UK entrepreneurs have a perception versus reality problem

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Amidst Global Entrepreneur Week, a report from Enterprise UK has found the UK ill-placed for global entrepreneurship.

The survey data gathered online by YouGov and YouGovStone between November 2 and November 4 2010. The total sample targeted UK entrepreneurs and small business owners and the sample size was 1,046 adults.

It found over 50% of the notional adult population want to start a business but only 5.8% are in the actual process of starting a business.The rate of those starting a business in the US is 8 percent, Brazil 15 percent and in China 19 percent.

It estimates an increase in self-employment rates of only 1% (or 300,000 entrepreneurs), would boost the UK’s GDP by around 1.5% and add approximately £22bn to the UK economy.

Although Enterprise education doubles your chances of business success, only four million go through further education each year, and enterprise is still not a staple of the education system.

The YouGov poll, revealed in a government report called “Make a Job, Don’t Take a Job” found that among entrepreneurs:

• 77% want the government to play a key role in supporting entrepreneurs
• 79% agree that the UK’s entrepreneurs are responsible for securing a strong economic recovery
• 65% agree there are good opportunities for businesses right now

  • Lesley

    I liked your headline and it intrigued me ebnough to click on your link from Twitter which was your objective.. But quick question – why do you say perception vs reality in your headline? because of the low start up rates for businesses? isn’t that related to insufficient access to finance? business owners may want to start businesses, but actual rates may be lower due to other barriers to entry, so your picture’s a bit misleading don’t you think?

    or is your angle another case of a mismatch between perception vs reality perhaps?

  • Damon Oldcorn

    It is all about need – a bit like the age old question of why there are so few top class British tennis players compared to other countries. If it is a question of poverty and not eating on a consistent basis it will create a drive in higher numbers to break out. Just watch the percentage rates go up in Ireland in the next years as people twist and turn to survive or move to global centres that have more opportunities. Despite the economic downturn there are still less risky options open to the majority of people compared to the entrepreneurial dream.

  • Michael Mahemoff

    Interesting stats. 5.8% is actually higher than I would have expected in the UK.

    “Although Enterprise education doubles your chances of business success”

    Is there a reference for this? It would need definitions for education and success to make sense, and also it doesn’t indicate causation.

    • Nick Pelling

      I suspect it’s a stat that will turn out to be an urban myth happily promulgated by business schools, bless ’em. :-(

      The missing stat at the end of the article, of course, is the “90% believe that there is no real access to finance in the UK”, which would vindicate the 94.2% who choose not to try to start up a business. :-(

  • David Upton

    As an SME owner and entrepreneur, I’m impressed by the opportunities on offer in the UK. In the last 18 months, for example, we’ve won a grant from the Technology Strategy Board and a research contract from MOD. It may once have been the case that you had to have a former cabinet minister on the board to do this: now, you just apply, and they judge you by the quality of your ideas. There are also many free (or cheap) meetings and seminars available to make contacts and get advice. (Follow Mike Butcher to find them…)
    So please consider it, just expect to stay awake a few nights worrying about cashflow – but it always seems to work out in the end.

  • Disrupter

    Failure is perhaps the biggest hurdle. It not the same across different nations. Failure in the UK is very much tainted and we don’t as a nation celebrate the act of creation. We are far too conservative and that is why we are losing out. It is cultural. Until we encourage people and empower them to actually get out there and start something [even if it might fail], any amount of funding is a waste of time.

    • David Upton

      However much encouragement and empowerment ‘we’ provide (and as I said I believe this is quite a lot nowadays), ‘I’ have to go and do it. To blame cultural biases in the UK is a bit of a cop-out.

      • Disrupter

        It’s not a cop out. We do not have the right mentality in our risk averse culture [unless finance, it seems]. We offer plenty; agreed, but its not the same as knowing that if it all goes tits up, you’ll be looked at as a hero who tried. It’s puts many off from trying in the first place as they fear how they will be viewed by family, friends and even potential future employers.

        The UK just does’nt get failure, too frightened to make mistakes.

      • Damon Oldcorn

        Yes definitely a different attitude to trying and failing – bankruptcy = badge of honour etc as the way the US thinks in the Valley and on the East coast tech centers. Anyone beginning to fail here in a startup – cast adrift very quickly from the network. Best swept under the carpet…. only want to PR the winners. Easier option not to try or to limit damage which in the end will never build exciting world beating companies. There are very few within the London entrepreneurial community that really step over the line and are willing to bet the farm. Luckily there are still some who keep trying……

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