Green Entrepreneurship

Environmental sustainability has shot up the political agenda in recent years. Consumers are increasingly demanding greener alternatives, and innovative companies are developing them.

In Green Entrepreneurship, Eamonn Ives examines how entrepreneurs are helping to deliver not only a more sustainable tomorrow, but also economic growth, exports, and jobs. Throughout the report, he provides a number of policy recommendations which the government could adopt to accelerate the green transition and reap the opportunities it offers.

Resilience and Recovery

COVID-19 has posed significant challenges to most companies, but our new analysis of data from Beauhurst indicates that female-led, high-growth companies have been disproportionately impacted throughout the pandemic. However, despite this impact, more than 60% of female-founded, equity-backed businesses are now operating with minimal disruption to their business, showing that female-led businesses are fighting back.

Resilience and Recovery, a new report from The Entrepreneurs Network produced in partnership with Barclays, combines discussions with female founders and original data analysis, to identify the reasons why female entrepreneurs have been disproportionately impacted by the COVID-19 pandemic.

The Case for Remote Work

In the midst of the COVID-19 pandemic, the case for short-term remote work is obvious. But the case for long-term remote work is also much stronger than is typically thought. Remote work allows firms to hire from outside their local labour market, which may mean they can employ more productive workers, and the benefits of workers clustering together have shrunk or disappeared entirely. 

The Case for Remote Work, written by Matt Clancy, assesses the evidence base around remote working, before suggesting a handful of policies which governments could implement to capture the benefits posed by a greater shift to remote working.

Educating Future Founders

Entrepreneurship education has traditionally taken place at universities, but there is strong evidence that earlier interventions can develop non-cognitive skills that are key to entrepreneurial success, such as creativity, persistence, and communication.

In Educating Future Founders, we recommend that governments invest in randomised control trials to gather evidence on interventions to boost entrepreneurship, and use the results to promote entrepreneurship education at a secondary level.

Upgrade

Digital technology has enabled businesses to continue trading in the most difficult of circumstances. As the UK economy recovers and reopens, increasing the rate of digital adoption by SMEs will be vital.

Although Britain is a world-leader in innovation, too often best practices are not spreading to all SMEs. In Upgrade, we argue that poor take-up of digital technologies by small businesses is a central element in our pre-COVID productivity crisis, and that increasing uptake will be vital to the economic recovery. We also quantify the £16.6bn cost to the UK economy of this digital gap and show what closing that gap would mean in terms of increased productivity.

Unlocking Growth

Access to capital is vital for most businesses to realise their growth ambitions. Yet navigating the array of funding options can be challenging. Polling suggests almost one in 10 entrepreneurs are discouraged from seeking external finance, even though their businesses have real funding needs.

In Unlocking Growth, we evaluate the funding options open for SMEs and propose key reforms to boost access to capital – from simplifying Research & Development Tax Credits, to experimenting with lottery-style funding to channel more grant-funding to start-ups, to liberalising rules around investments from defined-contribution pensions by reforming the fee cap.

Cashing Out

New technologies mean it has never been easier to avoid having to use cash, and the transition to a ‘cashless economy’ presents interesting opportunities – for individuals, businesses and the government. But parts of the press have decried the thought of cash vanishing from daily life, and in certain places around the world, attempts to slow the move away from cash are gaining traction. 

In Cashing Out, Fred de Fossard looks at the rise of cashless commerce, argues that politicians should embrace the phenomenon, and recommends efforts to enable going cashless would be a better way to allay any existing fears around a cashless economy. 

The Startup Manifesto

Startups are a key source of dynamism in the economy – bringing new goods and services to market, while experimenting with innovative business models. Ensuring the conditions are right for entrepreneurs to start new companies, and scale them once they have, is therefore critical.

In collaboration with The Coalition for a Digital Economy (Coadec), we have produced a manifesto to help create those conditions. The Startup Manifesto proposes 21 specific policies across three key areas: access to talent, access to investment, and regulation. 

