Three Big Ideas is our weekly roundup of ideas (and our takes on them) in entrepreneurship, innovation, science and technology, handpicked by the team.
In this week, Philip Salter urges the public sector to think big on embracing digital technology, Anastasia Bektimirova wonders about how we label innovators, and Eamonn Ives puts forward ideas for spurring agglomeration in London.
Matt Clifford’s long-awaited report finally landed this week. The AI Opportunities Action Plan packs a punch, delivering 50 recommendations to the Government.
For a deep dive, our Head of Science and Technology Anastasia Bektimirova offers a thorough analysis of the Plan on our Substack. As she said to Sifted (paywall): “The plan has a lot of very constructive recommendations... but this is something that was supposed to arrive much sooner, and at the moment it feels like we’re playing catch-up.”
The proof of any plan is in the execution. But as Anastasia said for another Sifted article (paywall): “It’s a very good sign that Matt Clifford will be overseeing the delivery of this plan.” It’s clear that the necessary infrastructure development, sustained funding commitments, talent attraction, and changes to procurement will all require tough political decisions to be made. As she writes in our Substack analysis, “the responsibility is also on the AI sector itself to demonstrate how it can deliver on the Government’s aims. The success of the Action Plan depends on sustained political support. Ministers want something to feel positive about and to champion, so articulating the opportunity is important – and this will be our task.”
As our Adviser Richard Mabey, founder of the AI-powered contract automation platform Juro, responds: “The key now is not the recommendations in the report, it’s in the delivery. To stand a chance of getting ahead, the Government must implement the recommendations at breakneck speed. Can Government move at the pace of AI? Let’s see.”
Janan Ganesh isn’t convinced we can. Ever the provocateur, he writes in the Financial Times (paywall) that Britain should stop pretending it wants more economic growth: “Tories want growth, but not if it means building things, aligning with Europe, or much exposure to China. Labour wants growth, but not if it incommodes the unions, or ‘leaves people behind’ or some such NGO press release inanity. What growth policy is left over, then?”
I’m more optimistic (and I suspect Ganesh might be too). Just this week, politicians across the political spectrum endorsed a National Priority Infrastructure Bill from the Looking For Growth group. These included Chris Curtis, co-chair of the Labour Growth Group, which has around 100 Labour MPs as members. Looking For Growth is run by friend of the Network Dr Lawrence Newport (and author of an essay for us on Inspiring Innovation) – it’s a social movement dedicated to making Britain grow. He is one of many people working on policy to increase the size and dynamism of our economy.
A decade ago, being unashamedly pro-growth and pro-progress could be a lonely place to be. This is no longer the case. Time to get involved.
Join us for an evening of networking with like-minded, pro-growth entrepreneurs in Soho this Wednesday. Spaces are limited, so sign up now.
On Your Mind
We want to hear from founders! What barriers are holding your startups back? Here’s a message from Eamonn Ives, our Research Director setting out what he’s looking for:
“At The Entrepreneurs Network, we’re here to solve problems. But in order to do that, we first need to know what those problems are. And there’s nobody better placed to tell us than the founders who have to deal with them each and every day. Our pipeline of research for the year ahead is taking shape but we’re still eager to know what issues you think we should be focusing on to ensure Britain’s startups have the best shot at success. Maybe it’s a regulation that stymies your sector, or something that cuts across the breadth of the economy – whatever it is, drop me an email and let’s chat further.”
Three Big Ideas is our weekly roundup of ideas (and our takes on them) in entrepreneurship, innovation, science and technology, handpicked by the team.
In this week, Eamonn Ives asks whether Elon Musk is a genius, Philip Salter writes about the disruption AI could spell for the labour force, and Anastasia Bektimirova discusses the myth of objectives.
Peter Drucker once said that the only thing we know about the future is that it will be different. Far be it from me to correct the founder of modern management theory, but at least in the short term, we aren’t entirely clueless.
