DAVID Cameron has called on the nation’s “doers-and-grafters, inventors and entrepreneurs” to save us from our troubled finances. He’s not wrong. According to research commissioned by Enterprise UK, a rise of just one per cent in self-employment rates could boost the UK’s GDP by around 1.5 per cent and add approximately £22bn to the UK economy.
No wonder David Cameron wants to make this decade the “most entrepreneurial and dynamic” in British history. But the trouble is few believe him. A recent YouGov survey found that while 79 per cent of Brits think the recovery rests on the shoulders of entrepreneurs, only 20 per cent believe it will happen.
Currently Britain is lagging behind: just 5.8 per cent of the population are engaged in the actual process of starting a business compared to 8 per cent in the US and 15 per cent in Brazil and 19 per cent in China.
But don’t think this means that Brits don’t want to become entrepreneurs: 50 per cent of the population want to start a business. Clearly some form of “ambition gap” has emerged. Many are pointing to the education system because research shows that enterprise education at school doubles your chances of business success.
The YouGov poll shows the population is pointing its finger at the government for this one: 77 per cent of people want the government to play a key role in supporting entrepreneurs.
So this week’s Global Entrepreneurs Week is calling Cameron to account, asking him to back British entrepreneurs and to make sure the next decade really is an entrepreneurial one. Below, we have asked entrepreneurs, opinion-formers and decision-makers what can be done to achieve this.
JULIE MEYER | ENTREPRENEUR
It’s in all our interests to make the load as light as possible for entrepreneurs. The government needs to reduce taxes and national insurance contributions in the early years of a business and create labour laws that give greater flexibility to growing companies.
The rest of us however need to make their stories heard to start to change the culture of the UK and encourage an atmosphere of entrepreneurship. After all, NESTA research shows that the 6 per cent of UK businesses with the highest growth rates generated half of the new jobs between 2002-8. We need entrepreneurs now more than ever.
MATT BRITTIN | HEAD OF GOOGLE UK
People simply need to realise the opportunities the internet holds for starting new businesses. It is now easier than ever to start a online business. The internet is a fantastic low-cost tool for trialling products and ideas, allows for easy feedback and marketing and payment methods are faster, safer and easier to use than ever before. Business online is not a new idea anymore. Britain is steaming ahead in this field – proved by the fact that online businesses currently make up 7.2 per cent of GDP (more than the construction, utilities and transport industries put together). And it’s growing at 10 per cent a year. Forecasts predict that online businesses will make up 10 per cent of GDP by 2015.
MARK PRISK MP | BUSINESS & ENTERPRISE MINISTER
We want to support small businesses as they grow and expand, and ensure they have access to the finance they need. This week we announced a new 40,000-strong network of business mentors which will help start-ups, growing companies and businesses seeking financial mentoring. I want to call on more businesses to join this network. The best people to advise entrepreneurs and business owners are those who have already started and run successful companies.
The government wants to create the best possible conditions for our small businesses so the main rate of corporation tax will be cut from 28 per cent to 24 per cent over four years, and the small firms’ rate will be reduced to 20 per cent. We will also extend the highly successful Enterprise Finance Guarantee for four more years, which facilitates additional bank lending to viable small and medium sized businesses (SME). We also want to continue the Enterprise Capital Fund programme that enhances the provision of equity finance to SMEs by using government funding alongside private sector investment. This will enable high-growth start-ups to access important venture capital investment. So my message to aspiring entrepreneurs is: you can make it.
TRAVERS CLARKE-WALKER |
BARCLAYS BUSINESS BANKING
We need to tackle late or non-payment for work if we want to make a big difference for entrepreneurs in this country. In our survey this year we found that, at any one time, around £9bn is owed to small businesses in the UK. Worse, businesses have doubled the amount they have written off and around one in five businesses say that late or non-payment threatens their business’s future. Once debt is written off, that’s money, time and resources lost and for some businesses that may be the difference between profit and loss. Avoiding this isn’t always possible, but businesses can help themselves by making credit checking standard practice – that’s simply doing a credit check on their new or existing customers and working out whether they are creditworthy.
PETER JONES | NEA FOUNDER
If we really want to encourage the “doers-and-grafters” of Britain, we urgently need a shift in culture and this has to start with young people. Research released from YouGov this week showed that young people blame their teachers for their lack of entrepreneurial spirit. They say the number one reason they are held back from becoming an entrepreneur is their teachers’ lack of business experience. We need a structured approach to tackle this if we want to change the nation. There’s a high level of support for doing this. The survey also showed that 54 per cent of people backed the idea of making enterprise education a mandatory part of the national curriculum.
BOBBY LANE | ENTREPRENEUR
The government could encourage entrepreneurs in these tough times by extending the national insurance holiday for small businesses to the excluded areas of London and the South East. This is a great incentive that will encourage more businesses to get off the ground in those difficult early years. The government’s proposed extension of the Enterprise Capital Fund programme is a good idea since many good business ideas are not currently getting funding from the banks.
VIEWS | POLICY WISH LIST
INSTITUTE OF DIRECTORS:
Abolish the right to flexible working and let small businesses conduct this informally.
Introduce a minimum £500 deposit in employment tribunals.
Scrap the ban on the default retirement age.
THE FEDERATION OF SMALL BUSINESSES:
Cut red tape to make it easier to set up small businesses.
A greater number of government contracts must be awarded to small and growing businesses.
Greater financial support for green innovation.
THE BRITISH LIBRARY, IP & BUSINESS CENTRE:
Introduce a fast-track IP scheme for small businesses to help entrepreneurs protect their ideas. The procedure currently takes around two years.
More government sponsored apprenticeships.
Scrap capital gains tax to strengthen the incentive to take risks and become an entrepreneur
Abolish inheritance tax because it doesn't raise much revenue and inheritances are a key source of initial capital for the many entrepreneurs who don't want the risks of borrowing.