But where will they all come from?
Andrew Chappell 21st March 2011
Britain’s budget for the fiscal year of 2011/12, which is due to be released on the 23rd March, is being built up to be the “most pro-growth this country has seen for a generation”. Prime Minister David Cameron and his Conservative – Lib Dem coalition are attempting to alter the complexion of the UK economy, one which is to be built on “less debt, more saving; less borrowing, more investment; less dependence on financial services, more new industries, exports and trade”.
On the face of it, it sounds like exactly what Britain’s stagnating economy needs: an entrepreneurial kick up the back side. The current coalition government are attempting to diversify the economy away from the dominance of financial services and a large public sector. To enable their vision to become a reality they have already begun creating an environment in which entrepreneurs and new start-ups could thrive.
The announcement of 10 new enterprise zones in some of the more deprived areas of the country, on top of the Merlin Project and the Green Investment Bank (or Fund, depending on how the finally decide to call it) will be music to the entrepreneurs ears. Lower corporate tax rates, more accessible finance for SME’s and looser regulations for start ups are all designed to create an entrepreneurial friendly environment. One which creates certainty: the basis for investment whatever the level or industry.
Once you have the environmental ingredients for our entrepreneurial cake all we need now is the most important ingredient of them all: the entrepreneurs. The PM has openly admitted that the “only strategy for growth” is to get behind Britain’s entrepreneurs and make it easier for them to invest and grow. My question is: where will they all come from? Has Britain secretly been hiding an entrepreneurial goldmine of characters and ideas in a leafy suburb of our green and pleasant land? Are we a nation of entrepreneurs and risk takers?
A study by the Boston Consulting Group produced an innovation index relating to the manufacturing industry. It ranks countries according to a composite index figure, calculated through innovation input statistics such as Fiscal attitudes toward innovation, and other statistics regarding the state of the education system and the quality of the workforce. The composite figure also includes Innovation Performance statistics such as Intellectual Property Generation and Employment Growth as a consequence of innovation. Here the UK is ranked 15th in the world and 7th within its large country competitors. Not the top of the class by any means, with definite room for improvement. A little encouragement for Mr Cameron and his men, is that the report went on to say that there is a definite positive correlation between government funding of R&D and innovation performance. Perhaps they are going through the right motions.
On the other hand extensive research has already been made into what determines whether someone can be an entrepreneur or not. Their X-factor if you like. Psychological and environmental reasons have been presented, recent research however, by Nicolau et al,(Management Science 2008, 54,1, p 167) probed idea that entrepreneurship could have genetic foundations. Indeed they also found a strong relationship between a person’s genetic make-up and their tendency to involve themselves in entrepreneurial activity. Could this mean that the governments’ hopes are based upon the genetic make-up of our country? Hard to tell.
Considering that we were already ranked as the 2nd easiest country for doing business in and the 6th easiest for starting a business within the OECD in 2010, were those conditions not already enough to stimulate investment and innovation or is it just plainly that we are not a country of entrepreneurs and innovators? There are still a lot of unknowns as to whether this growth strategy will prove a success. Only time will tell.