Although precise predictions are impossible, our experience can guide us toward likely outcomes, something that both entrepreneurs and policymakers need. While we don’t know what a second-term President Trump will look like, we have more knowledge than we did when he was elected for his first term. We know, for example, to take his words seriously despite claims back in 2016 that we should take them symbolically. That’s not to say he will – or can – do everything he wants. And we also know that he’s quick to change his mind. This underscores how uncertain the global policy landscape will be under Trump’s leadership – and why entrepreneurs and policymakers alike must stay agile.
As our Research Director Eamonn Ives argued last year following the election, the lesson for many European countries, including the UK, is that we’ve grown too accustomed to relying on external actors. Whether that’s the US for technological innovation and security, or Russia and China for cheap energy and goods – without adequately considering the vulnerabilities this creates. Rather than retreating into economic insularity, Eamonn makes the case for smarter policies that prioritise resilience and recognise the true foundations of growth. Whether that’s in policy areas where we can work more closely with our allies, or in areas where we need to build our own capabilities – like producing our own cheap, clean energy.
On this side of the pond, we now know a lot more about our new Labour Government. It’s fair to say that not everything has gone the way that Britain’s entrepreneurs would have wanted, but we – and Labour – should remember that there’s still four and a half years left before the next election needs to be held, which is ample time to turn things around.
That won’t happen on its own, however, and as the warning lights of the economy flash a darker shade of red, Starmer should be minded to look back to the record of the last man to break the Tories’ stranglehold on power. In his first term alone, Tony Blair managed to enact a host of reforms that materially changed the political fabric of Britain. Many of these he gripped early on in his premiership, meaning that the benefits had time to accrue by the time voters next went to the polls. Short-term news cycles have certainly changed how politics works, but they haven’t rendered long-term governance a thing of the past just yet – Labour can’t forget that they have the power to act. On this, Anastasia Bektimirova shares Blair’s insights on X, taken from his recent book On Leadership.
So what else should entrepreneurs be thinking about this year?
The elephant (not playing chess) in the room is artificial intelligence. The only challenge is predicting the timeline. However, this isn’t entirely a black box; there are people with proven insights. Rodney Brooks, for example, has been making predictions since 2018. While he hasn’t always been spot on forecasting the timeline for AI, robotics, self-driving cars and human space travel, his deep knowledge combined with his self-awareness makes his 2025 update a must-read.
He’s not the only one worth reading to get a better understanding of how AI will evolve in 2025. Read Herbie Bradley to understand what Trump could mean for AI. Read Simon Willison for a comprehensive update on LLMs and AI, with a few hints at likely directions for the future. And read Austin Vernon for a view on how AI agents may be integrated into companies (this one is a short, essential read for all entrepreneurs).
There’s room for disagreement. That is why AI sceptic Gary Marcus has made a bet with Miles Brundage, formerly of OpenAI, on whether AI will be able to pass ten tests – including writing Pulitzer-caliber books, coming up with Nobel-caliber scientific discoveries, writing cogent, persuasive legal briefs – by 2027.
In reality, the truth likely lies somewhere between these extremes. The Pulitzer test may miss a more immediate shift. AI is already reshaping how influential thinkers approach their work. Economist Tyler Cowen says he is now writing primarily for AI as a target audience. So is researcher Gwern Branwen. (For my part, I’m still writing for humans.) What we can be sure of is that reality will be transformational for everyone reading this.
It’s time
If you’re one of the thousands of people reading this, wondering how you can get more involved in 2025, here are three ways.
First, if you haven’t already, join us as a Supporter, Adviser, Patron or Corporate Partner. We wouldn’t be able to do all the work we do without this. You can join online in a couple of minutes. Along with the warm glow of supporting us, you’ll also receive invitations to many more events.
Second, we’re collecting testimonials and case studies from our supporters and collaborators. If you’d like to contribute, please drop me an email. Your input will help us showcase our impact to new audiences.
Third, we have a survey that helps us tailor opportunities to your interests. It only takes a few minutes to complete and really helps us focus our efforts.
We’re looking forward to seeing you in 2025!
Three Big Ideas is our weekly roundup of ideas (and our takes on them) in entrepreneurship, innovation, science and technology, handpicked by the team.
In this week, Eamonn Ives highlights an innovation arms race going on in the food industry, Anastasia Bektimirova discusses revolving doors in the world of AI, and Philip Salter espouses the potential of pilots.
