The government is staking its reputation on the country's entrepreneurs lifting us back into prosperity and creating jobs to fill the employment gap left by cuts in the public sector. To succeed it needs to understand the trends that are impacting enterprise, argues Mike Paice FRSA.
Last year the government used Global Entrepreneurship Week (GEW) to launch its challenge of making this “the most entrepreneurial decade ever” and acknowledged that the need to develop a strong enterprise culture has never been more important. Disappointingly - but not unusually for governments - it followed this by withdrawing funding from the organisation leading delivery of the initiative in the UK.
It is widely acknowledged that a strong culture of entrepreneurship offers a triple win. First, it empowers individuals hungry to use their own creativity to achieve success. Second, it provides the business-savvy employees that companies desperately need to ensure success in a technologically fast paced and fluid business environment. Third, it boosts the capacity for a country’s economic success by increasing the numbers of individuals able to take advantage of the global innovation economy.
In recognition of this, entrepreneurship is on the agenda for many of the old-world countries where a dependency culture has grown and economic output has been dwindling. In fact, European Heads of State agreed right from the start of the 21st century that action needed to be taken to redress negative attitudes towards entrepreneurship.
Successive governments and (to a broad extent) business have recognised that the UK provides a strong environment in which enterprise can thrive. But business start-up rates have stubbornly refused to reflect that environment, with the British public believing that starting a business is both more difficult and more risky than in fact it is. The job for life is clearly on the endangered species list and there is a worrying lack of understanding in the recruitment pool, of the fundamentals of running a business. A society in which people are inspired and empowered to turn their own ideas into business reality is desperately called for; entrepreneurship needs to become viewed by the public as a realistic alternative to employment.
Our fragile economy and jobs market is clearly not going to rise spectacularly and phoenix like any time soon. Our existing businesses are already questioning just how far private sector job creation will go towards filling the employment gap. This should encourage us to redouble our efforts to promote entrepreneurship. It should also encourage us to consider carefully what the key enterprise trends are and how they should influence the way we promote and support entrepreneurship at home and abroad. Get this wrong and we could seriously damage our recovery and longer term economic success. Geof Cox’s recent article underlines this point; if our policy makers are unable to move beyond conventional business growth models when developing strategies and interventions it will not be just social enterprises that lose out.
Take the case of freelancers (mentioned in passing in Cox’s article). In the US, freelance job postings and the number of freelancers responding to them rose hugely last year. Increasingly people there are turning to the ‘Gig economy’ as a way forward and there are indications that here also freelancing is taking off. This move to independent working is being seen by some in the US as the most significant shift in workforce patterns since industrialisation. Technology and networks have enabled this surge in freelancing but as with social enterprise most of it is unseen or unrecognised in policy making. Like many freelancers themselves, policy makers tend not to consider them as businesses in their own right or having requirements beyond those of any other business. David Cameron has stated that “this Government is getting right behind” the UK’s estimated 1.4 million freelancers but to do that there must be recognition of their particular needs and traditional interventions to encourage business growth may not be high on their list of priorities.
Whether you look at social enterprises, freelance workers or home-based enterprises, the trend towards them is upwards and the unique requirements of each are being highlighted by proponents and seemingly overlooked by those responsible for the business environment in this country. GEW has huge potential to help address this. Not only should it inspire more people to start their own business and become more entrepreneurial, it must also highlight enterprise trends and seek to address the barriers likely to impact on the success of those who operate within those trends.
Our overseas policies and interventions are equally important. Few would argue against the necessity of full participation in the global economy being critical to our future economic success. Increasingly our entrepreneurs will be looking beyond our traditional global partners for trade and collaborative opportunities. Economic and social stability in those countries should be as important to us, as it is to the inhabitants. In fact, many of the participant nations in GEW prioritise the social stability and the micro-economic aspects of entrepreneurship. But is this another important area in which our policy makers appear to be short-sighted?
Economically stagnant nations do not make strong business partners; they tend to instability and extremism. There is a case for foreign policy interventions in developing countries to support and prioritise private sector growth, post military intervention or natural disaster. It is argued that this would be a more effective way of fostering economic and social stability than simply focussing on large-scale infrastructure and major state-run projects. There is increasing discussion in the US around ‘expeditionary economics’ (a phrase coined by Carl Schramm of the Kauffman Foundation) and its scope for changing the fortunes of such nations. That discussion should take place here also, as those nations will ultimately be our future customers and business partners.
RSA Fellows are no strangers to the cause of promoting and supporting enterprise and are uniquely placed to ask the big questions during GEW. By doing so, we can help to ensure that the UK has the right enterprise strategy at home and abroad to realise this decade as the most entrepreneurial ever.
Global Entrepreneurship Week runs from 14 – 20 November. Mike Paice FRSA is a freelance writer and researcher. A former civil servant, he was left with an enduring interest in enterprise promotion after overseeing the development of GEW.