Here and Now

Though women make up just a fifth of business owners, we are seeing increasing numbers setting up companies, and receiving a growing share of investment. In Here and Now, we reveal that while 11% of startups that raised equity investment for the first time in 2011 were female-founded, by 2018, that figure had nearly doubled. We also show that, once funded, the percentage of female-founded startups that raised additional rounds of capital was similar to non-female-founded firms. 

In order to close the gender gap for good, our report makes recommendations for the government, schools, the media, and venture capitalists – from shining a light on female entrepreneurs, to tackling the STEM drop-off rates among girls in education.

Future Founders

In Future Founders, we set out to understand how young people think about entrepreneurship. Through polling of 14-25 year olds, we gained an insight into the aspirations, intentions, and motivations of the next generation of potential entrepreneurs. We found that over half have thought about, or already have, started a business – and only 15% said they had no intention of starting one. We also found that respondents who have a friend or family member who have started a business are more likely to do the same – suggesting that exposure to entrepreneurship is infectious. 

The results of our polling allow us to conclude that the ability to solve social problems might be a more persuasive reason to start a business than getting rich quickly, that more needs to be done to promote relatable entrepreneurial role models, and that simply not knowing where to start remains the single biggest barrier to founding a business.

Job Creators

Immigration is critical to the success of the UK. While just 14% of UK residents are foreign-born, 49% of the UK’s fastest-growing businesses have at least one foreign-born co-founder. These dynamic, innovative businesses bestow jobs and growth opportunities, and are vital to the strength of Britain’s economy. 

In Job Creators, Sam Dumitriu and Amelia Stewart analyse Britain’s fast-growing, immigrant-founded companies, and suggest a handful of visa reforms to allow the UK to retain its status as a top destination for entrepreneurial talent.

Management Matters

Too often, viable companies fail due to bad management, even when the fundamental idea behind the business is sound. Good management, however, is linked to stronger productivity, faster revenue and employment growth, and a higher chance of firm survival. Improving the management of Britain’s businesses is no small matter – evidence suggests that management explains nearly a third of the gap between the top and bottom performing 10% of companies in the UK.

In Management Matters, Sam Dumitriu recommends practical reforms, including tax breaks for self-funded work-related training, to encourage greater investment in management capability to reduce the rate of unnecessary business failure.

APPG for Entrepreneurship: Enterprise Education

To thrive in the modern world, Britain’s next generation must be adaptable to change. Up until relatively recently, a job for life was both possible and preferable. It’s increasingly neither. Universities have been central to many of the great intellectual revolutions across history – now they must embrace enterprise education to imbue students with the necessary enterprising skills to flourish in the twenty-first century.

Government has a role to play. Political action — or inaction — has significant repercussions for how enterprise education is delivered. This report aims to inform the government about the successes, challenges and opportunities for delivering enterprise education at universities. Its recommendations are based on responses to a Call for Evidence and aim to work with the grain of the latest thinking and practice.

Human Capital and Business Stay-Up

In recent decades, governments worldwide have employed an array of different policy tools to try to increase start-up rates in their countries, but relatively little attention has been paid to how to support ‘business stay-up’. In that it is among the fastest growing small businesses that employment growth, innovation and productivity gains are strongest, this lag in the progress of entrepreneurship policy should give us cause for concern.

Of those approaches to supporting business sustainability that have been tried, efforts to improve management practices have shown promise. This report adds to a growing body of evidence in this area, new research supporting the importance of human capital to entrepreneurial outcomes.

Author Gabriel Heller Sahlgren’s research substantiates a relationship between business owners’ specific areas of qualification and the growth of their enterprise. Moreover, and more importantly, he further finds that not all areas of qualification are equal in terms of stimulating success. The training obtained through programmes in business, social science, and law, and in technical areas, such as engineering, appear to lead to employee growth – whereas programmes relating to other subject areas do not.