In 2024, The Entrepreneurs Network turned ten. Given that only around a third of businesses survive beyond a decade, perhaps we’re doing something right. Ultimately though, there is only one metric that matters: are we making the UK a better place than it would otherwise be for entrepreneurs? I’ll leave it to others to make that ultimate judgement, but as you’ll see below it’s not lack of effort – and our plans for the next year are even more ambitious. We hope you’ll remain part of our journey.
Unless something extraordinary happens in the next few days, the UK’s biggest political event of the year was July’s General Election. While we don’t take sides on politics – we do take a keen interest in policy. And there has been plenty of policy to get stuck into.
Most vocally, we got over 1,250 entrepreneurs to sign a letter against the negative impact that rumoured changes to Capital Gains Tax and Business Asset Disposal Relief would have. The Chancellor took note, but there is more work to do. As Richard Tyler wrote in The Times: Gordon Brown’s tax break for entrepreneurs survives — but for how long?
Back to Basics
Every year we release at least one wide-ranging report that aims to influence – or at least capture – the zeitgeist. In March, we released Building Blocks, which argued that the fundamentals of what makes for a competitive economy have been neglected for too long. We focused on four areas to fix: our chronic under-agglomeration, looming fiscal headaches, obstacles to innovation and a failure to fully harness domestic and international talent. There is still much to do on all four fronts, but the narrative that we and others have called for – fixing the foundations – has cut through.
Another wide-ranging report was June’s Backing Breakthrough Businesses, which was driven by our new Patron Steve Rigby through his leadership of the Private Business Commission. We launched it in Parliament with Jonathan Reynolds MP, Secretary of State for Business and Trade, and it picked up coverage in The Times and elsewhere, with many of the policy recommendations in train.
In September, our Research Director Eamonn Ives got to the core of small nuclear reactors in Small Wonders. As the report argues, abundant energy is crucial for economic growth, particularly with the rise of energy-intensive technologies like AI, and achieving climate goals requires significantly expanding clean generation.
Big Society
While entrepreneurship isn’t for everyone, we should aspire to live in a country where nobody faces social impediments when starting and growing a business.
We want to take everyone on this journey with us. Whether that’s the neurodivergent in March’s Neurodiverse Founders, the next generation in June’s Empowering the Future, the regions in September’s United Growth, or anyone no matter where they’re born in February’s Entrepreneurs Unwrapped.
As many of you will have seen, this week we launched Gaining Altitude in the House of Lords – the latest report from our Female Founders Forum. For this one we partnered with the Invest in Women Taskforce to better understand Britain’s female angel investor community around the UK. Yesterday, Hannah Bernard OBE set out in City A.M. what needs to be done.
Global Britain
We’ve long argued that if we are to remain competitive we must remain open to talent. In August’s Job Creators 2024, we reveal the proportion of founders behind Britain’s fastest-growing companies that were born overseas: 39%.
British companies also need to expand internationally. In December’s Towards A More Special Relationship we examined what challenges exist for British founders looking to do that in the US, and set out a clear raft of policy recommendations for the Government to address them.
Science Superpower
I’m delighted to announce that Anastasia Bektimirova has been promoted to become our Head of Science and Technology to build out our work portfolio in this area. Her main interests include AI policy, strategy and delivery of the National Data Library, research commercialisation, alongside broader topics related to the health of the UK’s R&D ecosystem. She is also thinking about how institutions can improve their delivery of national science and technology objectives. If you share these interests, reach out.
As such, we will be engaging with the Government as it is consulting on copyright and AI. We believe in a policy environment which enables responsible access to high-quality input needed to develop AI models in the UK, and have already set out some potential options in January’s Can the UK Become Competitive on Text-and-Data Mining for AI? We are keen to hear your thoughts on how the Government can strike the right balance. Feel free to drop Anastasia a line.
White Heat of Technology
This year we joined Substack. Check out our interviews with: Station F Director, Roxanne Varza; former DSIT Policy Adviser Ben Johnson; and ARC Accelerator Co-Founder Chris Fellingham. We also revived our Three Big Ideas series – where we and experts in our community pitch our weekly hot takes on things that have piqued our curiosity – and written up more digestible analysis about the research we publish.
