The success of a nation correlates with that of its entrepreneurs. They push the boundaries of science and technology. They commercialise inventions and adapt innovation to the needs of ordinary people. They challenge incumbents, thereby raising standards. An entrepreneurial nation is one that understands the value of its entrepreneurs and backs them to be engines of growth. Despite the economic pessimism we are used to hearing, Britain can rightly claim to be one.
The Entrepreneurs Network’s recent report, “Entrepreneurs Unwrapped“, published in partnership with American Express, shows that the overwhelming majority of people (86 per cent) believe entrepreneurs make an important contribution to the UK economy. In fact, across every gender, age bracket and geographic region we polled, the proportion of respondents saying entrepreneurs make an important contribution to the UK economy never falls below 78 per cent. We are much more likely to think that entrepreneurs are underappreciated than to say the contrary.
Entrepreneurship is becoming increasingly accessible, which may explain this positive outlook. In his book Dragons, Liam Byrne, Labour MP and chair of the Business Select Committee, summarises the history of British enterprise through the stories of ten entrepreneurs. Most were born rich and used family wealth to finance their ventures. Launching a business in this country used to be a far more expensive undertaking, which made surnames – Rothschild, Rhodes – more significant than other attributes.
But not any more. The cost of building a business has been decreasing for decades. Anyone with internet access can create targeted marketing campaigns on Amazon or track sales on Shopify. Connections still make life easier, but founders don’t necessarily need them, or family money, to start a business. Entrepreneurship is not only for the big (sur)names. In the early 1970s, the UK had around 800,000 businesses; today, the figure is closer to 5.5 million – around a five-fold increase on a per capita basis.
According to our poll, three times as many respondents, representative of the British public, thought that entrepreneurial success owes more to effort than luck. While 71 per cent describe entrepreneurs as “creative and imaginative” and 70 per cent as “open to new ideas”, only 14 per cent said that they “come from a privileged background”. This might explain why the majority of people (61 per cent) think that business owners deserve the money they make.
However, Britain still has unmet entrepreneurial potential. Firstly, the general public’s perception of how much it costs to launch a business is out of sync with the times. When asked, the average response clocked in at £34,304, while 14 per cent thought it cost more than £50,000. However, previous research we carried out of small business owners revealed that a figure closer to £5,000 might be more accurate (nearly a seventh of the average expectation).
There is room for progress. Young people rank access to funding as the top challenge to becoming an entrepreneur. Educational and cultural campaigns – like David Cameron’s StartUp Britain a decade ago – can help by emphasising the real costs of starting a business. Rhetoric can only get us so far, however. As the venture-capital investor James Wise argues in Start-Up Century, the government should look at creative ways to help young people turn ideas into reality. If we can dole out student loans to anyone hoping to go to university, why not allow them to use that money to start a business?
Our poll also shows that a business degree is not necessarily the requisite education for entrepreneurship. MBAs may train good managers but business builders need different attributes. Entrepreneurs said that learning to find the confidence to sell themselves as a founder was the most difficult skill they had to master. This was followed by developing the confidence to pitch their business idea. The importance of soft skills like these cannot be overlooked if we want to see a new generation of successful entrepreneurs in Britain.
Expanding mentorship opportunities can make a real difference. Knowing an entrepreneur at a young age may be one of the more impactful interventions to kick-start an entrepreneurial career. In our poll, 71 per cent of entrepreneurs said they knew someone growing up who had started a business, compared with just 41 per cent of the general public. According to research by Endeavor, a network of entrepreneurs, the most successful tend to have worked for other high-performing start-ups before launching their own businesses. Building an organisation requires audacity. Witnessing or experiencing this process gives people not only the skillset but also the mindset to push through.
Britain is fortunate to be an entrepreneurial nation. The desire to build businesses is a desire to create value for society. If Britain can encourage entrepreneurship, a more prosperous, productive and resilient country beckons.