensively must be amongst the lowest hanging fruit available to ministers.
Just one week after the industrial strategy white paper, the results of the IoD’s startup survey should reassure the government that young British companies are at least as optimistic as ministers about the prospects for business growth in 2018.
However, if the government is serious about supporting scaling companies in the short term, departments should spend some time improving how they reach out to the businesses that need their help the most.
The IoD is determined to help growing businesses reach this support and thrive in the months and years to come. With over 1,000 startups joining the IoD ranks in 2017, I am delighted that we are in an ever stronger position to speak for the UK’s entrepreneurs.
In this light, I am also pleased to announce that the IoD 99 has been elected as the UK’s official representative on the G20 Young Entrepreneurs’ Alliance. In this role, we will work with business representatives from around the world to overcome the challenges for startups globally, and continue to bang the drum for UK enterprise as we leave the EU.