Bouncing Back

This week, the Government has focused its attentions on the initiatives that will help the UK economy to bounce back from the coronavirus pandemic. In this week’s blog, we cover updates to the Government support schemes, the launch of recovery roundtables to unleash the UK’s growth potential and news highlights featuring some of our inspiring Members. 

FEMALE FOUNDER HIGHLIGHTS

Here is a quick wrap up of this week’s news highlights, featuring some of our inspiring Members and other female founders from the network:

• Mr & Mrs Smith, founded by our Member Tamara Lohan, has launched a crowd-funder to raise money for a night off for NHS and care home workers. The initiative is aimed at giving 1000 NHS workers a night at one of their hotels. To find out more and donate to the crowd-funder, click here. If you are an NHS or care home worker, you can apply for a free stay here. 

• Founder of Enterprise Alumni and our Member, Emma Sinclair has started #FounderHour with three guests joining each session.You can register for a #FounderHour Webinar here.

• June Angelides, founder of Mums in Tech spoke with Danielle Newhnan about lockdown life in London and the opportunities coming out of the coronavirus pandemic – “there has never been more accelerated innovation”. You can read the full interview here at Medium.

• Cofinitive, founded by our Member, Faye Holland, ran its #21toWatch Campaign and Awards this week. The campaign is run each year to showcase and highlight individuals and companies across Cambridge and the East of England who are setting the standards in innovation and entrepreneurship. 

GOVERNMENT SUPPORT

1. Self-Employment Income Support Scheme extended

The Government has announced a final lifeline for the self-employed. Those eligible for support under the Self-Employment Income Support Scheme (SEISS) will be able to claim a second and final grant in August 2020. The grant will be worth 70% of average monthly trading profits, covering three months’ worth of profits and capped at £6,570. For an update on the Scheme, check out our policy update.

2. Coronavirus Job Retention Scheme extended

The Government has explained how it intends to continue to support jobs as people begin to return to work. From 1 July 2020, businesses will be given the flexibility to bring employees on furlough back to work part time. In June and July the Government will continue paying 80% of furloughed wages, up to £2,500. From 1 August 2020, the payments will be tapered to reflect the fact that people will be returning to work as follows:

• August 2020 – employers will be asked to pay NI and employer pension contributions

• September 2020 – contributions will drop to 70%, with employers paying 10%

• October 2020 – contributions will drop to 60% with employers paying 20%

The scheme will shut in October/November. For more information, check our policy updates and our Twitter updates.

3. Business Secretary launches recovery roundtables

The Government has announced the launch of 5 new business-focused groups to unleash Britain’s growth potential and create new jobs. This is part of the Government’s plan to help the economy bounce back from the coronavirus pandemic. 

The ‘recovery roundtables’ will bring together businesses, business representative groups and leading academics to consider measures to support economic recovery. The roundtables will focus on 5 key themes: the future of industry, green recovery, backing new business, increasing opportunity and opening the UK for business. 

BARCLAYS SUPPORT AND OPPORTUNITIES

1. Barclays Back to Business Programme

Barclays has launched a free toolkit to help small and medium sized enterprises (SMEs) across the UK get back on their feet as they navigate the uncertainty created by coronavirus. The 'Barclays Back to Business' programme has been designed in partnership with the Cambridge Judge Business School and is open to all UK SMEs. The toolkit is designed to help business owners assess the overall health of their business, and create a tailored resilience plan for challenging periods. It is packed with practical tools including a working capital calculator, cash flow forecasts, and guidance on managing supply chain relationships.
 
Register your interest here. Cambridge Judge Business School will get in touch to confirm your place on the programme, including how to access the online platform, which launches on 22 June 2020. For more information, check out Barclays Back to Business Programme.

2. Barclays Entrepreneur Awards – now open for nominations!
 
The Barclays Entrepreneur Awards are back for the fifth year running and whilst the start to 2020 has been a difficult time for all, it's given us even more reason to celebrate entrepreneurs and recognise their achievements. So often it's their exceptional innovation alongside their drive for social change and to overcome challenges that keep the country moving forward.
 
To find further information on the awards itself, please visit our website here and you can find further details on the award criteria’s and categories directly on our nomination website. Submit you nomination by Friday 3 July.

3. Virtual Event – with Nicky Goulimis (co-founder and COO of Nova Credit)

Nicky Goulimis, the Co-Founder and COO of Nova Credit will be joining Juliet Rogan, Head of Barclays High Growth and Entrepreneurs, for an informative discussion on  how to rapidly scale and expand your business. In this session on Thursday 9 July at 5pm, you’ll find out how Nova Credit went from light bulb moment to a $50m Series B funding round and learn more about Nicky’s experiences as a successful female founder. To sign up for this event, please register here.

4. Barclays Coronavirus Support Hub

The Barclays coronavirus support hub provides the latest information, tools and guidance to support businesses throughout the coronavirus pandemic. This hub includes information about Barclays’ products, webinars, Facebook live events and more information on how to access the government schemes. You can also download Barclays’ coronavirus checklist to support your business resilience planning throughout this period. There is also an updated FAQs section on this hub.

We want to inspire female entrepreneurs across the UK. Do you know any inspiring female entrepreneurs? 

Connect them to jess@tenentrepeneurs.org and sign up to our Newsletter, which we send out every two weeks.

If you share content with the hashtag #femalefoundersforum, we will retweet you or repost it.

Is energy ripe for entrepreneurship?

If the UK is to meet our ambitious net zero target by 2050, then we will need to substantially reduce the emissions associated with heating our homes, powering our appliances, and fuelling our cars. If entrepreneurs and innovators are not able to find affordable low or zero-carbon options, then it will require us to make dramatic changes to our lifestyles. 

The good news is we have made real progress over the past decade. In fact, this past month for the first time since 1882, we went more than 28 days without using coal and greenhouse gas emissions from energy have more than halved since 1990. By taking coal off the grid, we have picked the low-hanging fruit of decarbonisation. The next phase will be more difficult and will require more entrepreneurial ingenuity.

Historically, innovation in the energy sector has been slow and start-ups have played a bit part. But that may be changing. A new paper assesses the prospects for innovation and entrepreneurship in the energy sector and finds that innovation is traditionally sluggish. R&D in the sector is low relative to almost any other industry and startups face a number of hurdles.

• First, there are large economies of scale in energy. Start-ups will typically require lots of up-front investment in capital before they can break-even.

• Second, energy is a commodity. In other sectors, start-ups can compete on cost or quality, and differentiate their product. In the energy sector, consumers will go for whatever’s cheapest.

• Third, there are long time lags between idea and commercialisation. Venture capitalists typically expect a return in five-to-seven years, but breakthroughs in energy may take decades. 

• Fourth, green innovators face a double externality problem. Knowledge spills over, and so their innovation benefits rival companies who can copy their new methods. Compounding the problem, without government intervention (e.g. carbon pricing), the social benefits of cleaner energy are not captured by the innovator, reducing the incentive to invest in green R&D. 

Stimulating green innovation will require us to overcome the above problems.  Understanding the obstacles to green entrepreneurship will also be key to finding the right policy responses. 

On the first three fronts, the authors argue that: “New energy technologies are often smaller and modular (e.g. solar panels, smart meters for homes), reducing the need for large capital costs. While energy remains a commodity, the popularity of products such as Nest thermostats suggests that product differentiation is possible for end-use technologies that improve energy efficiency and potentially improve grid management.”

However, while patenting and VC investment in the renewable sector increased substantially the first decade of the millennium, it has fallen off since 2010. It isn’t clear why this happened. It could, for example, be a result of researchers having picked off the low-hanging fruit. Or, we may simply have shifted from a research phase to a deployment phase. Innovation may still be happening but it might be the sort of incremental innovation that’s hard to patent and better kept as a trade secret.

We can’t ignore the role of pricing either. Unless polluters bear the full social costs of emitting carbon, then consumers will have little incentive to switch to cleaner forms of energy, and nor will innovators have as much incentive to create emissions-saving technologies. In an older paper, for example, one of the authors finds that a “10 percent increase in energy prices leads to a 3.5 percent rise in the number of U.S. patents in 11 different alternative energy and energy efficiency technologies”. The finding is corroborated in another paper from 2017: “A 10 percent higher fuel price is associated with about 10 percent more low-emission energy patents and 7 percent fewer fossil-fuel patents.”

However, it’s important to look at where high or low prices come from too. The paper cites research finding that “consumers are more responsive to changes in taxes than market-generated fluctuations in price, as tax increases are perceived as more persistent”. So while a carbon tax or a ULEZ charge might get you to switch to an electric vehicle, an increase in oil prices won’t.

There’s loads more in this paper, and I’ll probably revisit it in a future blog. Read it here. 

We’ve just kicked off a “Green Entrepreneurship” project that will look at how entrepreneurs, and their innovative technologies and ideas, can help deliver a more sustainable future. 

Regulation, Regulation, Regulation

It was just three weeks ago that I wrote about regulation, so I’ll try to keep it brief as I appreciate that for many it’s a surefire cure for insomnia.

Nevertheless, regulation really does matter for entrepreneurship in the UK. Good versus bad regulations can result in a business or sector being able to flourish or being stymied – it can be the difference between the UK becoming a laggard or a leader in a new technology.

We have been asked by the Better Regulation Executive to represent your views on regulatory changes to ensure an entrepreneur-led economic recovery. If you fill in this survey we will pass all views directly to them and pull out some to deliver in our presentation. It’s an opportunity to have a direct say on the future of regulation. There are no required questions apart from an email (we don’t like unnecessary regulations here), so answer as few or many as you want. But feel free to get into the nitty gritty of what’s impacting your business or industry as that’s where the real gems will be. We welcome expert input from non-entrepreneurs too.

