Britain needs more entrepreneurs to conquer their fear of failure and to start new businesses, according to a think-tank report.
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The country’s best brains need encouragement to leave their well-paid comfort zone to help the economy – and more women need to go into business as well.
Only one in four British entrepreneurs is a woman and easing the way for them to start a business would immediately increase the number of new firms, says the report Venturing Forth: Increasing high value entrepreneurship, published by theSocial Market Foundation.
Well-qualified and highly paid employed graduates are identified as the best hope for starting a successful small business, but too few are willing to take the chance, says the report.
Reducing the risk
Many pick up a good business idea while working for someone else but fail to grasp the opportunity.
Just under half of would-be entrepreneurs told researchers they wanted to start a business, but 62% could not access the finance to do so.
Since 2012, the government has tried several initiatives to reduce the risk of investing in a start-up firm with lending and tax incentives, but this still does not go far enough in encouraging entrepreneurs to take action.
The foundation also looked at how entrepreneurs get going in other countries and found places like Sweden, the United States and the Netherlands had at least 50% if not twice the number of start-up businesses than the UK.
Britain lags other countries
As a result, the report lists a dossier of recommendations aimed at supporting entrepreneurs, including:
- Removing restrictive clauses in employment contracts that stop employees competing against former employers with a new business
- Introducing flexible hours for entrepreneurs so they have time to give their new business ideas
- Offering a statutory right to return to a former job if a new business falls flat
- Looking at more tax reliefs and incentives for entrepreneurs and their investors
Report author and the foundation’s chief economist Nida Broughton told specialist investment web site SEIS.co.uk: “The country needs entrepreneurs to get the economy really moving. Recovery and growth are moving in the right direction, but are still weak.
“The government talks about helping small business, but the truth is Britain is still far behind the progress made in many other countries.
Chancellor George Osborne introduced SEIS in Budget 2012 to help new companies by offering investors generous tax breaks to offset the risk of funding a start-up.
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