Stacks Up

We produce a lot more than Perennial Gale — and if you don’t already follow our other Substacks, this is a good week to see what you’re missing.

Over on Network Effects, Mann Virdee sat down with Mollie Claypool, co-founder of AUAR, whose deployable robotic micro-factories aim to do what decades of housing policy have failed to do: make housebuilding faster and cheaper.

Also on Network Effects, our fortnightly Three Big Ideas covered why Europe’s most ambitious startups keep ending up in Delaware (and whether we should care), the state of Britain’s quantum bet and what happens when crime really doesn’t pay. We sometimes take ideas from outside, so drop us an email if you have a big idea you want to pitch.

And finally, if you care about what Parliament is actually doing on entrepreneurship policy, Eamonn Ives’ monthly APPG for Entrepreneurship newsletter is a must-read. It includes key quotes from ‘In Parliament’, so you don’t need to go digging through Hansard, plus a rundown of the Government’s current consultations and calls for evidence.

JVF Female Founder Ambition Series

As many of you will know, we have run our Female Founders Forum with Barclays for over a decade. It has been our most enduring project — watch this space to find out what’s next for us later in the year.

Today, we are announcing something separate to the Female Founders Forum — but which is testament to its ongoing impact: a partnership with the Jessica Vollman Foundation, a non-profit founded to honour the legacy of the late founder, CEO and advocate for women in entrepreneurship, Jessica Vollman.

Sarah Vollman and her father Mike Vollman — a technology executive who has founded and funded companies, taken them public, and now advises emerging AI companies and female founders — join The Entrepreneurs Network as Advisers as part of the partnership.

The series comprises three off-the-record virtual roundtables, each focused on a different stage of the scaling journey, and all chaired by Kajal Sanghrajka. Insights will feed into interviews for Network Effects and a briefing paper. We’re also planning a launch, so let me know if you’re keen to host it.

The first virtual roundtable is for founders in the earlier stages of growth — those with the drive, the idea and the question of how to scale still in front of them. The second is for founders already moving fast, navigating the capital, team and personal pressures that come with rapid expansion. The third is for founders operating — or seriously planning to operate — on both sides of the Atlantic.

Talkin’ bout GEN

Many of you will already know about the Global Entrepreneurship Network (GEN). Where it leads, many follow. And I’m delighted that its founder and president, Jonathan Ortmans, has joined us as an Adviser. Jonathan has been an inspiration and support to many ecosystem builders around the world, including me. For instance, GEN is supporting the JVF Female Founder Ambition Series.

I hope you’ll forgive me for putting my modesty to one side when I share his kind words about why he supports us, and our collective modesty to one side about why he is bullish about the UK:

“I support The Entrepreneurs Network mostly because it is authentic. At GEN, we are exposed to literally thousands of organisations around the globe promoting entrepreneurship, but Philip Salter’s writings and the community he convenes are precise, on point, and always worth the read.

I also remain bullish about entrepreneurship in the UK. There is a certain no-nonsense honesty to British risktakers. Beyond being a Britisher myself, GEN was born from the communities that celebrate Global Entrepreneurship Week, which was created in the UK as Enterprise Week so many years ago by then-Prime Minister Gordon Brown.”

Built to Scale

In our latest interview for our UK AI Fieldbook series, Mann Virdee speaks to Mollie Claypool about how AI and deployable robotics can break the deadlock of the global housing crisis.

Three Big Ideas #58

Three Big Ideas is our fortnightly roundup of ideas (and our takes on them) in entrepreneurship, innovation, science and technology, handpicked by the team.

This week, Philip Salter looks into the data behind Europe’s fleeing founders, Eamonn Ives discusses a new paper on gig work and crime, and Mann Virdee examines the changing capabilities of quantum computing.

Three Big Ideas #58

🌍 Philip Salter, Founder

Is Europe losing its startups? That’s the question addressed in a new paper from the EU’s Joint Research Centre. The answer, of course, is yes: around 3.3–4.3% of European VC-backed startups relocate their headquarters abroad — roughly 10 times the rate of comparable non-VC-backed firms.

The United States dominates as a destination, accounting for around three quarters of moves, with San Francisco, Boston and New York the favoured landing spots. The picture is more nuanced than the headline suggests, though, as 97% of relocations are partial, meaning firms keep operations in their home country, and in a quarter of cases the CEO doesn’t move. Perhaps most concerning, relocation is concentrated in the earliest years. Nearly half of firms leave within their first three years, before they’ve had a chance to embed locally through hiring or R&D, and this is skewed towards asset-light sectors like IT — precisely the high-value, high-growth industries Europe most wants to keep.

The most ambitious firms are the most footloose, with other research cited finding relocation rates of around 13% among larger scaleups and nearly 30% among unicorns. The primary driver is that US investors frequently require — or at least prefer — a Delaware-incorporated parent as a precondition for funding.

Whether this amounts to a serious loss is genuinely unclear. On the one hand, a Delaware flip might allow a firm to raise the round that creates hundreds of jobs back home; or it might be the first step in a gradual shift of gravity westward. Research cited in the paper suggests that around 65% of the workforce ends up in the country of relocation among firms that eventually IPO, but without US funding there might never have been an avenue to scale.

For the UK, the picture cuts both ways. Britain is the second most popular destination for relocated European startups, capturing around 7% of moves — a reflection of genuine strengths in the UK’s entrepreneurial ecosystem. That shouldn’t be surprising: our own research finds that 54% of Britain’s 100 fastest-growing companies have a foreign-born founder or co-founder, drawn from 29 countries across every continent bar Antarctica.

Policymakers in the UK — and actors in our entrepreneurial ecosystem — might be best focused on competing for a larger share of the startups that are going to move anyway. To that end, the Migration Advisory Committee is currently reviewing the Global Talent and Innovator Founder visa routes. Ease of movement won’t solve everything — there are many building blocks we need to put in place — but getting the visa regime right is a necessary condition for the UK to make the most of its position as Europe’s most attractive destination for mobile entrepreneurial talent.

🚔 Eamonn Ives, Research Director

I’ve written previously for Three Big Ideas about evidence suggesting that the gig economy helps to both lower unemployment and boost entrepreneurship. This week, more data emerged that further buttresses the case for gig work. In a new paper, the authors show that the rollout of Deliveroo and Uber Eats in France between 2015 and 2019 caused a reduction in crime rates.

Overall recorded crime falls by 3% following a platform’s entry to a local labour market, but there is an especially steep decline in ‘low-skill property crime’ — such as shoplifting and street robberies. There is little impact on ‘high-skill property crime’ — such as burglary and vehicle theft — but that result, if anything, bolsters the theory the authors put forward. Gig work is disproportionately performed by young men with limited formal qualifications, or people who face labour market discrimination such as migrants. By offering these individuals an opportunity to earn an honest living, platforms reduce their ‘need’ to engage in acquisitive crime. This is standard rational choice model thinking, as first espoused by criminal economists like Gary Becker over 60 years ago, which states that when legal work becomes more accessible, the opportunity cost of offending rises.

Beyond this, the paper also shows how the spread of gig platforms correspond with a reduction in vandalism and drug crime, because, the authors explain, “[t]hese offences are disproportionately committed by adolescents and young adults and tend to be concentrated in the evening and weekend hours that delivery shifts occupy.”

As noted above, plenty of evidence now exists of the purely economic benefits of gig work, especially for marginalised people. What’s interesting about this study, however, is how it illustrates how gig work has positive, broader societal impacts too. It raises the question of what other virtuous effects such platforms might be having on society, and implores policymakers to weigh these accordingly when regulating them.