Separately we’ve started work on a project considering broader regulatory reforms (you can get a hint about what this might look like here). Your views will also help inform this work and we may ask to use your insights as a case study for it. If you have any questions about this report get in touch with our research director Sam Dumitriu.

H is for
Today is World Environment Day. “One of the few benefits of the Coronavirus lockdown has been the dramatic improvement in air quality. To continue enjoying this unexpected bonus, we need to speed up the transition to zero-emission vehicles – like electric cars or hydrogen-powered buses,” argues Eamonn Ives in a report out this yesterday on how hydrogen can fuel a transport revolution.

As Eamonn makes clear, despite extremists on either side of the debate, we don’t need to choose between economic growth and environmental protection – both can go hand-in-hand. 

Even if we electrified all of Britain’s cars tomorrow, other modes of transport would still be emitting 56.2 million tonnes of carbon dioxide equivalent – 45% of transport emissions, or fully 12% of total emissions. Eamonn suggests innovation in hydrogen technologies will be part of the puzzle for these heavier vehicles for which electric batteries might never be suitable. 

Regulation matters (sorry, I can’t help myself today). We currently have some very perverse incentives at play. As the report details, each year the Government doles out around £250m to bus operators as part of the Bus Service Operators Grant (BSOG). Payments are based upon the volume of fuel consumed – paying operators 34.57 pence per litre of diesel burnt. What the BSOG strictly incentivises, therefore, is fuel consumption, as opposed to distance travelled – disincentivising reduced fuel consumption. This can be easily fixed.

More broadly, Eamonn calls for hydrogen to be given a much bigger role in transport decarbonisation by using the UK bus fleet as a testbed for the technology. “Embracing hydrogen would also give Britain an opportunity to lead the world in a vital sector and create thousands of green jobs – at a time when other economies are moving quickly to seize the global hydrogen market.”

Eamonn has written about the report for City AM and CapX, and is writing a report we’re undertaking with the Enterprise Trust on entrepreneurship and the environment. You can drop Eamonn an email to find out how you can get involved.

Starting Gates
Many of the world’s best companies were started in recessions. While access to finance can be a challenge, the disruption in talent may push the next Bill Gates into starting a business (Microsoft was started in the midst of the mid-1970s oil crisis). Gates famously dropped out of Harvard, but many great ideas are started or spun out of universities. 

The National Association of College & University Entrepreneurs – better known as Nacue – has been supporting entrepreneurship among students in higher education and further education for over a decade, and has opened up applications for students and graduates across the country to participate in its annual competition: Tata Varsity Pitch 2020. The competition is open to any current student studying at a UK based institution or anyone who has graduated since 2015. The application process starts with a 60-second video pitch and the deadline is 24th July.

If you know a student who has a business (or even just a great idea) – let them know about it.

Read the whole Newsletter here, and sign up here.

Level Best

The Chancellor has just announced changes to the furlough scheme.

As expected, in June and July the government will continue paying 80% of furloughed people’s wages, up to £2,500. From July, earlier than planned, employers will have the flexibility to bring back employees for a set number of days per week.

But furlough is being unwound. From August employers will be asked to pay national insurance and employer pension contributions, and from September taxpayer contributions will drop from 80% to 70%, with employers paying 10%. In October this will be 60% and 20%, after which the scheme will shut. 

Rishi also announced a final lifeline for the self-employed, following intense lobbying, including from 113 cross-party MPs. Those eligible under the Self-Employment Income Support Scheme (SEISS) will be able to claim a second and final grant in August. The grant will be worth 70% of average monthly trading profits, paid out in a single instalment covering three months’ worth of profits, and capped at £6,570 in total.

How to spend it
It can’t have escaped anyone’s attention that prior to coronavirus this Government’s main platform was ‘levelling up’ – that is, rebalancing the economy between London (and the South East more broadly) and the rest of the UK. There are plenty of policy levers that could be pulled to try to bring this about, but there are no quick fixes.

One lever that could be particularly powerful in the medium to long term is increasing R&D funding. The government has a target of increasing total R&D spending to 2.4% of GDP. This is expected to mean an increase of public sector funding from 0.55 per cent of GDP today to at least 0.75 per cent of GDP.

But how should public R&D be spent? There are a few key choices the government must make. Should the government spend equally everywhere? Should it spend where research is already excellent (i.e. Oxford, Cambridge and London)? Should it spend where businesses already spend on R&D? Should it spend where the economy is weakest? Should it spend where manufacturing is strongest? These are the questions explored in a new paper from Nesta (they have produced a nifty interactive tool that lets you see how these decisions would impact different regions).

The report calls for substantial devolution of innovation funding to remedy the regional imbalance in government R&D spending; the creation of new science and technology institutions outside London, the South East and East of England to create a more balanced distribution of research infrastructure across the nation; and UK Research and Innovation (UKRI) to take a lead in driving regional R&D rebalancing, addressing the systematic factors that have led to the current geographical concentration of R&D spending. 

On Tuesday, Nesta is hosting a webinar on the report, and Tom Forth, co-author of the report, has a useful Twitter thread that will save you reading the whole report. One chart that really stands out shows that UK regions like The West Midlands and North West England are almost unique in Europe, having high business spending on R&D, but very little public spending. Similar regions in France and Germany enjoy two to three times the state investment. 

Silicon what?
Coronavirus might also drive levelling up as companies change the way they work. Early survey data suggests that a majority of US hiring managers think workers are more productive working from home: 32.2% thinking it has increased versus 22.5% who think it’s decreased, and the likes of Facebook and Twitter announcing that they’ll offer a permanent option to work from home to most employees. 

Matt Clifford has written for Wired on how coronavirus might spell the end of tech hubs – and why that’s a good thing. While there are fears that not being present will lead to less innovation (due to less knowledge spillover and serendipitous meetings), Clifford is more optimistic: “far from breaking innovation clusters, remote work, if executed well, can create a new model for collaborative innovation – one that overcomes the limits of existing clusters and unleashes human potential around the world.”

Specifically, Clifford argues that remote working will overcome the diseconomies of scale of tech clusters, that new tools and practices will make collaboration at a distance more effective, and that opening up companies to more talent from around the world will outweigh any friction. This could be transformative for overall economic wealth, levelling up regions and giving individuals around the world greater equality of opportunity and freedom to live where they want.

Read the whole thing here, sign up to newsletter here.

Getting Back To Business

This week, our Female Founders have been at the forefront of a number of amazing initiatives, from developing new apps which track the social impact of the COVID-19 crisis, to sharing stories about mental health, in the hope that it will help others. It’s inspiring to see our Female Founders banding together in uncertain times and championing inclusive and diverse innovation. 

In this week’s FFF Newsletter, we cover the latest policy updates you should know about and share practical guidance to help you stay resilient in these uncertain times.  

UK GOVERNMENT SUPPORT

1. Innovative Businesses and Start-ups competition

The UK Government announced an additional £40 million funding package to support the UK’s next generation of innovative businesses, doubling their investment in the Fast Start Competition. The competition aims to fast-track the development of innovations, borne out of the coronavirus crisis and support the next generation of UK cutting-edge start-ups. 

2. Future Fund goes live

The Future Fund scheme went live last week and has opened for applications. Following the Save Our Startups campaign, the Government announced the Future Fund, a matched convertible loan scheme for startups looking to raise between £250k and £10m.

In last week’s Newsletter, we covered the open letter written by Emma Sinclair and Hephzi Pemberton, urging the Chancellor to set an “aspirational target” for backing diverse founders. Signatories included our Female Founders, Sam Smith, Tamara Lohan and Kathryn Parsons. 

The British Business Bank published new guidance ahead of the launch. You can read the FAQ here. For an update on the Future Fund, you can check out our policy update.

3. Updated Guidance: Holiday Entitlement and pay during Coronavirus

The UK Government has published new guidance on how holiday entitlement and pay will operate during the coronavirus pandemic. It is designed to help employers understand their legal obligations, in terms of workers who continue to work and have been placed on furlough, as part of the Government’s Coronavirus Job Retention Scheme (CJRS). You can contact the Advisory, Conciliation and Arbitration Service (Acas) if you have further questions. 

4. Updated Guidance: Statutory Sick Pay

The UK Government has published new guidance on how to claim back Statutory Sick Pay (SSP) paid to employees affected by coronavirus. The online service went live on 26 May 2020. The Coronavirus SSP Rebate Scheme will repay employers the SSP paid to current and former employees. The repayment will cover up to 2 weeks starting from the qualifying day of sickness.

5. Updated Guidance: National Cyber Security Centre advice for Sole Traders and SMEs 

The National Cyber Security Centre (NCSC) has launched advice and practical tips to help SMEs move their business online. The advice comes, as many SMEs have had to adapt their organisations to remote working environments. If you are self-employed or a sole trader, you can find useful advice here. If you are an SME, advice here may be useful.

BARCLAYS SUPPORT AND OPPORTUNITIES

1. Barclays Coronavirus Support Hub 

The Barclays coronavirus support hub provides the latest information, tools and guidance to support businesses throughout the coronavirus pandemic. This hub includes information about Barclays’ products, webinars, Facebook live events and more information on how to access the government schemes. You can also download Barclays’ coronavirus checklist to support your business resilience planning throughout this period. There is also an updated FAQs section on the hub.

Barclays is also developing further digital content, including Q&A videos with our Members, which will go live on our new YouTube channel. We will update you via Twitter, Instagram and LinkedIn when the Q&A videos go live.  

 2. Back to Business Live Broadcast

As lockdown is lifted and we all continue to adapt to the situations around us, Barclays is hosting a ‘Back to Business’ live broadcast as part of its wider Business Banking live streaming series on Thursday 28 May, 10:00 – 10:30.