Ten More Years
Last but certainly not least, I want to thank our Patrons, Advisers, Supporters, Corporate Partners, and event hosts. This includes everyone here, as well as American Express, Arbuthnot Latham, Barclays, Barclays Eagle Labs, Beauhurst, Blick Rothenberg, Bradshaw Advisory, Britain Remade, Enterprise Nation, Evelyn Partners, FieldHouse, Fora, Fragomen, Gatsby, Growth Hub Global, Jobbatical, Kingsley Napley, LSE IDEAS, MDRx, Milltown Partners, OakNorth, Octopus, Rathbones, Rigby Group, Sumer, UCL, University of Bristol, YBI, and almost certainly one or two I’m forgetting.
We can only do what we do with support from our partners. If you would like to help us deliver on our mission, support us here or book a time to chat over Zoom. We look forward to working with you.
Three Big Ideas is our weekly roundup of ideas (and our takes on them) in entrepreneurship, innovation, science and technology, handpicked by the team.
In this week, Philip Salter reflects on mirrored life, Anastasia Bektimirova discusses launching startups inside of government, and Eamonn Ives argues the case for paying CEOs like footballers.
For a government that came into office with the laudable if stretching ambition of making Britain the fastest growing economy in the G7, today’s growth figures do not make for pretty reading. I say growth figures, but they’d perhaps more accurately be described as contraction figures – with the economy as a whole shrinking by 0.1% in the month of October, mirroring September’s languid performance.
Of course, far from all of the blame lies with the new Government. They inherited a sluggish economy plagued by decades of cumulative underinvestment in the fundamental building blocks of prosperity. Turning the ship around will take time, and credit should be given to the commitment to shake up areas like planning policy, which we know have an outsized influence on growth.
But nor are the occupants of Numbers 10 and 11 Downing Street entirely without fault. Just this week, a number of stories splashed the concerns bosses continue to have following the most recent Budget. OakNorth founder Rishi Khosla warned that tax changes are already causing wealth creators to leave the country, while at a roundtable between the Chancellor and senior business leaders, reports say almost all were pessimistic about the year to come. If Labour are to hit their growth goal, something needs to give.
Never ones to sit on the sidelines in this debate, on Monday we launched our latest report. In Towards A More Special Relationship, supported by our Patron Steve Rigby, we examine how to strengthen the entrepreneurial ties between Britain and its old ally America (the economy of which, if you needed reminding, is up a healthy 2.8% on the year prior). The report saw us talk directly to entrepreneurs who’ve made the hop across the Atlantic, investors who’ve ploughed money into startups stateside, and other key players involved in the growth journeys of similar companies. As well as mapping out the benefits the US market presents, we were also interested in understanding the barriers that prevent those benefits from being seized – and how to subsequently dismantle them.
One of the common themes we heard from those we interviewed was that for all the preconceptions of America being the land of the free, finding a foothold in the US market can be a bureaucratic nightmare. Whether it’s getting insurance or navigating immigration frameworks, founders told us that the administrative aspect of expansion can be a more costly experience than you might imagine – both financially and time-wise. Efforts to simplify this could prove especially helpful for the growth of companies who spot an opportunity.
In terms of our recommendations to foster greater Anglo-American economic integration, we set our sights high. At the top of our list is an appeal for the Government to prioritise a free trade agreement (FTA) with the new US administration once President-elect Trump is sworn in next January. Though certainly ambitious, it would not be unthinkable – when he was last in the White House, Trump appeared keen to strike a deal, and five rounds of negotiations were undertaken in his final year in office. Rachel Reeves, meanwhile, has made a number of positive noises about one in recent weeks and months.
Rarely does a lever for growth quite like an FTA with the world’s biggest economy present itself, but if the Government can yank it, their objectives will be made all the easier. Here’s to hoping they manage to.
Action Stations
On Tuesday, my colleague Anastasia published her fascinating interview with Station F director Roxanne Varza. Among other things, the two discuss how Station F has become a focal point for the French startup scene, what trends European artificial intelligence legislation is setting in motion, and whether there are any policy lessons Britain can learn from across the Channel to boost its own entrepreneurial ecosystem. Highly recommended – all this and more can be found on our Substack.