⚛️ Mann Virdee, Head of Science and Technology

There are some technologies that seem to be perpetually on the periphery of productive commercial use. The running joke for nuclear fusion is that it’s always 30 years away. For quantum, it’s usually 10 years away. I was thinking about this yesterday as I visited Oxford Quantum Circuits (OQC), a spinout from the University of Oxford’s Department of Physics that’s about to raise a Series C.

Earlier this decade, the quantum computing industry went through a bit of a crisis of confidence and there was frequent talk of a ‘Quantum Winter’. But that’s perhaps a natural response to the quantum hype and those labelling the technology ‘bigger than fire’.

At the time, the industry was focused on increasing the number of qubits (quantum bits) in a quantum computer without the need for full error correction (which protects quantum information from errors). But it soon became clear that tackling the source of those errors, noise, was critical to opening up productive applications of quantum computing.

To be clear, there are still sceptics who believe that quantum computing cannot deliver on its promises. But a pivot towards fault-tolerant quantum computing has led to a measured and widely-shared increase in confidence about its near-term utility and the need to prepare for a world with quantum computers.

A blog last week from Google Research suggests that quantum computers could break cryptocurrencies sooner than previously predicted. They argue that there is still time for blockchains to migrate to post-quantum cryptography to ensure they are resilient to quantum attacks, but that time window is shrinking.

The deadline to prepare for quantum computers and the capabilities they will begin to unlock has been brought forward to 2029. That’s not to say we will have fully productive quantum computers by then, but that firms should be prepared.

Some applications such as fraud prevention are likely to be the lowest hanging fruit for quantum computers and can be tackled in the coming few years in the range of millions of operations. As that progresses to billions and trillions, it should open up other applications such as drug discovery.

The UK is well placed to capitalise on this. The Government recently announced funding of up to £2 billion to support the development and commercialisation of quantum technologies, and help strengthen Britain’s quantum pipeline. With the creation of our new Science and Technology Forum, we’ll be doing our part to support founders in quantum and across all areas of science and technology in growing and scaling their businesses.

Hire Purpose

There are many advantages to reaching a large, smart and entrepreneurial audience through this newsletter each week. One of the most valuable is that, whenever we’re hiring, I can rely on you to share opportunities widely. Now is your time to shine — we’re on the hunt for a new researcher to join our team.

In this role, the successful candidate will have the chance to quickly build a public profile, access rooms that are closed to most and do work that genuinely moves the needle. If you’re self-motivated, care deeply about what we do and have an entrepreneurial spirit — or know someone who fits the bill — all the details are here.

We are, if I may say so, a small team that punches well above its weight in the think tank world — producing policy reports, engaging policymakers and helping shape the agenda on the issues that matter most to Britain’s founders.

To that end, please consider forwarding this on; liking, commenting on, or reposting my LinkedIn post; and doing the same with Eamonn Ives’ post on X to help to ensure the opportunity reaches the right people. The stronger our talent, the more effective we will be in making it easier to start and scale a business in the UK.

Beyond Infinity

Innovation is a hallmark of our species, and the entrepreneurs who channel it are the architects of the modern world. To support those pushing the frontiers of science and technology, we are launching a new Science and Technology Forum within The Entrepreneurs Network.

Led by our Head of Science and Technology, Mann Virdee, the Forum will serve as a dedicated platform for science-focused entrepreneurs in Britain, helping to bridge the gap between the lab, the boardroom and Westminster. Our aim is to make the UK the leading global destination to start and scale a science-led business.

The Forum will focus on the UK’s priority sectors — including AI, quantum technologies, engineering biology and semiconductors — by identifying and dismantling regulatory barriers; conducting deep dives into the frontier economy to inform policymakers; and hosting high-level briefings that connect leading scientists and technologists with decision-makers.

We are committed to closing the commercialisation gap and harnessing innovation for national prosperity. To learn more or get involved, contact Mann here.

Building the Case

In any think tank or business group, much of the activity happens below the surface, while most people understandably only see the finished outputs.

That’s why I’ve started sending a weekly update to our Patrons and Advisers, sharing more detail on our work with government, politicians, parties, regulators and others. You can become an Adviser here.

We have also begun publishing our consultation responses. This week alone, we responded to two.

First, our response to the Ministry of Housing, Communities and Local Government’s consultation on establishing a Development Corporation. We didn’t mince our words: “The shortage of housing, office space and laboratory space in Greater Cambridge is not merely a social problem — it is an economic emergency that directly undermines the UK’s capacity for innovation and growth.”

Between 2011 and 2019, 41,000 jobs were created in the area without a commensurate increase in housing; median house prices now stand at eleven times average earnings, and the shortage of lab space constrains the life sciences and deep tech firms the cluster depends on.

We supported the Development Corporation proposal, but urged the Government to be more ambitious in the powers it confers, particularly around plan-making and land value capture. Read the full response here.

Meanwhile, our response to the Department for Business and Trade’s consultation on refining the UK’s competition regime sought to strike the right balance: a regime that is too loose risks incumbents stifling innovative startups; too tight, and founders struggle to attract investment, form partnerships and exit.

While there were proposals to commend, we pushed back the idea of giving the CMA algorithm investigation powers. We argued that smaller startups may lack the resources and expertise to manage investigatory demands, and that such burdens could materially hinder their growth.

We were not alone in this concern — entrepreneurs and investors we spoke to agreed. As one VC told us:

“These powers currently only exist under the digital markets regime, which was designed with large incumbents in mind. Extending them across all competition and consumer protection work means early-stage companies, particularly in AI and software, could face substantial compliance burdens that are wholly disproportionate to their size and resources. A startup with a small engineering team being required to build bespoke testing environments, alter product behaviour, or produce data it doesn’t already hold could face costs that genuinely threaten its viability. There’s a real risk this makes the UK a less attractive place to build and scale technology businesses.”

This is not the end of our work on these issues. Get in touch if either of these things matter to you.

King's Gambit

Earlier today, I joined a Department for Business and Trade roundtable on supporting the next generation of entrepreneurs. The focus was a proposed fifth category in the King’s Awards for Enterprise to recognise young founders, planned for launch in May to coincide with the awards’ 60th anniversary.

We will soon share a broader set of activities for our Young Entrepreneurs Forum, but I would also welcome hearing from anyone keen to do more in this space — we are currently developing a number of ideas.

Late Expectations

Late payments have been strangling small businesses for decades — and this week, the Government has finally moved to do something meaningful about it, with Small Business Commissioner Emma Jones CBE leading the charge.

On Monday, the Department for Business and Trade announced what it’s calling the toughest crackdown on late payments in over 25 years. The headline measures include a hard 60-day cap on payment terms for large firms paying smaller suppliers, mandatory interest on late payments pegged at 8% above the Bank of England base rate, and significantly beefed-up powers for the Small Business Commissioner’s office — including the ability to investigate poor payment practices, adjudicate disputes, and levy multi-million-pound fines against the worst offenders.

Alongside many others, this is an issue we’ve been banging the drum on for a long time. When the Government launched its Small Business Plan last year, which laid the ground for this week’s announcement, I didn’t mince my words:

“In a world where online banking, accounting software and e-invoicing exist, it’s completely unacceptable that so many burgeoning startups see their growth stall due to late payments. At its worst, they can send perfectly good businesses to the wall — leaving Britain’s economy less dynamic and competitive.”

The damage goes far beyond individual closures though — late payments are a drag on employment, exports, investment, profitability and access to finance right across the economy.

At Enterprise Nation, which she founded, Emma campaigned for robust measures to address late payments, including in the reports we worked on together. As a Patron of The Entrepreneurs Network, it’s particularly pleasing to see her now in the driving seat to deliver on those shared ambitions. Emma is proving the value of her own longstanding call to get more entrepreneurs into the heart of government to effect exactly the changes we’ve seen this week.