Accordingly the author argues that governments should seek ways to incentivise training in high impact areas, and in management skills specifically. The most promising approaches, he finds, appear to focus on task-related training, in both an operational and specific sense. To maximise the probability of firm success, owners must therefore learn the operational skills of organisation and management, while at the same time keep up-to-date with the latest developments in the field in which they operate.

APPG for Entrepreneurship: Women in Leadership

The UK needs more early-stage businesses achieving longer-term survival and scale. Supporting female entrepreneurs is not just about increasing the number of women-owned businesses: it is about raising their performance and growth potential. Not only will this lead to more established SMEs contributing more to economic growth, but they could also serve as inspiration to young girls.

As more and more women turn promising ideas into thriving businesses, they will make up a greater share of entrepreneurial role models, thereby encouraging more women into the pipeline – from schoolgirls considering STEM to founders scaling big. According to our survey, less than a third of women now think gender has been a hindrance to success. However, the figure for men is a negligible 1 per cent. 

APPG for Entrepreneurship: Tax Reform

It is vital that, as Britain leaves the European Union, we are one of the best places in the world to start and grow a business. Getting tax policy right is key to creating a business environment that fosters entrepreneurship. Tax reform can deliver faster economic growth, boost employment and raise wages.

Demographics and Entrepreneurship

Developed countries face a long-term decline in entrepreneurship that is at least partially driven by demographics. Since demographic trends cannot be easily reversed, countries will have to improve the environment in which entrepreneurs and businesses operate, to encourage more and better entrepreneurs.

This series of essays are published in partnership with Canada’s Fraser Institute, the Centre for Strategic and International Studies (CSIS) in the US and the Institute of Public Affairs in Australia.

Mentoring Matters

In partnership with Barclays, this year the Female Founders Forum focused on mentoring. This report is based on the insights of speed-mentoring events held across the country, which were attended by both experienced and novice female entrepreneurs. Also, following up the theme of last year's Untapped Unicorns report, we have updated updated the data on female founders' access to equity finance.

Parliamentary Snapshot 2017

This is the fourth Parliamentary Snapshot. It uncovers MPs’ views on policies impacting entrepreneurs, providing unique insights on the opinions and working knowledge of the House of Commons. Once again, this report is supported by Bircham Dyson Bell (BDB).

Key finding include:

• 66% of Conservative MPs think “leaving the EU through a hard Brexit” would be good for entrepreneurship, only 8% of Labour MPs think the same.

• 71% of Labour MPs think “remaining within the EU” would be positive for entrepreneurship in the UK, only 10% of Conservative MPs think the same.

• Greatest divergence in four years of this survey between the two main parties on lowering personal taxes, with 91% of Conservative MPs thinking it would be good for entrepreneurship, compared to just 26% of Labour MPs.

• Over four years of the survey, Parliament has shown growing cross-party support for a more liberal immigration policy for British businesses. “Making it easier for entrepreneurs to move to the UK” is the second most popular change for MPs (79% of MPs are positive and 4% just negative), and we have seen increasing support from both parties for “making it easier to hire skilled workers from abroad” (62% of MPs are positive and 14% negative).

• Although MPs’ knowledge about initiatives to support entrepreneurs have risen against previous years, too many initiatives remain unknown. 54% of the MPs have never even heard of Venture Capital Trusts or don’t know enough about it to know whether it’s effective.

A Boost For British Businesses

Sixty-six entrepreneurs and experts have put their name to a letter calling on the next Government to put together a coherent plan to boost Britain’s businesses.

The letter supports this detailed policy report, which includes contributions from the Institute of Directors, Federation of Small Businesses, Nesta, Adam Smith Institute, Sage, IPSE, SQW, Coadec and Nesta.

The policy asks are at the vanguard of research in the UK; don’t rely on the vagaries of Brexit negotiations; could be adopted by all political parties; and wouldn’t put a significant strain on the exchequer. The project is sponsored by Sage.