Join the discussion on the Barclays Business Banking Facebook and LinkedIn channels where a panel of experts will be exploring the support currently available for businesses as well as the opportunities and challenges for SMEs during this time.

3. Barclays Back to Business Programme 

Your toolkit to build for tomorrow with the help of Barclays’ free online learning platform. Developed with Cambridge Judge Business School, the Barclays online programme is free for SMEs who are existing Barclays SME clients including Business Banking, Barclaycard Business, RISE and Eagle Labs tenants.

You’ll get practical frameworks to help you create a plan to sustain or grow your business during a period of uncertainty such as the current pandemic, downloadable workbooks, and you’ll be able to bounce ideas off a range of specialist from Barclays to finalise your plan at the end of the programme. 

Register your interest here from 28 May, and subject to availability, Cambridge Judge Business School will get in touch to confirm your place on the programme, including how to access the online platform, which launches on 22 June 2020. For more information Search ‘Barclays Back to Business Programme’

4. Barclays Eagle Lab headline RE-Defined

Barclays Eagle Labs are this year’s headline sponsors of RE-Defined. A virtual conference celebrating the successes and resilience of female founders and underrepresented women in business across the UK. Taking place on Friday 29 May the conference will include practical workshops, curated talks and a panel session featuring inspirational female founders and leading women in business. This is a ticket-only event – to secure your place click here.

5. Highlights from Barclays Ventures Panel

Barclays ran a Ventures Panel with two fabulous female founders – Michelle Kennedy, founder of Peanut and Amber Atherton, founder of Zypher. The panel ran on 14 May and covered actionable tips, how the founders have pivoted during the pandemic. It included inspiring stories of how they’ve done this whilst managing remote teams and battling with personal challenges.

FEMALE FOUNDER HIGHLIGHTS

Here is a quick wrap up of some of the news highlights, featuring our Female Founders. 

• Buddi, a company founded by our Member Sara Murray, has been selected by the UK Government to support the NHSX against COVID-19. Member June Angelides, founder of Mums in Technology, spoke to Squiggly Careers in their podcast 'Stories from the front line – managing my mental health'. 

• Our Member, Tugce Bulut, founder of Streetbees spoke with EU-Startups about how the current pandemic has impacted Streetbees. Streetbees has recently launched a COVID-19 Human Impact Tracker which is already being used by several consumer brands. Streetbees has also given free access to a number of non-profits including Amnesty International, the NHS and the London Mayor’s office

• Marta Krupinska, Head of Google Startup, Co-Founder of Azimo and one of our FFF Members, discussed with Spark how Google Startup, governments and NGO’s can partner to support entrepreneurs in the coronavirus crisis, so that we can come out of it stronger and more connected.

• Sam Smith, founder of FinnCap and an FFF member, wrote a letter in the Financial Times, making the case for better funding support for UK SMEs.

• Our Member, Annabel Karmel took part in Maternal Health Week, speaking about how she is dealing with lockdown and sharing her advice and tips for taking care of your mental health, during this crisis

• Last week, Liz Johnson, gold-medal winning Paralympian and Co-Founder of The Ability People, spoke to Dr Lisa Cameron MP and Kush Kanodia about the key issues impacting disabled entrepreneurs in the APPG for Entrepreneurship Webinar.

We want to inspire female entrepreneurs across the UK. Do you know any inspiring female entrepreneurs? 

Connect them to jess@tenentrepeneurs.org and sign up to our Newsletter, which we send out every two weeks.

If you share content with the hashtag #femalefoundersforum, we will retweet you or repost it.

Bringing the Future Forward

When we finally see the easing of lockdown from the pandemic, the government will be looking for ways to jumpstart the pace of economic recovery. Ideally, in addition to businesses reopening and people going back to work, it will want to do something about innovation. So one of the things we’ve been exploring here at The Entrepreneurs Network is what kind of policies might constitute a “Big Bang” for UK innovation.

Here’s one: the patent buyout. A patent buyout involves the government buying a patent from its owners and making it open and available for the public to use. The best-known example is the French government’s 1839 purchase of Louis Daguerre’s patent for photography. By making the technology freely available to all, it unleashed a burst of creativity in the industry. Strangely, however, the policy has been very rarely used since, even though there’s some evidence that the expiry of key patents can have a similar effect.

Take 3D-printing. Although many 3D-printing techniques were invented in the 1980s, the industry was only truly unleashed in the 2010s when many of the original patents began to expire. So the impressive maker movement might have occurred decades earlier had the key patents been bought out and released. While the key, bottleneck patents were still in force, the number of 3D-printing patents in the US never exceeded 3,000 per year - typically minor improvement to the key processes. But since those key patents expired, the number of patents in the industry has grown to almost 45,000 per year. And that does not even capture the now flourishing movement to create open-source improvements to the technology too. So just imagine what might be done with a few judicious uses of the patent buyout in other key industries that are currently being held back. By effectively bringing forward the expiry date of a few bottleneck patents, the pace of change might be accelerated by up to two decades - the maximum duration of a patent.

When it comes to buying out patents, however, the main issue is in how to price them. It’s this problem that perhaps explains why the policy has not been more widely adopted. If the government sets a price that is too low, then inventors will be unwilling to sell their patents. If too high, then it might be seen as rent-seeking and become a waste of taxpayer money - what if they overpay for a near-worthless invention? But there is an ingenious solution to the problem, suggested in 1998 by Nobel-prize-winning economist Michael Kremer: to use auctions to discover the patent’s true value. Through this price-discovery mechanism, the government can identify the highest-value patents - those that are more likely to represent true bottlenecks slowing innovation down. And it can even discover how much it should offer to buy them out.

The idea is that a large number of different patents are auctioned for private sale, without the bidders knowing which of them the government will offer to buy. Thus, the bidders would still have an incentive to provide accurate valuations for all of the patents, as there would be a chance of them actually being able to buy them. To prevent collusion, the bidders would submit their bids simultaneously, and the second-highest would win. Thus, the private bids would allow the government to discover the patents’ market prices. Then the government would step in for some of the more valuable patents – ideally randomly selected, again to prevent collusion – and offer an amount that is a fixed percentage more than the third-highest bid.

So far so good. But another issue to figure out is which patents to even consider buying as part of an auction. In the UK alone, over 3,000 patents are granted every year, with tens of thousands being granted by the European Patent Office and thus effective in the UK, not to mention the hundreds of thousands of patents that cover the UK as part of international agreements. Nonetheless, the vast majority of these are unlikely to be bottleneck patents. So perhaps one way to narrow it down would be for the government to identify the key sectors that it already wishes to encourage as part of its current innovation strategy, and to then consult with industry leaders to identify a very large number of patents that they think are slowing the industry down - the larger the number of patents to get on this long-list, the lower the chance of collusion and rent-seeking through industry lobbying. It might then be a matter of whittling down that list randomly, again to prevent rent-seeking, to a shortlist of those that will actually be invited to participate in the auction.

Lastly, in terms of value for money, the private returns to innovation are almost always only a small fraction of the social returns. The spillovers from innovation are, on average, truly massive. So even if the government were to overpay for a patent relative to market prices, it would almost certainly still pay only a fraction of the expected social returns. (In fact, Kremer was so confident in this, that he suggested that the government pay twice as much as the third-highest bid, which would still be only a fraction of the social value).

Rather than trying to replace patents, the patent buyout would be a useful supplement to the current system. As such auctions would be entirely voluntary for the potential sellers, they would not affect patents’ usual incentives. But at the same time, even conducting a few buyouts would give an opportunity for a Big Bang moment for British innovation. The government would be able to immediately announce that it had blown wide open some of the key bottlenecks at the cutting edge of certain sectors, and thus brought the future forward by decades.

Future Proof

The Future Fund is up and running; more like sprinting, actually. On the first day, £453m was pledged to fund many of Britain’s most innovative businesses. That’s £906m as and (presumable) when it’s matched by the government. (The original plan was to limit the fund to £250m.)

The Future Fund is the right policy for the economic challenges we now face. As Sam Dumitiru explains on our blog, research suggests that VCs take fewer risks when funding is limited. This means less innovations and spillovers that make us all richer. This new fund will go some way to counteracting that.

The Entrepreneurs Network was a founding partner of the Save Our Startups campaign, so it is heartening to see the proof that there is demand for an equity-based solution to the current challenges. But from our vantage point certain people deserve singling out for getting it over the line, including Dom Hallas and Joel Gladwin at Coadec, serial entrepreneur Brent Hoberman, former special adviser to Prime Minister Daniel Korski, John Spindler of Capital Enterprise, Kerry Baldwin of IQ Capita, Emma Sinclair on the diversity front, Bim Afolami MP, and, the Chancellor Rishi Sunak. But most of all, the thousands of entrepreneurs reading this who got behind the Save Our Startups campaign. Pat yourself on the back!

For more information on the Future Fund:
– the British Business Bank has an eligibility checker;
– we have a pithy policy update;
– the British Business Bank has a useful FAQ;
– Jeff Lynn of Seedrs has written a thoughtful article;
– Sifted has an article on how to apply for the Future Fund;
– John Glen MP has written on why the Treasury doesn’t want it to be just for male-dominated, London-based businesses.

If you have any further questions we can raise them on your behalf with the British Business Bank. Just drop me an email. And keep us updated with how this policy is working at the coalface.

Creed is Good
The stereotype of economists is that they can’t come to a consensus. But if it's unanimity you’re looking for, take a look at the issue of free trade. As Paul Krugman claimed, if there were an economist’s creed it would include: “I advocate Free Trade". It’s something pretty much every economist believes, nay knows, to be true. Politics, however, gets in the way.

