We're in a new Dragon's Den economy

Employers need to realise this.

As the new series of Dragons’ Den starts, creative ideas and business innovations are once again entering our living rooms every Sunday night. From the genius to the outright insane, budding entrepreneurs pitch for their business and battle in the den to get that all important investment. But this process is not just confined to our TV sets, it is happening all over the UK. With the government investing more money into its Start-Up Loans scheme, the prospect of starting your own business and becoming an entrepreneur is increasingly stronger.

At this year’s World Economic Forum, entrepreneurship was regarded as a major factor that will improve economic prosperity and employment figures. Economic studies from around the globe frequently link entrepreneurialism with rapid job creation, GDP growth, and long-term productivity increases. However, it is not just start-ups, new business ideas and government funding that should lead and support such initiatives; existing organisations, particularly larger global enterprises must also encourage entrepreneurial spirit within in order to succeed in today’s challenging economic and trade environment.

Currently, businesses face two dilemmas: they need to make their operations as efficient and cost-effective as possible to run better, while embracing and investing in innovative technologies and processes to drive growth and run differently. These are intrinsically linked, as savings from operational improvements are essential to fund investments in new areas. And, as leading business heads and political figures agree, it is people who will help overcome these problems and boost the economy.

But where does a business begin to tackle these challenges? Firstly, they need to carefully assess the wealth of creative talent throughout their organisation across all geographies. They can do this by having a strong performance management process in place that monitors and records employee progress, key successes and areas for improvement. Organisations can use such information to map specific skills to certain projects, while identifying top performers.

Secondly, it is about being more proactive. Promoting innovation and an entrepreneurial culture internally is imperative; from suggesting new product lines and innovative business ideas to identifying new niche markets to target or ways to foster greater teamwork, employees should be able to share and voice their opinions and work with the right people to develop them.

One way of enhancing this entrepreneurial spirit is to try and maintain a start-up culture – decentralised and proactively pushing opportunities and accountabilities further down the organisation (otherwise known as a bottom-up approach). This will help encourage new and existing talent to stay within the company long-term. If they can spot opportunities to really make a difference and be adequately rewarded then they are likely to flourish, much like the winners in the Den.

Adopting and promoting this type of culture is really the way forward. You can not manage talent centrally; you have to give employees the reins to run with specific projects and ideas. For example, businesses could create their own Dragons’ Den by running competitions and projects for individuals or teams to brainstorm new ideas and then present them to the Board. Good ideas can come from anyone within the organisation - it shouldn’t be confined to senior management. However, it is important to remember and make clear that entrepreneurship and innovation does not necessarily need to be the next big idea that will completely change the business. It can be a small incremental change, which is revolutionary and undoubtedly creative in its own right.

Ambitious individuals can also be given the chance to develop their own businesses within the larger enterprise – a model that has worked incredibly well at Cognizant. We restructured our business along three new horizons – traditional service lines, more recent service lines and entirely new areas we wanted to invest in. In forming the latter, we encouraged employees to develop business plans for new products and services, many of which we are now funding. While Cognizant’s process does not make for as good viewing as Dragons’ Den and there are not large piles of cash in the meeting room, it provides the entrepreneurs the opportunity to present ideas and secure investment. This strategy gives them the opportunity to adopt an entrepreneurial role and the freedom to launch and grow a part of the business by themselves. For employees, having this type of empowerment while benefiting from the existing support, client base and infrastructure of the wider business is hugely appealing. They can gain the satisfaction that their ideas and management processes have impacted the business in a positive way, and they have an opportunity to develop and grow their ideas themselves but do not need to put their livelihood on the line by starting an entirely new venture.

Business leaders need to create a work environment that prides itself on its people and skills and uses them to best effect to innovate, increase growth and compete in challenging economic times. If employers limit the opportunities for entrepreneurial talent, employees are likely to take their ideas elsewhere or even start their own businesses. Undoubtedly, more start-ups will boost the economy, but I believe existing companies can really contribute further by encouraging innovation within their organisations. They just need to make sure the entrepreneurial culture is shared and understood by everyone. It is a case of encouraging employees to declare "I’m in", rather than "I’m out".

James Caan. Photogaph: Getty Images

Sanjiv Gossain is the SVP & Managing Director at Cognizant

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Debunking Boris Johnson's claim that energy bills will be lower if we leave the EU

Why the Brexiteers' energy policy is less power to the people and more electric shock.