Three Big Ideas is our weekly roundup of ideas (and our takes on them) in entrepreneurship, innovation, science and technology, handpicked by the team.
In this week, Philip Salter explores the gruesome if useful history of medical self-experimentation, Anastasia Bektimirova argues the case for enabling widespread adoption of AI, and Eamonn Ives discusses what lessons the cruise liner industry can teach us on dry land.
Three Big Ideas is our weekly roundup of ideas (and our takes on them) in entrepreneurship, innovation, science and technology, handpicked by the team.
In this week, Eamonn Ives discusses likening poor scientific research to dangerous lab equipment, Philip Salter writes about when governments act swiftly, and in a guest post, Patrick King of Reform think tank explains how the Civil Service Fast Stream can up its game.
Yesterday, I went on Sky News to share my reaction to the headline news that net migration topped 906,000 last year.
I was asked, in part, because of the research we’ve undertaken on an important cohort of immigrants: the foreign-born founders of Britain’s fastest growing companies. This year we partnered with Fragomen to reveal that 39% of the fastest growing companies in the UK are started by an immigrant. This annual report serves as a reminder that immigrants are massively overrepresented when it comes to building Britain’s most impressive companies. We should celebrate this. Their openness to risk is Britain’s reward – evidenced by the jobs they create and the billions they pay in taxes.
But let’s step back from the apex. When it comes to broader business immigration, the Conservatives, after being relatively open post-Brexit, restricted immigration just before losing the election. This wasn’t just bad politics (at that point nobody cared and Labour now don’t need to do anything to see immigration decline), it will be bad for the economy. Oxford Migration Observatory estimates these changes will cost Britain £25 billion over ten years.
These restrictions are why immigration dropped by 20% in the 12 months to June, and why it now stands at 728,000. The last government also bumped up fees, with the health surcharge, for example, increasing from £624 to £1,035 per year in February. For a skilled worker to come to the UK for five years with their spouse and a dependent, the charges are now in the tens of thousands. Our fees are seven times those of Australia, twelve times Canada, and eighty-six times Germany. Yes, you read that right – eighty-six times!
Despite this, clearly public attitudes towards immigration have become more negative. However, if you dig a little deeper, the public is deeply conflicted. As Jonathan Thomas, Senior Fellow of the SMF, argues in a recent briefing paper: “A majority of the public may indicate a preference for lower numbers of immigrant workers into the UK overall, but often then struggle to name any particular sectors or roles where they would like to see this reduction happen in practice. In more recent times, despite increasing disquiet over overall immigration numbers in the UK, the sectors with by far the largest inflows and impact on those numbers – health and care – are exactly those where the public seem most relaxed and supportive of workers coming from overseas.”
Thomas recommends that the money raised through the Immigration Skills Charge is hypothecated to directly address skills gaps in the UK workforce, with billboards across the UK proclaiming the opportunities to access what would be a sizeable training pot. It sounds like the right approach to me.
I’m not here to make the case for every immigrant, but we all know businesses are crying out for talent. If we had the skills, mindset and work ethic in the domestic population Britain's businesses wouldn’t hesitate to snap them up. To be frank, the fact that the domestic workforce isn’t up to scratch is an ongoing government failure. After all, the government has a near-monopoly or is the main funder of the formal education most of us receive. While we have many ideas on how to address this, entrepreneurs growing businesses need talent immediately.
To be clear, I don’t doubt that there are parts of the system that could and should be tightened up. I back calls for more data on costs and benefits of the various routes. Nor do I doubt that there are complex challenges beyond the scope of business migration that need addressing. But we can’t lose sight of the fact that many of Britain’s best businesses are started by people born outside the UK; and all Britain’s most ambitious business owners – wherever they were born – need talent to compete internationally.
Task Masterminds
As many will already know, the Invest in Women Taskforce has exceeded its initial target of £250 million in capital raise for female founders. Barclays, M&G, the British Business Bank, Morgan Stanley, Visa Foundation, BGF and Aviva have committed capital to the ‘Invest in Women Taskforce’ investment pool.