For economists, free trade is (rightly) considered from the perspective of consumers, who benefit from access to cheaper goods and more choice. Of course, at the business or sector level, changes to tariffs can have both positive and negative impacts on domestic businesses, so are not always welcome and cuts to them are lobbied against.

This Government has shown a rhetorical commitment to free trade. The post-Brexit tariff regime which has just been announced will eliminate tariffs on around 60% of goods, as opposed to the planned 87%. (As part of the EU there’s only tariff free trade on 47% of goods, but the downside is that if we leave without a decent deal we’ll have tariffs with our closest neighbours which is why most economists think Brexit will make us poorer.)

From next year there will be zero tariffs on all sorts of products, including copper alloy tubes, screws and bolts, dishwashers, tampons, vacuum flasks, bike inner tubes, LED lights, but also 10% duties on cars, and levies on beef and poultry as well as protections for the ceramics industry. As such, the headline is that the cost of imported food and cars will go up unless a deal is struck with the European Union.

Entrepreneurs can get guidance here on the UK tariffs that will apply from next year. You can search for tariff rates that will apply here. It doesn’t make for pretty reading – the complexity and exemptions are enough to make even the most heterodox economist cry.

Going for Gold
As the secretariat for the APPG for Entrepreneurship, we partnered this week with the APPG for Disability on a webinar focused on the impact of coronavirus upon entrepreneurs with a disability.

With Dr Lisa Cameron MP, Liz Johnson (the gold-medal winning Paralympic swimmer and entrepreneur) and Kush Kanodia (the serial social entrepreneur), we considered the public health challenges for some disabled entrepreneurs; the current support that government provides to entrepreneurs with disabilities; and the potential post-coronavirus changes (e.g. changing working patterns, technologies etc.) and how they might support entrepreneurs with disabilities.

The big takeaway is that the APPG for Entrepreneurship needs to do more work in this policy area. If this is a policy area that you’re interested in, get in touch – particularly if you or your company are keen to partner on a briefing paper considering the role of government in ensuring ambitious entrepreneurs with a disability are start and scale their businesses.

Read the whole newsletter here, and sign up here.

Is the gig economy a safety net for new entrepreneurs?

In his paper “The Free Market Welfare State”, economist Sam Hammond argues that a strong safety net can complement a dynamic market economy. Part of his justification is that fewer people will lobby against creative destruction if the costs of adjusting (e.g. a period of unemployment) are mitigated. He notes that Denmark’s generous wage replacements and active labor-market policy enables them to have one of the highest job switching rates in the world. For context, Danes change jobs at about twice the rate as Brits.  

But the value of the safety net to economic dynamism isn’t limited to reducing political resistance to trade and innovation. When there’s a safety set, people feel more comfortable to take risks. He cites a study which looked at the expansion of SNAP (the US’s food stamps programme) in the mid-2000s.  

“Newly eligible households were also 20 percent more likely to start their own business, independent of whether they opted to receive the benefit – exactly what one would expect if food stamps acted as insurance for entrepreneurial risk-taking.”

A new working paper (HT: James Pethokoukis) argues that gig economy platforms may serve a similar function. It finds that when gig platforms like Uber and Lyft enter a market in the US, there is a 4-6% increase in new business registrations in the area. 

The authors argue that the ability to supplement fluctuating and uncertain earnings through gig work spurs on entrepreneurship by insuring against some of the risks of starting a business.

It’s not clear if the US data will apply equally to the UK. There are two potential reasons why it might not. First, the UK’s safety net is more comprehensive than the US's. 

Second, drivers may be more likely to drive full-time. In the US, around half of Uber drivers work for 15 hours or fewer each week, though not in highly regulated markets such as New York. This isn’t the case in London where the vast majority (72%) drive for 20 hours or more each week. Stricter licensing, vehicle requirements, alongside the congestion charge may make part-time driving less economical.

However, the trend seems to apply beyond ridesharing. The most recent Global Entrepreneurship Monitor’s annual report (which the Entrepreneurs Network helped launch in the UK), found that gig workers in the UK were twice as likely to be planning to start a business in the next three years compared to the general population (19.2% vs 8.5% respectively).

Some people argue that the rise of the gig economy is leading to a rise in ‘fake entrepreneurship’. But this paper highlights how gig work can serve as a stepping stone to more impactful forms of entrepreneurship.

Coronavirus, VC Investment, and Innovation

I recently wrote about the potential impact of coronavirus on innovation.  If coronavirus leads to a fall in the availability of venture capital then it could lead to fewer high-risk, high-reward innovative startups getting funded and lead to less innovation overall. My concerns were prompted by a study by Ramana Nanda and Mathew Rhodes-Kropf, which looked at the relative performance of VC investments in upmarkets and downturns. 

One of the authors of that study, Ramana Nanda, along with other leading researchers, has released a new working paper assessing the initial impact of the coronavirus pandemic on venture capital returns.

They found:

“… that U.S. VC activity fell precipitously during the initial phases of the coronavirus disease 2019 (COVID-19) crisis, despite government efforts to prop up startups.”

More interestingly, the decline in funding wasn’t spread evenly across the market. Instead, it appears to back up the concern that VCs will take fewer risks when funding is limited.

“In unpacking the source of this decline, we find that the number of weekly early-stage VC deals declined by nearly 38% in the two months starting March 4, 2020, relative to the previous four months. In contrast, later-stage VC has remained much more robust thus far.”

The researchers identify a few other interesting effects. 

First, looking at patent data they find that the quantity and quality of VC-backed innovation is linked to the business cycle.  

“The number of patents applied for by VC-backed firms, as well as the quality of those patents, is positively correlated with the amount of VC investment into startups in a given month.”

Second, they find this effect is driven by a decline in activity from VC specialising in early-stage investment. Later-stage VCs by contrast are more insulated from the wider economy.

The government’s Future Fund opens today and it aims to shelter VC-backed innovation through the crisis. This new study highlights why the case for intervention is particularly strong. However, it also raises concerns. Investments through the Future Fund can be as high as £10m (split 50:50 between investor and government). Yet startups need to have already raised at least £250,000 to qualify. If the impact is felt sharpest at that end of the market, then perhaps it should be lower.

Horizon Scanning

Coronavirus is forcing entrepreneurs to experiment and innovate. Having lived with the virus for longer than others, China is a useful guide for understanding how businesses are using robots for deliveries, temperature-detection technologies to identify customers who are at high risk of carrying the virus, and drones to drop parcels and to spray disinfectant.

Writing about the UK, Ed Conway has written optimistically about how new tech can help us thrive in a coronavirus world (The Times – Paywall). However, there are some blockages. Conway explains how many smart watches contain a plethysmograph – a sensor that can measure the volume of blood flowing through your veins. This technology could save lives in our battle with the virus, as measuring oxygen levels can help identify whether you have pneumonia, which is vital as Covid-19 seems to mask the symptoms.

Apple hasn’t turned on this function yet but might be able to in a software update. Conway suggests that it’s a matter of priorities – “heart disease typically kills three times more Americans than respiratory diseases, flu and pneumonia combined, so it made more sense for Apple to improve the heart readings rather than activate a potentially unreliable oximeter” – but it might also be an issue of regulation. In the US at least, FDA regulations are the blocker.

Conway paints a welcome picture of a new era of virtual globalisation, with coronavirus teaching us the value of online doctors’ appointments, edtech learning and remote meetings, which brings to mind Marc Andreessen’s recent It’s Time to Build article. The legendary entrepreneur, investor, and software engineer argues, perhaps unsurprisingly, that it’s time to build – not just coronavirus tests, ventilators, negative pressure rooms, and ICU beds, but automated factories, supersonic aircraft and gleaming skyscrapers. It’s a great polemic that stands on its own, but the inevitable question is why aren’t we already building more?

Depending on what we’re talking about there are different answers, but as the case of the FDA and Apple’s plethysmograph shows, unnecessary or unclear regulation often holds back businesses from delivering for consumers. This isn’t about laissez faire versus excessive government interventions (though it sometimes is), it’s about regulators creating the rules, certainty and space for innovators to flourish. In an excellent article, José Ricón unpacks what is needed for Andreessen’s call to arms to be made a reality. He concludes: “what urgently needs building is systems (institutions, regulations) that enable and encourage builders. The quote goes ‘Build and they will come’, but we may say ‘Regulate wisely and they will build’ as well.”

As we’ve argued from the start, we should be optimistic about the potential for innovators to beat the virus, overcome the disruptions to our way of life and in the process create new and better ways of doing things. But it’s also a time to take stock of how we can get more innovation in the future, and startups now have a rare opportunity to have an influence on regulation (just consider the Government’s sudden push to speed up e-scooter trials). I'm in regular conversations with the government's new Regulatory Horizons Council (RHC), so now is the time to let me (and them) know what you need.

Some like it hot
Conventional wisdom says that during the good times, ‘hot markets’ draw in dumb money, investor discipline falls and bad investments are made. But is this true? A study by two Harvard economists, Ramana Nanda and Mathew Rhodes-Kropf, puts it to the test by looking at whether startups funded in booms are more likely to flop.

While funding in a boom is associated with a higher failure rate, those that succeed are likely to IPO at higher values, patent more, and patent better. It seems ‘hot markets’ allow for more experimentation because they reduce the risk that a start-up won’t be able to find further funding in the future.

Just when we need more experimentation and innovation to fight the virus, we risk getting less of it. This shows the value of the already announced Future Fund and more Innovate UK grants, and why the Government should be open to other ideas to ensure investors don’t lose their risk appetite. Research Director Sam Dumitiru has written a fuller (and better) explanation of the research on our blog.

