Last week, Lord Young of Graffham, the former enterprise minister in the Conservative governments of the 1980s, published his review of entrepreneurship in the UK.
His report, “Make Business Your Business: supporting the start-up and development of small business” is not as comprehensive as Bolton’s massive tome from forty years ago.
Nevertheless, in examining whether the right conditions and support are in place to enable the current and next generation of entrepreneurs to build and sustain successful businesses, it does propose a number of useful policy interventions that could increase the rate of entrepreneurial activity in the UK.
One of the main recommendations, and one that heavily featured in the press during the last few days, is the new StartUp Loan for young people. This was originally proposed in a report from VirginMedia on young entrepreneurs last year and is based in the premise that if young people can get a loan to go to university, then why shouldn’t they also get a loan to start up a new business. As a result, the UK Government is now making £82.5 million available immediately to enable potential entrepreneurs aged between 18 and 24 to get £2500 to kick-start their business.
Another proposal from Lord Young, which has already been agreed by the UK Government, is the opening up of vacant or under-used space in its estates so that business start-ups can get access to premises. Making such managed spaces, which would also have support and coaching available to tenants, could help many more new businesses to get off the ground.
This blog has regularly discussed how small firms can get better access to the £230 billion of goods and services that are procured by the government every year. One of the obstacles to accessing such opportunities is the amount of bureaucracy involved in putting together bids for such work and the proposal, to remove prequalification questionnaires for all contracts worth less than £100,000 should help entrepreneurs, whose time is limited, to get a better chance of success in supplying goods and services to the public sector.
Finally, the main part of Lord Young’s report focuses on one the biggest obstacles to start-up success, namely access to finance. Despite the UK Government’s best efforts, it is clear that many start-ups are struggling to gain access to vital funding from the most traditional source of cash, namely the banks. To counter this, it is suggested that start-ups could, and should, access alternative sources of finance from other providers such as microcredit, crowdfunding and business angels.
Therefore, Lord Young’s report is to be welcomed as a wake-up call to what can be done to support small firms in the UK. However, it is worth noting that is far less comprehensive than the Entrepreneurship Action Plan produced by the Welsh Development Agency twelve years ago when Wales led the world in the development of a regional enterprise strategy that would boost the entrepreneurial potential of the nation.
Indeed, we need to re-examine the whole approach of Welsh Government policy towards entrepreneurship as the number of new businesses has plummeted from 11,525 new businesses in 2004 to 7,505 in 2010, costing thousands of jobs and hundreds of millions of pounds to the Welsh economy.
And one place to start would be by clarifying how the proposals in Lord Young’s paper actually apply to Wales as it would seem that the start-up loans for 18-24 year olds are only applicable in England.
In addition, there has been no announcement from the Welsh Government on whether it will make some of its vacant buildings available to new firms, despite the fact that there have recent news reports of such premises lying empty across Wales. Certainly, a good place to start any entrepreneurial renaissance in Wales is with young people who have the ideas, drive and energy to take advantage of new opportunities in a digital globalising world.
We therefore need to ensure that they are not at any disadvantage as compared to young people elsewhere in the UK, especially when it comes to accessing the vital finance and access to premises that can help or break a new business.