Boris Johnson and Michael Gove have promised that they will end VAT on domestic energy bills if the country votes to leave in the EU referendum. This would save Britain £2bn, or "over £60" per household, they claimed in The Sun this morning.

They are right that this is not something that could be done without leaving the Union. But is such a promise responsible? Might Brexit in fact cost us much more in increased energy bills than an end to VAT could ever hope to save? Quite probably.

Let’s do the maths...

In 2014, the latest year for which figures are available, the UK imported 46 per cent of our total energy supply. Over 20 other countries helped us keep our lights on, from Russian coal to Norwegian gas. And according to Energy Secretary Amber Rudd, this trend is only set to continue (regardless of the potential for domestic fracking), thanks to our declining reserves of North Sea gas and oil.


Click to enlarge.

The reliance on imports makes the UK highly vulnerable to fluctuations in the value of the pound: the lower its value, the more we have to pay for anything we import. This is a situation that could spell disaster in the case of a Brexit, with the Treasury estimating that a vote to leave could cause the pound to fall by 12 per cent.

So what does this mean for our energy bills? According to December’s figures from the Office of National Statistics, the average UK household spends £25.80 a week on gas, electricity and other fuels, which adds up to £35.7bn a year across the UK. And if roughly 45 per cent (£16.4bn) of that amount is based on imports, then a devaluation of the pound could cause their cost to rise 12 per cent – to £18.4bn.

This would represent a 5.6 per cent increase in our total spending on domestic energy, bringing the annual cost up to £37.7bn, and resulting in a £75 a year rise per average household. That’s £11 more than the Brexiteers have promised removing VAT would reduce bills by. 

This is a rough estimate – and adjustments would have to be made to account for the varying exchange rates of the countries we trade with, as well as the proportion of the energy imports that are allocated to domestic use – but it makes a start at holding Johnson and Gove’s latest figures to account.

Here are five other ways in which leaving the EU could risk soaring energy prices:

We would have less control over EU energy policy

A new report from Chatham House argues that the deeply integrated nature of the UK’s energy system means that we couldn’t simply switch-off the  relationship with the EU. “It would be neither possible nor desirable to ‘unplug’ the UK from Europe’s energy networks,” they argue. “A degree of continued adherence to EU market, environmental and governance rules would be inevitable.”

Exclusion from Europe’s Internal Energy Market could have a long-term negative impact

Secretary of State for Energy and Climate Change Amber Rudd said that a Brexit was likely to produce an “electric shock” for UK energy customers – with costs spiralling upwards “by at least half a billion pounds a year”. This claim was based on Vivid Economic’s report for the National Grid, which warned that if Britain was excluded from the IEM, the potential impact “could be up to £500m per year by the early 2020s”.

Brexit could make our energy supply less secure

Rudd has also stressed  the risks to energy security that a vote to Leave could entail. In a speech made last Thursday, she pointed her finger particularly in the direction of Vladamir Putin and his ability to bloc gas supplies to the UK: “As a bloc of 500 million people we have the power to force Putin’s hand. We can coordinate our response to a crisis.”

It could also choke investment into British energy infrastructure

£45bn was invested in Britain’s energy system from elsewhere in the EU in 2014. But the German industrial conglomerate Siemens, who makes hundreds of the turbines used the UK’s offshore windfarms, has warned that Brexit “could make the UK a less attractive place to do business”.

Petrol costs would also rise

The AA has warned that leaving the EU could cause petrol prices to rise by as much 19p a litre. That’s an extra £10 every time you fill up the family car. More cautious estimates, such as that from the RAC, still see pump prices rising by £2 per tank.

The EU is an invaluable ally in the fight against Climate Change

At a speech at a solar farm in Lincolnshire last Friday, Jeremy Corbyn argued that the need for co-orinated energy policy is now greater than ever “Climate change is one of the greatest fights of our generation and, at a time when the Government has scrapped funding for green projects, it is vital that we remain in the EU so we can keep accessing valuable funding streams to protect our environment.”

Corbyn’s statement builds upon those made by Green Party MEP, Keith Taylor, whose consultations with research groups have stressed the importance of maintaining the EU’s energy efficiency directive: “Outside the EU, the government’s zeal for deregulation will put a kibosh on the progress made on energy efficiency in Britain.”

India Bourke is the New Statesman's editorial assistant.