Stuck in the middle
A lot of you are keeping us updated with how government support is working on the ground. One area that still seems to be of concern is the CBILS loan scheme. 

A founder recently got in touch to discuss their experience. Unlike many, they were finally approved at what they consider a fair interest rate, but their business was highly profitable before the crisis; they had strong relationships with the bank and a VC firm who helped advise on the application; they had an experienced finance team to create the complex scenario modelling required for the application and subsequent negotiations; and had enough money in the bank to deal with the time delays. 

This entrepreneur is concerned many others running great businesses won’t be so lucky. As he wrote: “Given all this I can see why the scheme has struggled to lend the amounts it expected. The story seems to have fallen down the news agenda given the success of the bounce back loans. However £50k isn’t enough to help much more than micro, owner-operated businesses and I worry that many businesses a level up from that will remain in a very difficult position regarding their access to financial support.” 

This gap in support is perhaps the one that should be of most concern for policymakers and one that we’ll be raising across with the Government. Let me know if you have any feedback from the coalface.

Power of the pack
Female entrepreneurs should sign up to Jess Etherington’s biweekly update. This week she is particularly keen to hear from entrepreneurs in Manchester, Birmingham, Cardiff, Edinburgh, Southampton, Leeds and Newcastle as part of our influential Female Founders Forum project that we run with Barclays. Read the latest newsletter here for more information, sign up here, and reach out to Jess with any questions about the project.

Read the whole thing here, and sign up here.

Power of the Pack

There is power in the collective impact of women banding together to support one another. For many of our Female Founders, the pandemic has presented unprecedented challenges, making strong female networks more important then ever. In our Mentoring Matters report we talked about how mentoring increased not only knowledge and skills, but importantly self-confidence. 

Our Female Founders have channelled the power of collaboration and raised each other up. We are seeing digital events being offered which go beyond technical content and focus on mentorship, well-being and stress management. 

In this week’s newsletter, we cover the important policy updates you should know about, including the UK Government's recently revealed COVID-19 recovery plan. We also provide some updates on the opportunities available to our Female Founders. We finish with a wrap up of news highlights from this week.
 

UK GOVERNMENT SUPPORT
 

This week, we cover policy updates related to the Government Support schemes on offer and the Government’s COVID-19 recovery strategy.  We would encourage you to check out the UK Government’s Coronavirus Business Support Hub for more information. Keep an eye out for our business resilience checklists, which we will be releasing in the coming weeks, for tailored support. 

1. COVID-19 Recovery Strategy

This week, the UK Government released its COVID-19 recovery strategy, setting out an indicative roadmap to “return life to as close to normal as possible, for as many people as possible, as fast and fairly as possible... in a way that avoids a new epidemic, minimises lives lost and maximises health, economic and social outcomes.”
 
The precise timetable for these adjustments will depend on the infection risk at each point, and the effectiveness of the Government’s mitigation measures like contact tracing. If you are interested in reading more about the three phases for reopening, check out our recent policy update.  

2. Top-Up Grant Funds Scheme

The UK Government has responded to concerns from SMEs who were not able to access the Small Business Grants Fund (SBGF) and the Retail, Hospitality and Leisure Grants Fund (RHLGF). The additional fund of £617 million is aimed at SMEs with ongoing fixed property-related costs. We covered this in our recent policy update.

Allocation of funding will be at the discretion of local authorities who have been asked to prioritise businesses in shared spaces, regular market traders, small charity properties that would meet the criteria for Small Business Rates Relief and B&Bs that pay council tax, rather than business rates. 

There will be three levels of grant payments:

1. £25,000 will be the maximum.
2. £10,000 grants will also be available.
3. Local authorities will have discretion to make payments of any amount under £10,000. (It will be for councils to adapt this approach to local circumstances.) 

You can check out more about the Top-Up Grants here and find your local authority here. 

3. Support for our Start-ups

In our previous newsletter, we covered the UK Government’s Future Fund, set up to support start-ups through coronavirus. The Future Fund will issue convertible loans of between £125,000 and £5 million to startups seeking bridge funding for working capital purposes. 

Our Member, Emma Sinclar, has written an open letter to Rishi Sunak, Chancellor of the Exchequer, calling on the HM Treasury to align the Future Fund with the Diversity Agenda. As Emma highlights in her petition, with only 1% of VC funding going to Female Founders in 2019, they are less likely to have raised the £250k required to receive support. The open letter urges the Chancellor to set an “aspirational target” for backing diverse founders, to ensure that the Future Fund does not set back the Diversity Agenda. 

4. Job Retention Scheme 

The UK Government has extended the Job Retention Scheme for 4 months, until October. There will be no changes to the scheme until the end of July, whereby the government will pay 80% of furloughed workers’ wages up to £2,500 per month. From August, the scheme will continue for all sectors and regions, but with greater flexibility to enable companies to bring furloughed staff back on a part-time basis. Employers will need to share with HMT the cost of paying employees' salaries. 

5. Bounce Back Loans

The Bounce Back Loan scheme for small businesses launched last week. The Government is guaranteeing 100% of the loan and there won’t be any fees or interest to pay for the first 12 months. You can borrow between £2,000 to £50,000. Barclays has launched their Bounce Back Loan Scheme, for more details click here.

BARCLAYS SUPPORT AND OPPORTUNITIES
 

1. Female Founders Forum - 2020 Events

In our previous newsletter, we announced the regional roundtable Eagle Lab events which will be kicking off in September. The events will be run either digitally or physically, depending on the lockdown guidance. We received a great response from Female Founders in Manchester, Birmingham, Cardiff, Edinburgh, Southampton, Leeds and Newcastle.

If you know of any female leaders in these regions, we would like to hear from you/them. Please get in touch or pass on my details jess@tenentrepreneurs.org.

2. Barclays Coronavirus Support Hub 

The Barclays coronavirus support hub provides the latest information, tools and guidance to support businesses throughout the COVID-19 pandemic. This hub includes information about Barclays products, webinars, Facebook live events and more information on how to access the government schemes. 

You can also download Barclays’ coronavirus checklist to support your business resilience planning throughout this period. There is also an updated FAQs section on this hub , which provides the latest information for businesses. 

3. Barclays Eagle Lab headline RE-Defined

Barclays Eagle Labs are this year’s headline sponsors of RE-Defined. A virtual conference celebrating the successes and resilience of female founders and underrepresented women in business across the UK.

Taking place on Friday 29th May the conference will include practical workshops, curated talks and a panel session featuring inspirational female founders and leading women in business. This is a ticket-only event – to secure your place click here.

FEMALE FOUNDER HIGHLIGHTS

Here is a quick wrap up of some of the news highlights, featuring our Female Founders. 

• Our FFF Member, Tugce Bulut, founder of Streetbees, spoke to The Times this week, about how quickly her staff adapted to home working, explaining that she is now considering permanent changes: “I don’t think we’ll ever resume full-time office work,” she said. “It’s important for the culture we don’t give it up entirely, but things will change forever.

• In an open letter to AWS’s CEO, our member, Emma Sinclair, called on the company to give oxygen to start-ups and scale-ups right now, by extending additional credits. Emma believes that Amazon is in a position to make a dramatic impact on the Global tech community. By giving out free credits, Emma believes, this will give struggling small businesses more runway. If you are interested in reading the letter, you can see it here.

• In an effort to support the struggling hospitality sector, our new Regional Member, Julie Grieve, has announced free use of Criton’s hotel guest engagement platform until 2021. Julie said to Insider: "it’s been very hard watching the impact of COVID-19 on the hospitality sector and all of the fantastic people who work in it”. 

• Our Member, Julia Elliott Brown, has been running a series of online Masterclasses, including a free Masterclass on Raising Investment in Challenging Times. These Masterclasses are aimed at supporting small businesses through through coronavirus. Julia has also been offering personalised support to female entrepreneurs with Enter the Arena’s Fundraising Academy.

• In order to help business owners manage their money more effectively, Felicia Meyerowitz Singh, founder of Akoni is providing its cash marketplace and tools for free to SMEs. You can register here for free for access to market-leading interest rate accounts, cash planning tools and tips.

We want to inspire female entrepreneurs across the UK. Do you know any inspiring female entrepreneurs? 

Connect them to me at jess@tenentrepeneurs.org and sign up to our Newsletter, which we send out every two weeks.

If you share content with the hashtag #femalefoundersforum, we will retweet you or repost it.

Policy Update: COVID-19 Recovery Strategy

Today the Government has released its COVID-19 recovery strategy. The plan is to “return life to as close to normal as possible, for as many people as possible, as fast and fairly as possible... in a way that avoids a new epidemic, minimises lives losts and maximises health, economic and social outcomes.”

Over the coming months, the Government will introduce a range of adjustments to current social distancing controls, aiming to time these according to both the current spread of the virus and the Government’s ability to ensure safety. This will happen in steps.

The government has set out an indicative roadmap, but the precise timetable for these adjustments will depend on the infection risk at each point, and the effectiveness of the Government’s mitigation measures like contact tracing.

Restrictions may be adjusted by the devolved administrations at a different pace in Scotland, Wales and Northern Ireland because the level of infection – and therefore the risk – will differ. Similarly in England, the Government may adjust restrictions in some regions before others: a greater risk in Cornwall should not lead to disproportionate restrictions in Newcastle if the risk is lower.

The text below are the most broadly relevant parts of the 60-page plan. The Government is due to share further details this week.

Step One – 13 May (Page 25)

"The changes to policy in this step will apply from Wednesday 13 May in England. As the rate of infection may be different in different parts of the UK, this guidance should be considered alongside local public health and safety requirements for Scotland, Wales and Northern Ireland.