The numbers behind this are stark. Late payments cost the economy an estimated £11 billion a year, and roughly 38 businesses close every single day because they simply aren’t paid on time.

These new powers will allow her to take that work to a much larger scale. As she said:

“We are on a mission to make life easier for small firms by getting money moving faster through the economy by tackling late payments… These reforms will reduce the hours spent chasing debt allowing small businesses to focus on more productive and enjoyable growth.”

There’s also a notable move for construction: the Government is consulting on banning the withholding of retention payments, a practice that has long left smaller contractors exposed when larger firms go bust or simply don’t pay up.

Take a bow, Emma Jones CBE.

Deal Breaker

We’re putting the finishing touches to our response to the Department for Business and Trade’s consultation on refining Britain’s competition regime. Among other things, it proposes reforms to how the Competition and Markets Authority can regulate mergers and giving it new powers to investigate how businesses use algorithms. If any founders or investors want to tell us their perspectives (either anonymously, or loudly and proudly), you can book a 20-minute call with our Research Director Eamonn Ives via this link.

Trust the Process

Our latest UK AI Fieldbook interview is out. Eamonn Ives sat down with Murat Tunaboylu, co-founder of Antiverse, a biotech company using AI to design antibodies against targets that big pharma has struggled with for decades.

The whole conversation is worth reading, but one insight stood out from a policy perspective: the UK’s medicines regulator, the MHRA, appears to be pioneering something genuinely world-leading — process-level drug approvals.

Rather than approving individual molecules one by one, the idea is to approve the process itself, so that everything it produces carries a validated safety and efficacy profile. As Murat puts it:

“Just imagine: you design something, and in a matter of weeks or months it gets to a human patient who has no other option — whereas the current process for getting a drug approved might typically cost $2 billion and take 12 years to complete.”

If it works, it could fundamentally change the economics of personalised medicine — and the UK is leading it. Murat also makes a strong case for open data mandates on publicly funded research, protecting SEIS and EIS, and closing the persistent seed-to-Series A funding gap. Read the full interview here.

Deep Impact

Innovate UK wants to hear from you. As we covered last week, the agency has published a new prospectus under Executive Chair Tom Adeyoola, signalling a major strategic reset — narrowing its focus to deep and hard tech, introducing specialist Growth Sector teams, and building a connected investment pipeline linking its deal flow to the British Business Bank, the National Wealth Fund and the National Security Strategic Investment Fund.

It’s now running a short feedback survey and we’d encourage founders in our network to respond. The more Innovate UK hears directly from the companies it’s trying to back, the better the final model will be.

Branching Out

The Cedar Review — on whose board I sit — has launched its survey on refugee entrepreneurship. The review is gathering evidence on the experiences of refugee entrepreneurs in the UK: what support was available to them, what was helpful and what’s still missing. If you’re a refugee entrepreneur yourself, or you work with or know someone who is, please consider filling in or sharing the survey.

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Three Big Ideas #57

🤖 Philip Salter, Founder

That vast tracts of our lives are now conducted in concert with and through digital technology is taken for granted by anyone growing up today. For the next generation, the same will be true of artificial intelligence. But, for those of us living through this paradigm shift, the uncertainty can be disconcerting.

Anthropic recently published findings from a large-scale qualitative study of more than 80,000 Claude users across 159 countries. As you might expect, the headline results are mixed: 28% cite economic empowerment as a benefit, while 18% fear displacement.

I will focus on the findings most relevant to entrepreneurship and the UK, though there are broader insights worth digging into.

Globally, 8.7% of users identify AI’s primary promise as helping them build and scale businesses. This is especially pronounced in Africa, South and Central Asia, the Middle East and Latin America, where AI is viewed as a capital bypass mechanism — in other words, a way to start businesses without traditional funding, hiring or infrastructure.

Independent workers and entrepreneurs appear to be the clearest economic beneficiaries. Nearly half report tangible gains from AI, compared with just 14% of institutional employees (47% vs 14%). Those running side projects benefit most, with 58% reporting economic gains.

While the report does not drill down specifically into the UK, it does reveal that Western European sentiment is slightly less positive than the global average (65% vs 67%). Concerns in the region centre on surveillance, privacy and governance. In developed economies like the UK, “life management” resonates more strongly than entrepreneurship, with users more likely to see AI as a tool for managing already complex lives.

This last point may come to matter a lot.

Nobody truly knows how quickly AI will come to dominate, but based on recent performance, those at the most bullish end shouldn’t be discounted out of hand. This will unlock economic growth, but also disrupt much of the status quo. Those with the skills and mindset to build with AI will flourish, as will the countries in which they live.

💊 Eamonn Ives, Research Director

In our latest UK AI Fieldbook interview, Murat Tunaboylu explained how artificial intelligence holds extraordinary promise for novel drug discovery.

One question I was particularly keen to get Murat’s thoughts on concerned whether or not our regulatory system was ready to handle a potential coming tidal wave of innovation. If AI does radically accelerate drug discovery, regulators could be inundated with approvals. In this world, innovation might be happening in one sense, but, in a more meaningful one, the benefits will lie dormant, waiting until a regulator gives groundbreaking drugs the green light.

As it happens, Murat was optimistic that we will avoid a backlog. But it nonetheless got me wondering about how we might be able to tweak regulatory approval systems to future-proof against sclerosis — in healthcare, and in other areas too.

One thing we discussed was the Medicines and Healthcare products Regulatory Agency’s pioneering approach to regulating the ‘processes’ involved in developing drugs, rather than individual drugs themselves. A not too far-fetched analogy here might be that if you asked a half-decent chef to cook you a meal from scratch, you’d probably trust them to make something edible simply by relying on tried and tested culinary techniques, rather than needing to forensically inspect whatever dish they eventually plate up for you.

An obvious riposte to this approach to regulation is that it could result in lower safeguards for things we consider extremely important. There may well be reasons why in some industries we very much do want to closely monitor final products and ensure they’re safe for their intended uses — be that drugs, or food, or anything else.

Perhaps we should therefore look to apply it in areas where there’s little to lose from a loosening of standards. In healthcare, this may be allowing companies working on hitherto ‘untreatable’ diseases to offer trials to patients who currently have no alternative. In logistics, it might be giving a longer leash to autonomous vehicles or drones operating in remote areas far from any human population centres. In education, it may be giving AI-powered teaching assistants to pupils for whom conventional teaching is unsuitable.

As more and more startups harness AI to advance innovation, an increasingly binding constraint on the good it could do will be our regulatory state. Now is the time to start thinking about how we can ensure it facilitates rather than frustrates modern miracles.

🧪 Mann Virdee, Head of Science and Technology

Some scientists are deeply committed to the idea of research as a good in and of itself — that is, simply to advance our understanding of the cosmos, even when its utility in our daily lives seems limited. For others, there is a strong societal dimension — they want their research to have a strong impact, such as in tackling climate change or in improving prosperity.

But that is a false dichotomy. Research can have spillover effects in all kinds of ways that may not initially be apparent.

So, how can we measure the spillovers from science into commercialised technologies? It’s an important question because quantifying spillovers helps us to understand the social returns from science and it’s useful for those designing policy.

That’s at the heart of a new discussion paper from the Centre for Economic Performance. The challenge is that the value scientific research generates in downstream technologies is diffused through chains of follow-on research.

The authors of this discussion paper propose a new measure called Science Rank, which uses combined patent and paper citations to assign a share of the private value of patented inventions to the scientific literature they directly (or indirectly) rely on.

The authors show that Science Rank outperforms other measures, such as patent-to-paper citation counts, in identifying influential scientific research. That’s because traditional metrics only count direct links from patents to papers. This is a bit like judging a tree by looking only at the trunk. It ignores the roots, the vast network of follow-on research that eventually leads to a breakthrough.

