The global population of startups and entrepreneurs is on the rise.
According to the Global Entrepreneurship Monitor, just 8.9 per cent of the world’s population was involved in some sort of startup business in 2001. By 2016, that figure was 14 per cent.
In the most entrepreneurial countries, particularly in sub-Saharan Africa, startups can employ up to 40 per cent of the working age population. Globally, the number of early stage entrepreneurs had risen from 254 million at the turn of the millennium to 469 million by 2015/16.
We are increasingly aware of the link between prosperity and entrepreneurship: the societies that become prosperous are those that offer businesses, both large and small, the best possible chance of success.
However, the inconvenient truth is that there are still far too many places in the world where starting a company — and, indeed, doing business generally — are far harder than they ought to be. Corruption and maladministration stifle entrepreneurship and create an environment where trading freely within a country, let alone outside it, simply isn’t possible.
Even where there is honest government and competent administration, startups don’t always have access to the capital or professional services that could see them meet their full potential. These barriers are particularly acute when firms seek to leave their home markets and expand across borders.
If we could find a way to break down these barriers and support global entrepreneurship, the results could be staggering. So what if individuals with entrepreneurial spirit were able to launch businesses in the UK, no matter where in the world they reside, and trade globally, benefiting from international trust in English law and British corporate governance?
In Going Global, a new report published by the Centre for Policy Studies this week, former senior adviser to the Prime Minister James Sproule argues for just that.
Sproule sets out two distinct but interconnected proposals, which taken together could put the UK at the heart of the global trade in services and ideas — and support and stimulate entrepreneurship in countless corners of the world.
A new “e-citizenship” scheme would provide an identity document backed by the UK state to eligible entrepreneurs, giving them a definitive proof of identity trusted anywhere in the world and allowing them to participate more fully in an online, globalised economy. “E-businesses”, meanwhile, would enable trusted e-citizens to engage in trade and establish companies in Britain — all without the need to establish physical residency in the UK.
The idea is similar to the Estonian e-residency scheme, which has led to more than 62,000 applications and established more than 10,000 Estonian companies.
Britain’s legal system and financial institutions are among the most trusted in the world. We are not only home to Europe’s financial services industry and its largest capital markets, but we also dominate in related fields such as accountancy and legal services. The British common law system is such an asset that other countries with aspirations for growth have taken to replicating it wholesale, importing British legal experts to ensure the integrity of their business ecosystem. Ours is also the international language of business.
A British e-citizenship scheme would give overseas entrepreneurs access to that unique business landscape, and to the financing and investment that comes with it. Above all, e-citizens would be able to demonstrate they are trustworthy and reputable.
In looking to champion free trade and lead the charge towards global prosperity, the UK can offer no greater advantage to would-be entrepreneurs around the world than extending its economic and legal credibility. No other G7 nation offers such an opportunity to trade, build businesses, establish trusted relationships and find finance.
Moreover, this system would also put UK-based firms in the best position possible to benefit from business with high-growth entrepreneurial parts of the world.
There would be no greater testament to the government’s commitment to free trade and global Britain than inviting entrepreneurs from around the world to benefit from the business culture of the UK — and few better ways of offering British companies a chance to help the most rapidly growing firms in the world to prosper.
Going Global: How to make the UK the champion of worldwide entrepreneurship is published by the Centre for Policy Studies and can be read here.
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