"For the foreseeable future, workers should continue to work from home rather than their normal physical workplace, wherever possible. This will help minimise the number of social contacts across the country and therefore keep transmissions as low as possible. All those who work are contributing taxes that help pay for the healthcare provision on which the UK relies. People who are able to work at home make it possible for people who have to attend workplaces in person to do so while minimising the risk of overcrowding on transport and in public places. 

"All workers who cannot work from home should travel to work if their workplace is open. Sectors of the economy that are allowed to be open should be open, for example this includes food production, construction, manufacturing, logistics, distribution and scientific research in laboratories. The only exceptions to this are those workplaces such as hospitality and nonessential retail which during this first step the Government is requiring to remain closed.

"As soon as practicable, workplaces should follow the new “COVID-19 Secure” guidelines"... "which will be published this week. These will ensure the risk of infection is as low as possible, while allowing as many people as possible to resume their livelihoods.”

Step Two – 1 June (Page 30)

"Opening non-essential retail when and where it is safe to do so, and subject to those retailers being able to follow the new COVID-19 Secure guidelines. The intention is for this to happen in phases from 1 June; the Government will issue further guidance shortly on the approach that will be taken to phasing, including which businesses will be covered in each phase and the timeframes involved. All other sectors that are currently closed, including hospitality and personal care, are not able to re-open at this point because the risk of transmission in these environments is higher. The opening of such sectors is likely to take place in phases during step three, as set out below."

Step Three – 4 July (Page 31)

"The next step will also take place when the assessment of risk warrants further adjustments to the remaining measures. The Government's current planning assumption is that this step will be no earlier than 4 July, subject to the five tests justifying some or all of the measures below, and further detailed scientific advice, provided closer to the time, on how far we can go. 

"The ambition at this step is to open at least some of the remaining businesses and premises that have been required to close, including personal care (such as hairdressers and beauty salons) hospitality (such as food service providers, pubs and accommodation), public places (such as places of worship) and leisure facilities (like cinemas). They should also meet the COVID-19 Secure guidelines. Some venues which are, by design, crowded and where it may prove difficult to enact distancing may still not be able to re-open safely at this point, or may be able to open safely only in part. Nevertheless the Government will wish to open as many businesses and public places as the data and information at the time allows. 

"In order to facilitate the fastest possible re-opening of these types of higher-risk businesses and public places, the Government will carefully phase and pilot re-openings to test their ability to adopt the new COVID-19 Secure guidelines. The Government will also monitor carefully the effects of reopening other similar establishments elsewhere in the world, as this happens. The Government will establish a series of taskforces to work closely with stakeholders in these sectors to develop ways in which they can make these businesses and public places COVID-19 Secure."

COVID-19 Secure Guidelines (Page 25)

“Many measures require the development of new safety guidelines that set out how each type of physical space can be adapted to operate safely. The Government has been consulting relevant sectors, industry bodies, local authorities, trades unions, the Health and Safety Executive and Public Health England on their development and will release them this week. 

"They will also include measures that were unlikely to be effective when the virus was so widespread that full stay-at-home measures were required, but that may now have some effect as the public increase the number of social contacts – including, for example, advising the use of face coverings in enclosed public areas such as on public transport and introducing stricter restrictions on international travellers. 

"Many businesses across the UK have already been highly innovative in developing new, durable ways of doing business, such as moving online or adapting to a delivery model. Many of these changes, like increased home working, have significant benefits, for example, reducing the carbon footprint associated with commuting. The Government will need to continue to ask all employers and operators of communal spaces to be innovative in developing novel approaches; UK Research and Innovation (UKRI) will welcome grant applications for proposals to develop new technologies and approaches that help the UK mitigate the impact of this virus.”

Sign up for further Policy Updates here.

Innovation when the market cools

Until recently, venture capital was booming in the UK. In 2011, VCs invested £1.6bn in startups and scale-ups. By 2019, the value grew almost tenfold to £12bn. Over the same time period, the number of equity deals made trebled.  Yet, COVID-19 has brought the good times to an end. Equity investment fell sharply in Q1 and Q2 is expected to be even worse. It raises the question, what happens to innovation and entrepreneurship when the market cools.

The conventional wisdom about ‘hot markets’ is that they draw in dumb money and investor discipline falls. As a result, startups that have almost no chance of succeeding end up getting funded. On this view, we’re more likely to get a Juicero when money is easy. When times get tough, VCs will still invest in the startups they believe in, but will pull funding from the startups least likely to succeed.  

This is the glass half-full take. If true, then we should be somewhat relaxed about a collapse in VC funding. The startups with the best prospects should still get funded. Someone on this side of the debate might note that over half of the companies on the Fortune 500 were founded during a recession. 

But I’m sceptical. A key feature of VC investing is that VCs don’t know which startups will succeed and which will fail. A US study found that 60% of VC investments return less than their cost to the VC and the vast majority of VC returns are generated by just 10% of investments. If VCs could easily spot which were which, then they wouldn’t invest in the 60% in the first place. They might, however, change their risk profile and go for safer bets when the market cools, accepting they might miss out on the next Facebook. 

A study by two Harvard economists, Ramana Nanda and Mathew Rhodes-Kropf, puts the conventional wisdom around ‘hot markets’ to the test. Are startups funded in booms more likely to flop?  

The answer is yes, but the ones that do succeed IPO at higher values, patent more, and patent better (i.e. their patents are cited more by other businesses). The study, which controls for the fact that boom markets might be driven by better investment opportunities, finds that when a market is hot, VCs take a riskier approach 

The result isn’t driven by ‘dumb money’ entering the market either. When they control for individual investors, they find they still adopt a riskier portfolio. 

So why are risky innovative businesses more likely to get funded during a boom? Nanda and Rhodes-Kropf are strong believers in the value of experimentation. Hot markets enable more experimentation because they reduce the risk that a start-up won’t be able to find further funding in the future.

As a result, VCs don’t have to make large up-front investments and can instead make smaller but more frequent bets. It is the investing equivalent of the Silicon Valley slogan: ‘strong ideas, weakly held’. 

In this downmarket, many viable firms will still be funded. But we might see fewer riskier bets – fewer experiments. Innovative startups working with risky, untested technologies will find it much harder. Many will fail, even more than usual. 

This should worry us as innovators rarely capture the full value of their innovations. Entrepreneurs are often standing on the shoulders of giants, building on past innovations.  It shows why interventions such as the Future Fund are needed. Otherwise innovation risks being another victim of COVID-19.

After Furlough

In many ways, the initial economic response to coronavirus was the easiest bit. Throw a lot of money at the problem and try to save as many businesses as possible. This job is far from over, but the next step will be harder: getting areas of the economy (when it’s safe to do so) back up and running.

In its initial reaction, some governments have responded better than others. For the UK, one policy that has worked remarkably well has been the Job Retention Scheme. While in America, the unemployment rate has passed 20%, the opportunity to furlough staff has kept the UK rate at around 4%, for now at least. The Bank of England expects this to double to around 9% in the second quarter, but a lot will depend on how the government unwinds the scheme.

The option to furlough was exactly the right policy to deal with the extreme uncertainty. Without it “perfectly viable firms would have had to sack perfectly competent workers doing perfectly good jobs.” However, with a third of the potential workforce now not working and receiving government financial support, this scheme simply isn’t – and was never meant to be – sustainable. Some of these jobs won’t be viable without government support making the unwinding of the scheme both necessary and painful.

The government is expected to phase the scheme out by sector, depending upon how restrictions are impacting businesses. One challenge will be delineating sectors – for example, what happens to a PR firm that only works with clients in the hospitality sector? Or a manufacturing firm that supplies products to large conferences or festivals? Drawing the boundaries between those that are supported and those that aren’t is an unenviable task.

The government is looking at more flexibility in the transition (as many entrepreneurs have asked for). The economist Jonathan Portes suggests that when the scheme is ended in some sectors, individuals and firms could be offered a choice – either a lump-sum grant to the worker, or ongoing (but time-limited) financial support for short-time working. Portes also suggests wage subsidies for new hires – either of formerly furloughed workers or the unemployed to promote job creation in growing sectors.

There are no easy answers, but let me know your thoughts on how so we can represent your views in conversations we are having with government.

Future Fund Tweaks
As reported in Sifted, the details of the Future Fund are still being thrashed out. The Future Fund will be an invaluable lifeline for entrepreneurs whose businesses aren't suitable for the loan schemes, but we would like a few tweaks to ensure more entrepreneurs are able to benefit from it.

To open it up to more entrepreneurs, the amount a business owner needs to have previously raised should be reduced from £250,000 to £100,000 and investments through the Enterprise Investment Scheme should qualify so angel investors are incentivised to use it. In addition, the length of investment should be increased from three years to five years for funds that want to access the scheme through Venture Capital Trusts. Watch this space.

Procure Meant 
Tussell has released insightful data on the impact of coronavirus on public procurement. There has been a dramatic drop in public sector opportunities, with fewer than 900 invitations to tender published, down 66% in April compared to February. That said, the public sector has published 141 contracts worth £433m directly relating to its Covid-19 response, and this only scratches the surface as the government is reaching out directly to suppliers given the need for speed.

As the report recommends: “While public procurement is usually guided by competition regulations, in emergency situations such as this the public sector are able to directly award contracts relevant to their response to the crisis. If you think you can help the response to Covid-19, consider reaching out directly to public bodies to offer your services.” Find out more here.

Hive Mind
I’ve been invited to create a short top tips video on how entrepreneurs are dealing with coronavirus for the NatWest Business Hub. Who better to ask than a network of thousands of entrepreneurs? If you have any tips you would like to share with other businesses, let me know and I’ll quote you and your business for the video.