A big congratulations to Hannah Bernard OBE, Head of Business Banking at Barclays and Serial entrepreneur Debbie Wosskow OBE for leading the charge. Now they’re looking for someone to manage the fund. So if you are a fund manager who can meet the objectives, visit the Taskforce’s website to find out more.
As a member of the Taskforce, I’m in awe of how quickly this has all happened – not least, given the political disruption of an election. If you scroll down you’ll see that we’re launching a report in the House of Lords with the Taskforce.
Butler’s Service
We have a new Adviser! Sarah-Jane Butler is an award-winning lawyer and serial entrepreneur. Along with fellow directors, she launched Farringford Legal in response to spotting a gap in the market for a new breed of law firm.
In her own words: “One of my personal ambitions is to make a meaningful impact on the entrepreneurial community by lending my voice and actions to campaigns that help SME businesses thrive in the UK.
“I admire how The Entrepreneurs Network has created an effective bridge between the business community and central Government. It ensures entrepreneurs have a platform to be heard and influence policy that fosters sustainable growth—a mission I strongly support.
“As a champion for female founders, I am particularly passionate about working with the Female Founders Forum. Their efforts to close the funding gap by encouraging investors to back female entrepreneurs align closely with my advocacy goals.”
Find out more about Sarah-Jane here, and learn more about becoming an Adviser here.
Waiting All Week
Small Business Saturday is back on 7 December. As I’m sure you know after years of amazing publicity, it’s an annual campaign to celebrate the nation’s fantastic 5.5 million small businesses.
The campaign is open to all small businesses across the UK, and it is completely free. Many team up to host events, offer promotions or simply use it as an opportunity to engage their customers.
A marketing pack is available from the Small Business Saturday website to help you get involved, and you can also register to be featured on the campaign’s Small Business Finder map.
Three Big Ideas is our weekly roundup of ideas (and our takes on them) in entrepreneurship, innovation, science and technology, handpicked by the team.
In this week, Anastasia Bektimirova ponders the possibility of an AI-powered social science revolution, Philip Salter contemplates competition policy, and in a guest post, Jeremy Driver, of Britain Remade, explains why Britain needs to extend the lifespan of its nuclear power plants.
All budgets have winners and losers. The most vocal on the wrong end of the latest one are those hit by the inheritance tax changes, and the CEOs of Britain’s biggest businesses who plan to cut jobs and investment due to hikes to National Insurance. For the latter, these National Insurance hikes add insult to injury – the injury being the Employment Rights Bill, which was introduced prior to the Budget.
The Bill isn’t set in stone – the Government is currently consulting on it – and given the huge blowback around the National Insurance rise, I expect those in power will be particularly alert to any critiques. After all, according to the Government’s own analysis, the planned reforms will cost businesses billions a year.
In our conversations with entrepreneurs, the biggest concern around the Bill seems to be the right to claim unfair dismissal against employers from day one. Currently, there is a two-year qualifying period. While there will be a less onerous process for earlier terminations due to capability, conduct, illegality or so forth, many business owners are worried.
As Daniel Pollard, employment partner at Charles Russell Speechlys, says: “The risk of hiring the wrong person may make employers more cautious which is not good for anybody. If the rules are too restrictive during the probationary period this will also act as a brake on recruitment and stop employers taking a punt on a candidate who might be an outlier.”
For entrepreneurs in the sharing economy, we’ve heard concerns about the restrictions around zero-hour contracts. While the Bill doesn’t ban them, it sets out complex rules requiring guaranteed hours. Neil Carberry, Chief Executive of the Recruitment and Employment Confederation says: “Far too much is made of zero-hour contracts as being imposed on workers when there is more than enough evidence that people want to work in different ways.” This reflects the findings of our report for the All-Party Parliamentary Group for Entrepreneurship on the Sharing Economy.
There’s much more besides – some of which is hard to get too worked up about, such as stopping ‘firing and rehiring’. But as it currently stands, there’s an awful lot in there that will render British businesses less agile. This article on 11 things you need to know about the Employment Rights Bill is a good place to start if you don’t know what might be coming down the line.