Science Rank is more effective at identifying the technological influence of foundational research than traditional metrics. For example, under conventional citation counts, nearly half of Nobel Prize-winning papers appear to have zero impact on technology. In contrast, Science Rank recognises the value of nearly all these prestigious papers, placing them in the top half of its distribution — with over 60% reaching the top 5%

The research also shows that the US remains the undisputed powerhouse not only in generating spillovers but also in keeping the commercial value domestic. The findings provide a more mixed picture for the UK; while we punch above our weight in generating global spillover value, a huge share of that value leaks out to foreign firms — as shown by the geography of beneficiaries.

Three Big Ideas #57

Three Big Ideas is our fortnightly roundup of ideas (and our takes on them) in entrepreneurship, innovation, science and technology, handpicked by the team.

This week, Philip Salter analyses the findings of Anthropic’s bumper survey about AI use, Eamonn Ives explains why we need to act now to future proof our regulatory landscape for a potential wave of innovation, and Mann Virdee wonders how society can better quantify the positive impacts of scientific spillovers.

Engineering the Key

In our latest interview for our UK AI Fieldbook series, Eamonn Ives speaks to Murat Tunaboylu about how AI is accelerating novel drug discovery and could bring about the era of personalised medicine.

Making Waves

Wave after wave, our Entrepreneurs Survey makes headlines. Just yesterday, following the release of our latest instalment, journalists from Sifted, The Telegraph, and City A.M. all reported on our findings. We don’t measure our success by headlines and quotes (encouraging as they are), but by our ability to impact policy, and — ambitious as it sounds — change the hearts and minds of the country.

To that end, each quarter, we reserve half the survey for questions to dig into a thorny policy issue. This time around we focused on tax breaks for founders, with the results feeding into our submission to HM Treasury’s call for evidence around Tax Support for Entrepreneurs.

I won’t bombard you with every stat, but it’s fair to say that these schemes are seen by founders as essential to unlocking early-stage investment. Huge majorities of those who’ve used the Seed Enterprise Investment Scheme (SEIS), Enterprise Investment Scheme (EIS), and Venture Capital Trusts (VCTs) say they would have struggled to raise capital without them — 84%, 86%, and 78% respectively — and even more believe the schemes helped their businesses scale.

That said, founders don’t think the schemes are flawless. While fees and terms are broadly considered fair for SEIS and EIS, VCT users feel differently — 41% of founders regard VCT terms as unreasonable compared to just 33% who find them fair. Opinions on size limits and eligibility were also mixed, particularly for SEIS, where 39% of founders feel the criteria are not appropriate compared to 36% who think they are.

On capital gains, the founder consensus is clear: over seven in 10 believe Capital Gains Tax (CGT) relief drives startup creation, and when asked what they’d do with the proceeds of a more generous Business Asset Disposal Relief (BADR), 72% say they’d invest in someone else’s startup and 70% would use it to launch a new venture of their own. Only 7% say it wouldn’t change their behaviour.

We aren’t claiming this is the only evidence that HM Treasury will need to decide whether and how exactly to reform these tax breaks. But it does add data where previously there was little — and as our panel of entrepreneurs grows and grows, we’ll be able to get more granular with our questions and findings. If you want to have your say next time round, join us.

On the topic of what next, get in touch with Eamonn Ives to share your thoughts on what policy area we should dig into next time around.

VC on VC

The All-Party Parliamentary Group (APPG) for Entrepreneurship — for which we’re the Secretariat — is launching a series of Evidence Sessions, starting with one led by Victoria Collins MP, a former tech co-founder who sits on the Science, Innovation and Technology Select Committee, on female spinout founders. It’s on Monday at 12pm and we may still be able to squeeze in a couple of people if you’re quick.

APPG Evidence Session: Female Spinout Founders
🗓 Monday, 23 March 2026
🕐 12pm to 12.45pm
📍 Online
ℹ️ An evidence session for the All-Party Parliamentary Group (APPG) for Entrepreneurship, on how the UK can better support women turning academic research into successful businesses — chaired by Victoria Collins MP
⏩ Request a place

The sessions will be held virtually, so location is not a barrier, and over the coming months and years we aim to cover a wide range of policy areas around entrepreneurship. Each session will be led by one or more Officers or Members of the APPG, and following each session we will publish a concise write-up of the discussion.

Sign up to the APPG’s Substack for invites to future evidence sessions, including with Lord Marks of Hale CBE on R&D Tax Credits and Lord Kamall on supporting local communities.

Vernal Velocity

Innovate UK has published its new prospectus this week. Under Executive Chair Tom Adeyoola, the agency wants to make sure British breakthroughs result in globally scaled companies.

It’s narrowing its focus to deep and hard tech businesses and introducing a framework to identify high-potential companies. New Growth Sector teams will bring genuine working knowledge of their portfolios. A new Velocity service will provide ongoing account management for founders throughout their scaling journey. And a connected investment pipeline will link Innovate UK’s deal flow directly to the British Business Bank, the National Wealth Fund and the National Security Strategic Investment Fund. As Adeyoola puts it:

“Our vision is a UK where breakthrough ideas — from research, from labs, from anywhere in this country — can become industry leaders. Industry giants. Where those with potential, realise the potential.”

We’ve long argued that the gap between research excellence and commercial success is one of the most consequential challenges the country faces. This prospectus shows Innovate UK agrees. The direction is right — founders in deep tech should pay attention.

Sunday Best

Over at LinkedIn, Richard Tyler reminded me that today is the deadline to enter the Sunday Times 100, their annual ranking of the UK’s fastest-growing private companies. You’ll need four years of accounts, £5 million plus in sales, and to be in profit to be eligible to enter. Finalists get a networking event at the British Museum in September. Enter here.

Sterling Work

Another week; another publication. On Tuesday, we released A Sterling Opportunity, which makes the case for the UK to implement a pro-innovation regulatory regime for stablecoins, bringing benefits to entrepreneurs, consumers and the government.

For the uninitiated, I’ll hand over to the authors, Hugo Okada and Osian Guthrie, to explain what stablecoins are:

“Stablecoins are, at their core, remarkably simple. The most widely used versions are fiat-backed stablecoins, which are digital tokens representing existing currencies and backed one-for-one by safe reserve assets such as cash or short-term government bonds. If a user holds a dollar or sterling stablecoin, they are effectively holding a digital claim on reserves held by the issuer. Stability comes from the promise that the token can be redeemed for the underlying currency at par.”

As the paper argues, and as Hugo and Osian set out in a CapX article, stablecoins enable near-instant, low-cost international payments around the clock, bypassing the delays and expense that plague traditional banking. They also support programmable finance, allowing payments to be embedded into software and automated contracts. Furthermore, stablecoins can boost financial inclusion by giving people in volatile economies access to stable currencies. And for governments, because stablecoins are typically backed by sovereign debt, their growing adoption increases demand for government bonds — which in the case of sterling-denominated stablecoins could help lower borrowing costs, as well as reinforcing London’s position as a global financial centre.

The paper argues that we should avoid overly prescriptive regulation that risks stifling stablecoin innovation before the market has had a chance to develop. We’re particularly concerned by three current proposals: universal redemption obligations, which misunderstand how stablecoins actually circulate on secondary markets; stringent capital requirements, which could shut out the smaller innovators who have historically driven progress in digital finance; and paltry holding caps, which would undermine some of the most valuable stablecoin use cases, including large-scale B2B payments and corporate treasury management.

Instead, we advocate for principles-based regulation focused on transparency, solid reserve backing, and robust custody arrangements — giving the technology and market room to evolve while maintaining credible oversight.