Read the whole thing here, sign up here.

Bouncing Back

The big news this week was the announcement of bounce back loans – the new 100% government backed loan scheme for small businesses. 

Businesses will be able to borrow between £2,000 and £50,000, with loans interest free for the first 12 months. The Government has also ordered banks to agree upon an industry-wide interest rate of less than 3% (the rumour is 2.5%). The scheme will launch for applications on Monday.

Loans shouldn’t be the only offer on the table. And they aren’t for businesses operating out of premises that have a rateable value up to a maximum of £15,000 who get £10,000 grants, and companies in the retail, leisure and hospitality sectors with a rateable value of between £15,000 and £51,000 who get £25,000 grants. (You can check whether you're entitled to a grant here.) However, as the FT reports (paywall), there are more than 10,000 small businesses in England that are missing out because they are based in shared offices.

The problem arises because the Government is forced to rely on existing systems to target support. In the short term the Government needs to find better workarounds to deliver fairly to everyone (something we will continue to work upon), but in the medium term we need reforms so we are better prepared.

I've written for Forbes on why Estonia's digital state was better prepared than many countries for dealing with the impact of coronavirus. The article explains why we have something to learn from them on digital healthcare, welfare, cabinet, voting, education, justice, and much more. The Estonian system isn’t perfect. For example, it lags behind the UK on innovations like Open Data. But decades of reforms have made Estonia less fragile than many to the pandemic.

Calling all Female Founders
We’re gearing up for a flurry of activity with our Female Founders Forum project that we run with Barclays.

As my colleague Jess Etherington explains in our latest Female Founders Forum newsletter: “We are launching regional roundtable Eagle Lab events across the UK. It is an ambitious, far-reaching programme that will bring our tried and tested formula of events from London to Manchester, Birmingham, Cardiff, Edinburgh, Southampton, Leeds and Newcastle.”
 
We will address four “scale-up” topics, with each roundtable focusing on a particular theme and provide you with more details about the events in our upcoming newsletters. The first event is due to kick off in September and will either be a physical or digital event, depending on local conditions and the lockdown.

If you want to get involved, get in touch with Jess, and please forward this email on to anyone you think might be interested. Sign up to the Female Founders Forum newsletter to be kept up-to-speed with all the work.

Good Hospitality
A row has been brewing between companies and insurers on what is covered under insurance policies. The FCA is asking the courts to get involved (paywall). Separately, the Hospitality Insurance Group Action (HIGA) has just been launched. Hospitality sector policyholders can register their details on the HIGA website if they would like Mishcon de Reya to conduct a review of their business interruption policies. The review will be free of charge. The firm will then ascertain which policyholders have coverage in principle to assess the viability of a group action against insurers.

Read the whole newsletter here, and sign up to the Newsletter here.

Supporting Our Female Founders

The UK’s female leaders have been tenacious in their response to the coronavirus (COVID-19) pandemic. While physical doors may be closed for the foreseeable future, digital opportunities are opening up. 
 
In this uncharted territory, networks of female mentors have become more important than ever. As we highlighted in our Mentoring Matters report, mentoring is one of the best ways women can help other women, especially through a crisis. Virtual events have become a means to connect female founders and a source of advice and support. Instant messaging tools like Slack and Whatsapp as well as video conferencing tools like Zoom have taken centre stage as tools to assist female leaders to maintain morale and sustain business operations. 
 
In this newsletter, we will be covering the Government support and grants you should know about. We will also be sharing some upcoming webinar series and online events that you may be interested in, as well as news highlights we think might support you and help to drive your business forward after lockdown. 

GOVERNMENT SUPPORT
 
We know that financial help is vital to help support our female leaders who are struggling with the challenges of the coronavirus outbreak. The UK Government has created a new Coronavirus Business Support Hub. Here are some of the schemes on offer to help you and your business cope. We will be updating you on new schemes and changes to the schemes in our policy updates. 

1. Bounce Back Loans
 
This week, the UK Government announced the Bounce Back Loan scheme. The scheme will be delivered through a network of accredited lenders and help small and medium-sized businesses borrow up to £50,000 or 25% of turnover, whichever is lower. The scheme is not available yet. It will launch on 4 May 2020.

2. Coronavirus Business Interruption Scheme
 
Banks are helping SMEs by providing the financial backing they need through the government-backed Coronavirus Business Interruption Scheme (CBILS). CBILS is a term loan product offered in conjunction with the UK Government and the British Business Bank. A government guarantee is issued in favour of the lender, which allows banks to consider lending to viable businesses affected by coronavirus. 
 
The scheme is designed to support UK SMEs with a turnover of less than £45 million. You can find out more details and check your eligibility for the scheme here. 
 
For businesses with turnover greater than £45 million, you may be able to obtain the financial backing you need through a Coronavirus large business interruption loan.
 
Barclays is one of the accredited lenders. You can find out more here.
 
3. Support for our Start-ups
 
The UK Government has announced a £1.25 billion package to support start-ups through coronavirus. The Government’s Future Fund will issue convertible loans of between £125,000 and £5 million to startups seeking to bridge funding for working capital purposes. 
 
The funding must be matched by private investors and the Government will provide no more than 50% of the funding. The loans will convert to equity at the next fundraising round at a 20% discount, or a higher rate if the private investor demands it. The scheme will launch in May and remain open until September. You can find out the full details here.
 
4. Coronavirus Job Retention Scheme
 
The UK Government is also providing support through the Coronavirus Job Retention Scheme, reimbursing 80% wages, up to £2,500 per month, for employees on temporary leave (Furlough) due to coronavirus. Any entity with a UK payroll can apply, including businesses, charities, recruitment agencies and public authorities. 
 
The Scheme will be backdated to 1 March and available for at least three months. The online service was launched last Monday.
 
5. Self-employment Income Support Scheme
 
Self-employed people are eligible for a taxable grant, worth up to 80% of their average monthly profit over the last three years, up to £2,500 per month, for at least the next three months. You can find out more details about the scheme here.
 
6. Statutory Sick Pay
 
The cost of providing 14 days of Statutory Sick Pay per employee will be refunded by the Government in full to businesses with fewer than 250 employees. This will provide two million businesses with up to £2 billion to cover the costs of large-scale sick leave.

BARCLAYS SUPPORT AND OPPORTUNITIES 
 
1. Barclay Coronavirus Support Hub 
 
The Barclays coronavirus support hub provides the latest information, tools and guidance to support businesses throughout the COVID-19 pandemic. This hub includes information about Barclays’ products, webinars, Facebook live events and more information on how to access the government schemes. 
 
There is also an updated FAQs section on this hub, which provides the latest information for businesses. 
 
2. Barclays webinars 
 
You may wish to register here for an upcoming Business Resilience through coronavirus webinar looking at the challenges and support businesses require throughout this period. 
 
Alternatively, to find out more about the latest UK Government support packages for startups and scaleups, register for this webinar later today at 2pm with the Barclays team. 

This week, Juliet Rogan explains in a short video guide to Barclays Eagle Lab how the UK Government’s Future Fund will work. She looks at some of the details including convertible loan notes, interest rates and conversion processes. 
 
3. Checklist for Businesses - Dealing with coronavirus disruption 
 
Barclays has put together a checklist with practical guidance and useful resources to support you and your coronavirus business planning. You can check out the checklist here.
 
4. Female Founders Forum - 2020 Events
 
We are launching regional roundtable Eagle Lab events across the UK. It is an ambitious, far-reaching programme that will bring our tried and tested formula of successful think tank events from London to Manchester, Birmingham, Cardiff, Edinburgh, Southampton, Leeds and Newcastle. 
 
We will address four “scale-up” topics, with each roundtable focusing on a particular theme and provide you with more details about the events in our upcoming newsletters. 
 
The first event is due to kick off in September and will either be a physical or digital event, depending on local conditions and the lockdown. 
 
If any of these locations are convenient for you, or you know of any female leaders in these regions, we would like to get in contact. Please get in touch or pass on my details jess@tenentrepreneurs.org.
 
5. DIT Global Entrepreneurship webinars 
 
The Department of International Trade (DIT) is offering free webinars to UK Companies with experts presenting for 25 minutes and answering your questions to help you find solutions to the issues you are facing. You can sign up for the upcoming webinars here and view the previously recorded webinars here
 
FEMALE FOUNDER HIGHLIGHTS
 
Our Member Debbie Wosskow is taking AllBright's services online, with a series of new digital events aimed at turning self-isolation into career development. Debbie recently spoke with Monocle, urging women to “take on an entrepreneurial mindset”, discussing how this has enabled Allbright to pivot in real time and how other female led businesses can do the same.
 
Alexandra Daly, one of our Members and founder of AA Advisors, is developing digital solutions, including a series of podcasts, to assist clients as they seek to maintain dialogue with investors. Alexandra recently spoke with Private Equity Wire about how “people are hungry for information, but feel physically isolated due to Covid-19”. In Alexandra’s view, podcasts to communicate with LPs will be used by managers over the long term. Looking to the revival stage after the coronavirus pandemic, Alexandra discusses how she sees podcasts as a way to streamline the introductory process and could be used as an efficient way to raise capital.
 
Our Member, Annabel Karmel, whose children’s recipes are prepared by the Yum Yum Food Company, has set up a campaign to supply free, good quality food to NHS workers and vulnerable people.
 
Leah Hutcheon, founder of Appointedd, an online booking and business management software firm, is offering SMEs free access to their products to deal with clients and promote social distancing measures. Leah has been impacted by the crisis and wanted to “support those small businesses who had been worst affected”. 
 
Journolink, a business co-founded by Gemma Guise, is providing free services to SMEs to share their stories about how they are coping with the challenges of Covid-19 with journalists and broadcasters.
 