I write “might” because my sense is that the Government is open to striking a better balance. If you’re keen to have your say, but don’t want to or can’t respond directly, sign up here. We’ll be going out directly to our Members to feed into our submission.
Big Deal
This week was the tenth instalment of our Three Big Ideas series on our Substack. If you’ll forgive the self-promotion, I think it’s a cracker. We invited Jack Wiseman from Inference Magazine to make the case for Special Compute Zones that are rumoured to appear in Matt Clifford’s AI Opportunities Action Plan. I wrote about how the Annual Investment Allowance has distorted investment away from business spending on big data and AI. While our Research Director Eamonn Ives gives some sound advice to whoever becomes the Chair of the newly established Regulatory Innovation Office (applications close this Sunday).
Lilac Review
I’m on the board of the Lilac Review – an independent government-backed review dedicated to understanding the challenges and successes experienced by disabled entrepreneurs.
On a range of questions, we’re looking for the views of entrepreneurs with a disability. Your insights will contribute to a comprehensive report from the Lilac Review, set for release in May 2025. As a thank you, everyone who completes the survey will be entered into a draw to win one of two £250 prizes.
You can take the survey here. The Lilac Review is committed to making this survey accessible to all. If you’d prefer to complete the survey in a different format, please reach out at: hello@lilacreview.com.
The Lilac Review was spearheaded by Michelle Ovens CBE, whose tenacity on this topic is only beaten by her ambitions to move the agenda forward. If you want to support this policy area and don’t know Mich, drop me an email and I’ll make an introduction.
Founder Resilience
Building on last week’s newsletter, I wrote for Forbes about the importance of founder resilience. If this is something that matters to you, let me know and I’ll make an introduction to Christina Richardson, our Adviser and author of the report.
Three Big Ideas is our weekly roundup of ideas (and our takes on them) in entrepreneurship, innovation, science and technology, handpicked by the team.
In this week, Philip Salter writes about capital incentives slowing the diffusion of next-generation technologies, Eamonn Ives discusses ‘invisible graveyards’, and in a guest post, Jack Wiseman, of Inference Magazine, crunches the numbers on what Britain’s future electricity system should look like.
We all know that entrepreneurs are the engine of economic growth. But they’re only human. Over the past decade at The Entrepreneurs Network, I’ve seen firsthand how the incredible role entrepreneurs play in society can come at a cost. Running a business puts unique – and sometimes profound – pressures on people.
That’s why I penned the foreword to Christina Richardson’s robust new report on the topic of founder resilience. Christina is an Adviser to the network, the Founder of Foundology and an Associate Professor in Entrepreneurship at UCL School of Management.
Founder Resilience Research 2024 draws on insights from hundreds of entrepreneurs, providing a comprehensive view of the obstacles founders face. As I write in my foreword:
“That 93% of founders report signs of mental health strain, with stress and anxiety levels five times higher than the UK national average, should be a wake-up call for us all. Despite 92% of founders expressing passion for their work, only a small fraction feel adequately supported. Just 43% feel they have a strong support system, especially as their ventures grow, and 76% report feelings of loneliness – a figure 50% higher than CEOs more generally. The personal cost of entrepreneurship is undeniable.”
But it’s not all doom and gloom. The report also outlines some of the solutions and sets out what founders with high resilience do.
Whatever lens you see it through – resilience, mental health, coping skills, self-care, mindfulness, wellness – clearly this stuff matters on a personal level to many of you reading this. But it also matters to our ecosystem as a whole. I wholeheartedly recommend the report for anyone who cares about this – feed your mind.
Mega Fun
In her first Mansion House speech, Rachel Reeves announced the creation of Canadian- and Australian style- “megafunds” through the consolidation of the defined contribution market and Local Government Pension Schemes.
It was nice to have some positive news for a change, so we helped pen and signed a letter with the Startup Coalition, the BioIndustry Association, techUK, UK Business Angels Association, Founders Forum Group, Tech Nation and UK Day One which broadly welcomed the announcement.