If this is still feeling a bit esoteric, it won’t for long. The total market capitalisation of stablecoins now stands at around $300 billion, with projections of this hitting between $1.9 trillion and $4 trillion by 2030. Lord Holmes of Richmond MBE wrote the foreword, and as former Chancellor George Osborne argued last year in the Financial Times:

“We became the world’s financial centre because we weren’t afraid of change. On crypto and stablecoins, as on too many other things, the hard truth is this: we’re being completely left behind. It’s time to catch up.”

The report was fed into the Financial Services Regulation Committee’s stablecoin inquiry.

Copyright and Wrongs

In our latest UK AI Fieldbook interview, Mann Virdee caught up with Hanna Celina, founder of Kinnu, a London-based educational technology startup with over 1 million users.

The challenges of the UK’s copyright regime feature prominently in the chat, with Hanna describing the UK’s current position as “wilfully shooting itself in the foot.” She argues:

“If you look at British copyright laws, you realise you really cannot do anything. It’s insane how high the level of protection is for copyright holders compared to the US, where companies have the freedom to innovate faster.”

“It goes deeper. We could be making strides in supporting A Levels or IB [International Baccalaureate], but the exam scores and question banks are just not public, even though they are often government-set exams. And if you look at learning standards — what a learner should know for a GCSE — it’s a bunch of poorly formatted Word docs that are completely not LLM-friendly. It was impossible to build a consistent ‘National Knowledge Graph’ from this data the last time we looked at it, which would be like a digital map where every concept is linked to its prerequisites and its real-world applications. That would enable a learner to zoom in and out of topics and understand how concepts relate to other disciplines. But, with recent AI improvements, turning that kind of data into a National Knowledge Graph might just be possible now.”

The interview covers a lot more besides, including how Kinnu uses A/B testing to validate learning interventions at scale; the human-in-the-loop requirement for zero-error tolerance in legal and financial education; how vibe coding is turning writers into product builders; and why Hanna thinks R&D tax credits are better than government grants for agile startups.

Opportunity Knocks

Does your business focus on defence technologies and robotics? If so, you can use the Front Door pilot to tell the Regulatory Innovation Office (RIO) about any regulatory barriers you have.

The Front Door is an experimental, business-led pilot by the RIO to collect and address regulatory challenges. It aims to make it easier for businesses to highlight barriers, helping RIO target reforms where they are most needed and to support innovation and growth.

The trial closes in a week. Share your experience here.

Message from our Partner

Join us for an exclusive deep dive into the sale of Cadcorp, a leading geospatial software provider, to NEC Software.

In this live panel discussion, the sellers of Cadcorp will join our Head of Corporate Finance, Matt Katz, to take you behind the scenes of their journey, from shaping a growth story in a specialist market, to navigating strategic conversations with a global buyer, to completing a deal that secured the next chapter for their team, product, and customers.

• When? Tuesday, 24 March 2026, 8.30am to 11am

• Where? Buzzacott offices, 130 Wood Street, London, EC2V 6DL

Three Big Ideas #56

Three Big Ideas is our fortnightly roundup of ideas (and our takes on them) in entrepreneurship, innovation, science and technology, handpicked by the team.

This week, Philip Salter examines new research on the returns from collaboration between SMEs, Eamonn Ives argues that stablecoins could help bring down Britain’s debt burden, and Mann Virdee asks why the prioritisation of legislative process over purpose all too often leads to distorted outcomes.

Three Big Ideas #56

🤝 Philip Salter, Founder

Despite the performative antagonism of shows like The Apprentice and Dragons’ Den, anyone familiar with business knows that collaboration is critical for success. You only need to look at the concerns arising from Anthropic’s broken relationship with the United States Department of Defense to see the primacy of partnerships. And what’s true for one of the world’s fastest-growing companies is also true for Britain’s smallest — even more so.

In a new paper, researchers analysed over 17,500 UK firms from 2006 to 2018 across three government datasets, measuring innovation as the share of revenue from new-to-market products. They tracked whether firms collaborated with seven types of partners across four geographic levels and isolated how SMEs — 92% of the sample — benefited differently from partnerships compared with large firms.

The headline finding is that SMEs get the highest returns from collaboration with customers and suppliers compared with universities, consultants and government. On average, knowledge collaboration for innovation in SMEs is positively moderated by the regional proximity of collaboration partners — in other words, the closer the partner is, the greater the positive effects of knowledge collaboration. This matters most for university collaboration and exploration-oriented innovation; for customers and suppliers, however, the positive effects hold across geographic distances, including international.

University collaboration does positively affect SME innovation, but only when the university is nearby — regionally or nationally. The effect disappears or turns negative at international distances. Even then, the research suggests that the type of knowledge universities offer is harder for small firms to absorb and commercialise compared with the more applied, market-ready knowledge that flows from customers and suppliers.

Critically, government collaboration has essentially no measurable impact on SME innovation. This isn’t procurement but rather cooperation with government bodies or public research institutes specifically on innovation activities — joint R&D work or knowledge-sharing partnerships aimed at developing new products or processes.

The paper finds that homophilous partnerships — working with knowledge-similar, geographically close, supply-chain partners — produce the strongest measurable innovation outcomes for SMEs, at least when success is measured by new-to-market product revenue. The paper suggests that this can create echo chambers and might mean missing out on more transformative opportunities, but the data shows this is, on average, the best strategy.

So what are the policy implications? When it comes to SMEs, this paper suggests that government support should prioritise helping them deepen relationships with customers and suppliers — the partnerships that most reliably drive innovation. University–industry linkages — as currently delivered — may be overweighted, while international programmes requiring cross-border academic partnerships risk imposing costs on SMEs that outweigh the benefits. And, to be blunt, the data shows that entrepreneurs should think twice before working directly with government.

🪙 Eamonn Ives, Research Director

Plans to replace portraits of historical figures with pictures of quintessential British wildlife on bank notes will understandably be the one currency news story that gets all the attention today. Fun as it will no doubt be to see cuddly creatures adorn our legal tender, another altogether more important money-related media item also bubbles beneath the surface.

Today marks the last call for submissions to the Financial Services Regulation Committee’s inquiry on how stablecoins should be regulated in Britain. For the uninitiated, stablecoins are a form of digital currency, the value of which is tightly pegged to real-world assets — like cash or government bonds. This allows them to serve as a ‘stable’ unit of value, in the sense that one sterling-denominated stablecoin can always be redeemed at £1, a dollar-denominated one at $1, and so forth.

As Hugo Okada and Osian Guthrie note in our latest research paper, A Sterling Opportunity, stablecoins offer a host of potential benefits. For consumers, there’s the promise of greater financial inclusion. For businesses, cross-border transactions could become radically less expensive.

Where stablecoins could, however, pose more of a threat is to governments. If they continue on their meteoric rise — up tenfold in the last five years, with the market cap currently standing at around $300 billion — there’s always a risk that sovereign states will see their ability to regulate the money supply eroded. But, for a nation like the United Kingdom, there could also be significant upsides too.

Consider how stablecoins rely on high-quality assets — such as government bonds — to maintain their value. Simple economics tells us that this will drive bond prices up, and yields down. Servicing the national debt would in turn become cheaper. Public sector net debt is incrementally nudging down from the highs of the Covid-19 pandemic, but it still stands at 92.9% of GDP. In 2025-26, the Office for Budget Responsibility expects the UK to pay £114 billion simply to service that debt. Even in the best of times, that’s an awful lot of money that could otherwise be used for more productive ends.

Stablecoins won’t solve Britain’s debt problem entirely. But they might just help at the margin — through allowing cheaper borrowing, and by stimulating entrepreneurial activity in a clear growth sector. To seize their full potential, however, Britain needs a regulatory regime that’s fit for purpose. We should take heart from the fact that legislators are examining stablecoins closely — let’s hope their diagnosis and subsequent prescriptions are wise ones.