We want to inspire female entrepreneurs across the UK. Do you know any inspiring female entrepreneurs? Send them through to jess@tenentrepeneurs.org.

We will be sending through our newsletter every two weeks. If you share content with the hashtag #femalefounderforum, we will retweet you or repost it.

Subscribe to out Female Founders Forum email here.

Meet Your Match

On Monday the government announced the Future Fund, which will provide convertible loans to UK-based companies ranging from £125,000 to £5 million, subject to at least equal match funding from private investors. The loans will convert to equity at the next fundraising round at a 20% discount, or a higher rate if the private investor demands it.

An equity solution was a key ask of the Save Our Startups campaign, and while there are legitimate quibbles about the details – some of which will be worked out when the terms are updated – the alternative might have been no support at all.

Many startups won’t qualify, which is why the requirement to have raised £250k should be lowered to £100k. As Beauhurst has calculated: “That’s still a substantial enough hurdle for due diligence purposes whilst allowing another 2,302 of the most promising seed stage companies to participate.”

The Future Fund will launch in May. You can find the provisional headline terms here, Form Ventures has a useful explainer here, and on 30th April Digital Catapult has a webinar on how to access it which you can sign up for here.

Another Save Our Startups ask was the fast-tracking of payments to startups from public funding schemes. To this end, it was also announced that Innovate UK will accelerate £200 million of grant and loan payments for 2,500 existing Innovate UK partners on an opt-in basis, with an extra £550m available to increase the support on offer for these existing partners, and a further £175,000 for around 1,200 firms not currently in receipt of Innovate UK funding.

Sign up to our Policy Updates to get more details of both schemes as soon as they’re announced.

Satisfactory guarantee?
Last week’s rumour was around the imminent Future Fund. This week it’s the more public rumour that the Treasury is considering a 100% guarantee on loans up to £25,000. This is closer to the Swiss model, which we have previously called for. But as James Hurley of The Times cautions in a tweet: “On its own, a 100pc guarantee is not the incentive to lend with lighter checks many think it is. The guarantee is for individual loans, not the whole book. Book cap is 60pc. Also, the guarantee can only be claimed after the bank's own recovery action, not at point of default.” 

As the government tries to get to grips with the businesses still falling through the gaps in funding – just take a look at the #forgottenltd hashtag for a flavour of this – they’re going to need to start grappling with a new dimension of complexity. When lockdown restrictions are eased, some industries will be back up and running before others. 

We think the government needs to start communicating with businesses about its priorities for easing, and the policy leavers it will use to support those at different stages. Why would a pub owner, for example, take on a loan when it is possible that they will be shut for six months or more?

Of course, clarity on timeframes is impossible at this stage. But more clarity on the latest thinking on processes and priorities would be welcomed by business owners as soon as it’s available.

Environmental goals 
Following our successful partnership with the Enterprise Trust on the Unlocking Growth report, we’re pleased to announce that we’re undertaking another report – this time on the way that entrepreneurs and government can support environmental goals.

For the first stage of this project we’re inviting a small group of entrepreneurs and policy experts to become advisers to guide and promote the research. The project will audit what is already being done to support the environmental objectives, to what extent they are effective, and what might be done differently. 
 
Alongside the more technical overview, we will interweave case studies of companies that are innovating in the environmental sector. This would tease out both specific challenges of the sector (e.g. applying for grants, selling into government etc.), as well as general challenges of scaling innovative companies.

If you’re keen to get involved, drop the author Eamonn Ives an email to introduce yourself.

Read the whole thing here, and sign up here.

Finding the Next Brunel

Nowadays, the UK tends to take a build-it-and-they-will-come approach to attracting the world’s top scientific and innovative talent. We find ways to lower barriers to entry and make the country generally more attractive to skilled immigrants. But there are potential lessons from the past: beyond just liberal immigration rules for skilled workers, the UK has a long history of proactively identifying and persuading skilled workers to settle in the country – a policy that we might call promigration.

In the sixteenth century, for example, the government actively sought the services of foreign workers who might introduce new industries. Lacking local expertise to mine and refine copper, zinc, and silver, it arranged for hundreds of German metallurgists and their families to come to the country, with the eventual result of kick-starting Britain’s copper and brass industries. The foreign workers were granted denizenship rights by letters patent, and patent monopolies were granted to the companies that employed them. Even the go-betweens, who identified the relevant workers in Germany and arranged for their travel to England, were rewarded with lucrative lifetime pensions. After all, knowing whom to attract, especially when such industries were almost entirely absent in England, was an important skill too.

In the 1620s, too, skilled civil engineers like Cornelius Vermuyden were invited from the Netherlands to undertake the levelling of the Fens. Although the Fens project itself initially fell through, Vermuyden was apparently persuaded to remain by being given other commissions, and was naturalised as an English subject in 1624 – something that at the time would have required a special Act of Parliament. He was also soon knighted, and in the 1630s able to use his influence to obtain the denization of other Dutch workmen for new drainage projects.

Yet Britain was not alone in its promigration policies. In the 1710s, the Russian state actively enticed English ironworkers and steelmakers, and the French state used a go-between, Henry Sully, to bring English watchmakers and metallurgists to France by offering high wages and other perks. Many of those who left were manufacturers who had fallen into debt, and leapt at the chance for free travel abroad, thereby escaping their creditors and at the same time obtaining secure employment. With Britain having by this stage obtained a reputation for skilled mechanical work and metallurgy, these emigrations became a major source of concern for the state. In 1719, the government even banned the emigration of skilled artisans. This is obviously not something to emulate, and it was ineffective in any case, but the government spent vast sums ensuring that those who had already emigrated to France could be persuaded to return, paying for their travel, suspending their punishments under the new law, and even helping them negotiate their debts with their creditors back home. They even rewarded Henry Sully, the French enticer-in-chief, for turning re-enticer for the British.

Even with the UK’s unquestioned place at the forefront of mechanical engineering in the nineteenth century, the government was well aware of the tensions over talent. Indeed, had it acted less, then Isambard Kingdom Brunel might have become a famous Russian engineer, rather than a British one. His father, Marc Isambard Brunel, had fled the French Revolution first to America, and was then persuaded to move to the UK. But by the 1820s, when his son was still a teenager and off studying in France, Marc Brunel was imprisoned for debt. When it was made known that he was in talks with the Russian authorities about emigrating there, the Duke of Wellington and a few influential MPs persuaded the government to pay off his debts and get him released from prison, on the condition that he stay in the country. Had the government not intervened, it seems likely that young Isambard upon graduating would have either remained in France or re-joined his family in Russia rather than returning to England.

So what could the UK today learn from this history? The government of course already attempts to lower barriers to entry, for example with its Innovator, Start Up, Global Talent, and Investor visas. Some of these visas have had their flaws – in the first quarter since the Innovator visa route opened, for example, only two applications were successful, and some of the endorsing bodies have already begun to drop out – but the creation of these new routes shows that the government is serious about making itself attractive to scientists and inventors. There are simply details that need ironing out. Otherwise, the UK has tried to make itself more attractive to foreign innovators, for example by creating regulatory sandboxes in which companies can legally experiment with cutting-edge technologies like drone deliveries. The Enterprise Management Incentive scheme, which allows stock options to be taxed as capital gains, rather than as income, also makes it easier for UK startups to compete for talented managers with the much higher wages on offer in Silicon Valley. (Though in this case, in order to remain competitive, the maximum assets and number of employees that companies should have in order to qualify for the scheme should be raised substantially).

In terms of actual promigration policies, however, which are more proactive in identifying and encouraging people to move, there are far fewer examples today. One of the few might be the Global Entrepreneur Programme, which offers foreign entrepreneurs some assistance in relocating their companies’ headquarters to the UK, along with connecting them with experienced entrepreneurs to act as mentors, and providing introductions to networks of investors. Its success stories include the investment management company Nutmeg, which relocated from Silicon Valley, and the Australian train travel app Seatfrog. But it’s unclear to what extent the programme responds to requests – a more passive role – or actively identifies and persuades particular individuals and teams to move from abroad.

If history is any guide, then more could be done. One lesson is that the people who identify foreign talent and then arrange for them to immigrate should also be rewarded. It is a simple matter of incentives. Another lesson is that governments can attract foreign inventors, scientists and engineers by hiring them directly. This was done in the sixteenth and seventeenth centuries, and was the model pursued by the US and the USSR after the Second World War, when thousands of German engineers were persuaded to move (though in the Soviet case, forcibly). On the American side, among the 1,600 individuals who immigrated were many of the chief architects of its space programme, including Wernher von Braun. When the government itself does the hiring, potential immigrants are less likely to be fazed by the bureaucracy of visa applications. Likewise, the same might be done by private institutions with sufficient gravitas. The sixteenth-century Company of Mines Royal, for example, albeit a private company, had explicit backing from the government. And more recently, the Institute for Advanced Study, based in Princeton, New Jersey, actively recruited researchers who were fleeing European fascism in the 1930s. It became especially attractive to top researchers by not directing their studies, and by giving them no teaching responsibilities. As a result, it can boast having had two thirds of Fields Medallists and 34 Nobel Prize winners.

Whether or not such institutions can be replicated in the UK again, the government will have to step up its efforts if it is to remain competitive. Other countries are catching up on the tax treatment of stock options, while places like Singapore have been using promigration policies for decades. Singapore even came close to poaching companies in one of the UK’s most developed sectors: the Horsham-based company Creative Assembly, famous for making the Total War franchise of video games, actively considered moving in the late 1990s. The UK must look abroad, and to its own past, if it isn’t to lose out on a future Isambard Kingdom Brunel.