📝 Mann Virdee, Senior Researcher

On Sunday, our Adviser Sam Dumitriu highlighted a growing paradox in Britain’s approach to safeguarding nature: well-intentioned legislation designed to protect nature often has the opposite effect. By prioritising bureaucratic processes over purpose and outcomes, current laws offer the worst of all worlds. They fail to protect the environment and also prevent us from building the energy and transport infrastructure essential to decarbonisation.

This is part of a broader problem — the prioritisation of process over purpose leads to distorted outcomes. When we treat administrative compliance as the goal, we lose sight of the intended outcomes.

Legislation can also fail to serve its intended purpose because politicians are required to vote on complex regulations with limited time, information, and ability to stress-test. That’s not helped when the UK’s political system prioritises looking busy and constituency casework over the job of being a legislator. It’s worse for the entrepreneurial ecosystem because so few parliamentarians understand what it takes to be an entrepreneur or the competing pressures they face.

Take the example of the National Security and Investment Act. Its well-intentioned purpose is to allow government to scrutinise and intervene in business acquisitions, mergers, and investments that it believes will pose risks to national security. But its broad scope means that some startups and low-risk deals such as internal restructuring are unintended targets.

This all reflects an environment where the fear of making a wrong decision outweighs the benefit of trying a new approach. This “paralysis by analysis” leaves Britain with the highest energy costs in Europe and a regulatory regime that makes the investment environment more difficult for Britain’s entrepreneurs.

Addressing these failures requires better oversight as well as better regulation. That could include sunset clauses, formal review processes, and structured scrutiny from experts and practitioners after legislation has been passed. And there are many arguments for the reform of the House of Lords — not least its status as the world’s second-largest legislative body and the questionable expertise of some members — but the scrutiny and debate provided by the upper chamber should not be dismissed lightly; it remains a necessary, albeit imperfect, check on poorly drafted law.

Total Recall

In our latest interview for our UK AI Fieldbook series, Mann Virdee speaks to Hanna Celina about how combining learning science with generative AI can overcome the cognitive forgetting curve to optimise human memory

Stiffed Competition

Ambitious entrepreneurs face a panoply of risks between ideation and exit, some of which can stop them in their tracks. One such risk that gets overlooked all too often is the web of regulations that constitute our approach to competition policy. As we argued in Better Together, these rules can have a chilling effect on investment, and thus entrepreneurial activity overall.

On this note, busy founders will be easily forgiven for not digging deep into the recesses of GOV.UK to find the Department for Business and Trade’s paper Refining Our Competition Regime.

It covers a lot, but let me highlight one proposal. Specifically, the paper proposes giving the Competition and Markets Authority (CMA) the power to compel companies to hand over the source code behind their algorithms. It would also be able to intervene in how products operate during an investigation — for example, by altering how content is displayed or how a pricing engine behaves — before any wrongdoing has been proven. The CMA could even run its own tests on an algorithm under conditions it specifies, with its in-house experts observing how the system behaves.

These are investigative powers rather than penalties. In practice, that means they could be deployed during a review — most likely a merger investigation — prior to any conclusion being reached. These powers would expand the surface area of regulatory risk, increase the burden on businesses subject to them, and send an unwelcome signal about the UK’s regulatory culture that investors around the world will notice.

The Department for Business and Trade’s call for evidence on these proposed changes to the CMA closes at the end of the month. You may wish to respond. And please feel free to reach out directly to me with your thoughts on this.

Easy As

This week, the All-Party Parliamentary Group (APPG) for Entrepreneurship released the A to Z of Entrepreneurship. I appreciate that many of you will have heard about this via the APPG’s newsletter or my email, so I’ll keep it brief.

In short, through the APPG, we’ve helped to create an evergreen resource for politicians, policymakers, researchers and anyone looking to better understand the landscape of entrepreneurship policy.

If you have any feedback — including suggestions for new entries — let us know.

Local to Global

International Women’s Day is on Sunday. You’ll already know about all the work we undertake with Barclays through our Female Founders Forum — including most recently Ideas to Impact, in which we looked at the experiences of female academic entrepreneurs in Britain’s spinout ecosystem — so today I want to draw your attention to two separate endeavours supporting female founders I found out about this week.

First, we hosted our latest Ecosystem Builders event in Birmingham with Tara Attfield-Tomes. Among other things, Tara is the founder of The 51% Club, which is building hubs across the country. Second, this week the equally wonderful Pip Jamieson announced the launch of the UN Women UK community app. Both come highly recommended.

Relatedly, do get in touch with recommendations for resources or organisations which have supported your business growth. We may add them to our Support for UK Entrepreneurs page.

Inside a Deal

On the morning of Tuesday 24 March, Buzzacott will be hosting a deep dive into the sale of Cadcorp, a leading geospatial software provider, to NEC Software. The live panel discussion will take you behind the scenes of the journey. You can request a place here.

For the Trees

I’m delighted and honoured to have joined the board of The Cedar Review, a national, independent review exploring how to better support refugee entrepreneurs to start, sustain and grow successful businesses in the UK.

As part of this work, refugee entrepreneurs are being asked to take part in paid research to share their experiences, the opportunities, the challenges, and what would make the biggest difference.

Find out more here, and sign up to take part in the research here.

Message from our Partner

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Permission Control

Today’s newsletter comes from our Research Director, Eamonn Ives. Normal service with Philip resumes next week!

While I’m hardly the world’s most sentimental person, there are a handful of things I routinely look forward to each year: that first sunny day of spring, the return of Premier League football, and Patrick and John Collison publishing Stripe’s annual company letter.

If you think you have better things to do with your time than read some corporate musings, think again. Far from the inane platitudes that give ‘corporatese’ its deservedly bad name, their annual stocktake is always worth your full attention.

In their latest letter, the pair examine several trends that should interest each and every entrepreneur. Among other things, they show how income concentration among top firms is approaching record levels, how stablecoins are already reshaping B2B payments, and how agentic commerce might transform both professional and personal life.

Like all good writers, the Collisons save the best for last. Invoking the work of Joel Mokyr, one of the winners of last year’s Nobel Prize in Economic Sciences, they note:

“In The Political Economy of Technological Change, Mokyr also observed that new technologies have in the past often failed, despite their economic superiority, because technological decision-making implicates not only suppliers and customers, but also a broad variety of nonmarket “aggregators” (regulators, committees, courts) that influence what is adopted. As AI and the internet expand the scope of what’s possible, synthetic impediments to adoption and adaptation will become increasingly costly. Our bifurcating economy shows that growth is contingent on the application of useful knowledge and not some preordained result of its abstract availability.”

The point is worth dwelling on. It’s not enough to invent something better. Whether it actually gets used — at scale, and quickly enough to matter — depends just as much on permission from regulators as it does on consumer demand and entrepreneurial guile. We’ve seen this play out already with nuclear energy and drones — and we’re watching it unfold again with advances like AI and GLP-1 agonists. An increasingly pertinent question for innovation policy now is not whether we can invent miraculous new technologies, but whether institutional environments will give them the oxygen they require to breathe.

Here at The Entrepreneurs Network, we can’t promise to crack cold fusion, engineer room-temperature superconductors, or invent any other technological marvels. What we can try to do, however, is to ensure that when society’s innovators make progress, the policy landscape stands ready to facilitate rather than frustrate them.

After decades of relative stagnation, it’s patently clear that we are now at a juncture in human history. Readers of my Big Idea this week will know that new technologies appear to be diffusing into the economy at an ever-quickening pace. It is incumbent on policymakers to ensure that regulatory barriers to socially useful innovation do not put that trend into reverse. Before us awaits an abundant society — if we can permit it.

On the Hunt

On Tuesday, we hosted Sir Jeremy Hunt MP for a fireside chat, adeptly chaired by our Patron, Steve Rigby. In the audience were around 50 entrepreneurs, all armed with incisive questions to pose to the former Chancellor.

As it was held under Chatham House Rule, I can’t divulge exactly what was discussed, but we covered a lot of ground. I mentioned on LinkedIn how one of the most interesting parts of the evening was Sir Jeremy’s reflection on the similarities between being a top politician and leading entrepreneur.

Since then, I’ve also spent more time thinking about his observation of how we need to get better at embracing risk — both in business, and, perhaps more importantly, in politics. This wasn’t a paean for recklessness, but to acknowledge that too often our political system rewards ‘not doing wrong’ far more so than it rewards ‘actively doing good’.

Many of Britain’s thorniest problems have festered for decades. Rather than always trying to stave off the worst-case scenario, perhaps civil servants should be empowered to experiment more boldly with novel solutions. When venture capitalists allocate investment, they do so in the hope that a handful of winning bets cover many multiples more losing ones. Gains may stand to be made if we could develop a similarly healthy tolerance for failure in policymaking too.

We’ll be organising more fireside chats with other political leaders in the near future. To receive invitations directly, you can join as a Member for free here. If you’re in a position to support us financially, you can use the same link to join us as a Supporter or Adviser (for those who already do — thank you).

Last Call

If you haven’t got around to it yet, there’s still time to respond to our latest Entrepreneurs Survey. Whether you’re optimistic, pessimistic, or somewhere in between — we want to know what founders really think about Britain’s current state of affairs. It only takes 10 minutes to complete, and you’ll be joining hundreds of fellow founders who have made their voices count.

Three Big Ideas #55

⏩ Eamonn Ives, Research Director

In the last few days alone, we’ve fielded a number of requests from journalists keen to know whether or not AI is having a discernible impact on Britain’s labour market. There’s certainly evidence to suggest that it might be, but the old adage of not confusing correlation with causation must be heeded. As I told both Bloomberg and The Telegraph, other factors — not least the increased tax burden of employing workers, plus new regulations that make it harder to fire underperformers — might hold more water for explaining the sustained rise in unemployment over recent months.

That being said, I think it’d be foolhardy to be too bearish on AI’s eventual impact on the world of work. A new working paper from Hemanth Asirvatham, Elliott Mokski and Andrei Shleifer gives credence to that hunch, and suggests change may occur quicker than we might expect. Their research studies how long it takes for various technologies to experience widespread adoption after being invented, and, crucially, how this has changed over time. What they find is striking — a tenfold decrease in ‘adoption lags’ since the start of the industrial age to today. Whereas it once took roughly 50 years for a technology to go from initial prototype to being diffused into the economy, it now takes only around five. While the authors do note AI has some properties that might somewhat slow its spread, they nonetheless believe there are reasons to believe its adoption will be rapid.

Source: Asirvatham, Mokski and Shleifer

Nobel-winning economist Robert Solow once famously quipped that “you can see the computer age everywhere but in the productivity statistics.” If Asirvatham, Mokski and Shleifer are right, we might not be able to say the same about AI for much longer.

🎓 Mann Virdee, Senior Researcher

Here’s something to think about: since the turn of the millennium, the number of doctoral students has more than doubled globally and is increasing each and every year. At the same time, there is room for less than 20% of them in permanent academic positions. In some fields, it can be as low as 3–5%.

That is not necessarily a problem. It depends what you think the purpose of a PhD is. A Doctor of Philosophy is, after all, about a love of wisdom. My own experience is that a PhD helps one think more deeply and ask more searching questions. That’s undoubtedly a good thing in and of itself.

But there are other ways to engage with knowledge — and it’s clear too many people are going down the same pathway that doesn’t equip them for careers outside of academia. Surely there are other ways to pursue a love of wisdom that doesn’t require a highly specific route of writing and defending an academic thesis for the vast majority of PhDs who will never be academics.

China is responding with an interesting innovation: the ‘practical PhD’. In this new model, engineering students graduate by defending a physical product instead of a written thesis. Students have two supervisors, one from a university and one from industry, and must prove their inventions would work at an industrial scale. It’s different from an Engineering Doctorate, which still relies on a traditional write-up.

Critics who argue that this isn’t a real PhD have a point, but they are also missing the point. Our current system trains vast numbers of people to write academic papers who will not need that skill after completing their doctorate. So while we shouldn’t stop people doing PhDs, experimenting with contributing to knowledge in forms other than a thesis seems like an excellent idea to me.

As the Financial Times recently noted, the graduate premium is collapsing in the UK. The problem is not that we have too many graduates, but rather that our economy is failing to create the high-skilled, professional jobs. Unlike the US or the Netherlands, the UK’s share of managerial and professional roles has stagnated. We have a skills mismatch because our PhDs are trained to write papers, while our economy desperately needs them to build companies and infrastructure. Perhaps shifting the dial slightly will help us turn our oversupply of graduates into an engine for growth.

🔋 Jessie May Green, Events and APPG for Entrepreneurship Coordinator

We rely on critical minerals, such as lithium, copper and cobalt, for everything from smartphones to wind turbines. Energy, communications, defence, transport and scientific research all depend on their ready supply. Yet being a globally traded commodity, critical minerals are acutely vulnerable to geopolitical shocks.

To mitigate risk, and to drive up standards in this notoriously harmful industry, the Government recently released its ‘Vision 2035’ Critical Minerals Strategy. The report emphasises three key focuses going forwards: collaborating with international partners, improving the ethics of international markets through enhanced ESG, and expanding our domestic capacity. The last point is an interesting one.

By 2035, the Government aims to be sourcing at least 10% of the UK’s critical minerals domestically (with a further 20% from recycling products that contain them). The fact that we have this much potential may surprise those living outside of industry hotspots like County Durham and Cornwall.

Currently, most may associate the sector with countries such as the Democratic Republic of Congo (cobalt), Brazil (ferro-niobium), and China (lithium and others). Fewer may be aware that Cornwall holds what is believed to be Europe’s largest lithium deposit, or that the largest tungsten deposit outside of China is in Plympton, Devon. Due to a lack of recycling facilities, the UK is a net exporter of copper, despite our domestic requirements for copper projected to double by 2035 to meet our climate targets. This highlights a need for enterprise and innovation if we are to increase our domestic resources and bring about circularity in the sector.

Nationwide, it’s all hands on deck. From the Scottish Government’s Draft Circular Economy Strategy and the Welsh Government’s Beyond Recycling, to the Critical Minerals Challenge Centre in Exeter and this pioneering magnet recycling plant in Belfast — Westminster is not alone in its desire to make the critical minerals supply chain more ethical, sustainable, diverse, and secure. Hopefully, ambition will only increase, and we will see a regeneration of local economies in the UK’s mineral-rich regions, as well as dignity and prosperity for our international partners.

Three Big Ideas #55

Three Big Ideas is our fortnightly roundup of ideas (and our takes on them) in entrepreneurship, innovation, science and technology, handpicked by the team.

This week, Eamonn Ives discusses new research that suggests the pace at which novel technologies diffuse into the economy is accelerating, Mann Virdee ponders whether we should copy the Chinese when training new engineers, and Jessie May Green takes stock of Britain’s approach to critical minerals.

Work Out

This week we learned that the UK’s unemployment rate hit a near five-year high in the last quarter of 2025, climbing to 5.2%. Among 16 to 24-year-olds, unemployment rose to 16.1%, the highest in more than a decade — and above the EU average for the first time since records began in 2000. Ouch!

Entrepreneurs in our network knew this was happening in real time. As reported by Bloomberg:

“One in four founders have made fewer administrative hires, and 19% recruited fewer juniors in response to AI technological advancements, according to a survey conducted by The Entrepreneurs Network in November. Only 2% said they increased headcount.”

(Incidentally, this is one reason you should complete our latest Entrepreneurs Survey. Your views on tax breaks will be submitted to the Government’s call for evidence, and you may like to know that strategists in all political parties are on tenterhooks to find out which outfit — or none, if you prefer — entrepreneurs say best understands their needs.)

Friend of the network Rachael Twumasi-Corson identifies the dual challenge in the same Bloomberg article:

“It’s scary to hire people, the minimum wage is so high and there’s so many additional protections”...“I would much rather have a team, celebrate wins and figure out ways to solve problems together, but at the moment, my team is ChatGPT and Gemini.”

It’s not just the minimum wage though. While the Government thankfully ditched its pledge to give day-one protection from unfair dismissal, the impact of the Employment Rights Act will still be brutal — here are no fewer than 55 reasons why. As our Research Director Eamonn Ives told Bloomberg:

“Before, the mindset might have been: we’ve got this idea and we’re going to quickly recruit as many people as possible to pursue it.”...“Now startups are thinking twice about taking on new hires who they might not be able to keep on if things don’t pan out.”

The cost of this direction of travel is clear. In a brilliant article for Works in Progress, Pieter Garicano argues — convincingly — that labour laws go a long way to explaining the innovation divide between the US and Europe.

This is seen most obviously when companies like Bird, Grammarly and Hugging Face move explicitly for this reason. But most of the damage is done below the surface. Relative to income, it costs large companies four times more to lay off workers in Germany and France than in the US — a difference arising entirely from regulation. As Pieter writes:

“If it is expensive to lay people off, employers avoid creating jobs that they might subsequently discontinue. Innovation involves experimentation and risk, so jobs in innovative areas of the economy are more likely to be discontinued than jobs elsewhere. High severance costs create a fundamental incentive for European businesses to avoid innovative areas and concentrate on safe, unchanging ones. In the long run, this is a recipe for decline.”

It’s not all doom and gloom, though. Pieter argues that Europe doesn’t need to choose between innovation and worker protection — it can have both, as Denmark and Austria show.

Denmark’s ‘flexicurity’ model lets employers fire almost at will, while the government catches workers with generous unemployment insurance (up to 90% of prior income for two years) and heavy spending on retraining. Austria uses portable severance accounts funded by employers, so workers keep their safety net when they change jobs.

Britain doesn’t have to choose between a safety net and a dynamic economy. But right now, we’re getting the worst of both worlds.

Our Adviser Anton Howes has created an employment cost calculator, which you may find useful. We’ve also compiled some useful links on our Support for UK Entrepreneurs page, including the Government’s new Employment Changes guidance on workplace rights reforms.

Value Judgement

This week, we joined 18 other business organisations in calling on the Government to consult on extending VAT liability rules for online marketplaces. As things stand, some overseas sellers exploit gaps in the current system to avoid charging VAT, giving them an automatic 20% price advantage over British businesses who play by the rules. For entrepreneurs who rely on marketplaces to grow, this is a serious competitive threat.

As well as levelling the playing field, reform could recover an estimated £700 million a year for the Exchequer. What’s not to like?

Leading Light

I’m delighted to share that Gaurav Chawla has joined us as an Adviser. Gaurav is a deep-tech founder, angel investor and university mentor focused on strengthening the UK’s science-to-scale pipeline.

As well as leading Lumirithmic, an Imperial College London spinout, he invests in and mentors early-stage founders emerging from Cambridge, Oxford, Imperial and UCL.

Gaurav is bullish on the UK:

“The UK combines world-class universities with global capital markets and a strong legal framework. The opportunity lies in strengthening risk appetite and improving the pathways between research institutions and commercial markets. With better alignment between policy, capital, and execution, the UK is well positioned to lead in deep-tech commercialisation.”

He also describes our quarterly Entrepreneurs Survey as “invaluable”:

“Policy debates often rely on theory; those surveys surface the lived experience of founders navigating tax policy, capital constraints, hiring, and regulation in real time. If we want to fix the commercialisation gap in UK deep tech, we need to listen to operators and study where companies stall, not just celebrate research output.”

Hear, hear! Now is your chance to do something invaluable (in under 10 minutes).

XOX

Our new buddies at SXSW London have asked us to share two opportunities I think will interest many of you.

First, the London Venture Spotlight: a university-affiliated pitch competition designed to platform emerging startups developing technologies that felt like science fiction just a few years ago. First prize is £100,000 in investment and an on-stage slot at SXSW Pitch in Austin. Find out more here.

Second, SXSW London is also looking for mentors to deliver pre-booked 1:1 sessions with festival attendees, matched by industry expertise. Mentors contribute 100 minutes in total — five focused 20-minute conversations. They’re also seeking roundtable leads for intimate, facilitated group discussions of 10–15 delegates, lasting one hour. Register your interest here.

Anne-Laure Le Cunff's Speech at the Launch of Job Creators

Anne-Laure Le Cunff — neuroscientist, Founder of Ness Labs and Adviser to The Entrepreneurs Network — spoke at the launch of our latest Job Creators report:

I'm the founder of Ness Labs, a science-based platform helping knowledge workers be more productive and creative without sacrificing their mental health. It's work that grew directly out of my research as a neuroscientist at King's College, London where I study curiosity, among other things. And I think curiosity is actually the right word for tonight.

When I read the report, the finding that jumped out at me wasn't just that more than half of the fastest growing companies in the UK have a foreign-born founder. It was the list of countries those founders come from. Twenty-nine nations, six continents. And the most common country of origin? France.

As a French-Algerian person born in Paris, I feel a certain personal pride in that statistic. But more than pride, I feel gratitude. Because the UK gave me something I'm not sure I would have found anywhere else.

I first moved here in 2013. I left for the US in 2015, came back in 2017, and it's now been almost a decade that I call this country home. In that time, I've gone from working in tech, to doing a PhD, to building a company. And the reason I could do all of that here is precisely what makes the UK special: this is a country where you can wear many hats. Where reinventing yourself isn't just tolerated — it's encouraged.

The UK is cosmopolitan, diverse, and creative, combining world-class research institutions with a thriving startup culture — which, for someone building a science-based business, is the perfect combination. Our proximity to Europe also matters to me; I consider myself European at heart and I deeply value the exposure to different perspectives and talent. The UK has a long tradition of intellectual curiosity and exploration, and given that I study curiosity for a living, I can't think of a better place to be.

Now, I want to be honest. I've been fortunate. I moved here before Brexit, which meant I didn't face the visa hurdles that many brilliant people face today. But increasingly, when I meet talented researchers and founders from abroad — people who would be extraordinary additions to our economy — I hear the same story. The processing delays are unpredictable. The costs are steep, especially for early-stage companies. And too often, as a result, these people decide it's simply easier to go somewhere else. That's real talent, real companies, and real jobs that the UK will never see.

So I want to highlight two recommendations from tonight's report that I think deserve real attention.

First: protect fast-track settlement for exceptional talent. When someone already has a proven track record, forcing them onto a ten-year settlement track sends the wrong signal.

Second: design a selective Spinout visa for graduates and academics. I've seen firsthand, at King's College, London and across UK universities, how much world-class research never contributes to the economy, sometimes simply because the researcher doesn't have the right to stay and build a business.

The UK has something genuinely rare: a combination of intellectual curiosity and entrepreneurial energy that draws people from all over the world. Let's make sure we don't close the door on the very people who help make this country exceptional.