It would be remiss if I didn’t share the paragraph from the press release that raises some slight concerns: “Local economies will be boosted by the changes as each Administering Authority will be required to specify a target for the pool’s investment in their local economy, working in partnership with Local and Mayoral Combined Authorities to identify the best opportunities to support local growth. If each Administering Authority were to set a 5% target, that would secure £20 billion of investment in local communities.”
However, there is clearly wiggle room, and subsequent statements by Pensions Minister Emma Reynolds suggests the government isn’t looking to politicise investment: “She said the government will not tell pension fund managers they must invest more in private equity but due to the larger scale they will be able to invest in a ‘broader range of assets, and that’s what we see in Canada and Australia.’”
But just in case, I would direct them to the case of the University of Rochester. In the early 1970s, it had the third largest endowment in the US, after Harvard and the University of Texas. However, the administrators decided to invest locally in companies such as Kodak and Xerox, which suffered in the 1970s and 1980s. As a result, the university had to dramatically downsize in the mid-1990s. The insights from my 2020 post on sovereign wealth funds are as true now as they have always been.
In The Stars
We also welcome the Chancellor’s backing of PISCES, which has been a massively underreported innovation. It will offer new avenues for private companies and investors to trade shares. As Nick Graves, Partner at Burges Salmon, wrote: “Participating on PISCES will support companies to scale up and grow, providing liquidity, helping shareholders, including employee shareholders, to realise their gains, and providing an opportunity to companies to rationalise their shareholder base. Investors will gain better access to exciting companies while also benefiting from greater transparency and efficiency than available in private markets.”
Invest In Women
Last week the official members of the Invest in Women Taskforce (IWT) were announced. IWT is an industry-led, government-backed initiative with a mission to create the largest funding pot in the world for female investors, with a mandate to back female-powered businesses. The Taskforce has official support from Rachel Reeves and has welcomed Minister Gareth Thomas at the Department for Business and Trade.
I’m delighted to be on the Ecosystem Working Group, alongside Hannah Bernard and Juliet Gouldman from Barclays, Irene Graham from the Scale-Up Institute, Alex Daly from Arosa Capital / CIFE, and some other incredible champions of female entrepreneurship.
Before the end of the year, we’ll be releasing a report in the House of Lords with the IWT. We’ll provide more details next week, but join us for the chance of getting an earlier email invitation (until we start launching reports in football stadiums, demand will outstrip supply for these sorts of events).
Three Big Ideas is our weekly roundup of ideas (and our takes on them) in entrepreneurship, innovation, science and technology, handpicked by the team.
In this week, Eamonn Ives cautions against tariffs, Philip Salter digs into a new paper on the impact of AI, and Anastasia Bektimirova wonders how we can get better at commercialising research from the social sciences.
Back in January, I wrote about how 2024 would be the year of democracy – with around half of the world’s adult population able to head to a ballot box. The US Presidential race was always going to be the most consequential election, and unless you’ve been living under a rock for the last few days, you’ll know by now that it was Donald J. Trump who emerged victorious.
The Republican firebrand will take charge of the biggest economy on the face of the Earth and the cradle of much of the world’s innovation. Whether you love him or loathe him, how Trump governs will matter acutely for businesses both inside and outside of America’s borders.
Signature policies like his promise to apply a blanket 10% import tariff on goods – and more for products coming from countries like China and Mexico – would hit firms that sell to the US hard. Fears that this may trigger a retaliatory global trade war are already rippling through growth forecasts and share prices of trade exposed businesses. If things get really bad, be braced for inflation taking off again, and interest rates increasing to try to tame it.
As America is Britain’s single largest trading partner, we must be particularly prepared. More than 40,000 British businesses shipped wares to the States in 2023, worth over £60 billion in value and equivalent to a third of all goods exports that left our shores. Some of these firms might be able to shoulder a drop off in sales, but others will surely need to pivot or perish.
One potential note of optimism on this front, however, is whether Trump’s return to the White House will revive the possibility of a UK-US trade deal being signed. In the final year of his first presidency, initial progress was made towards one – but talks collapsed after Joe Biden came to power, in part due to disagreements with the then Conservative Government’s approach to the Northern Ireland Protocol. Just this summer, the Chancellor Rachel Reeves hinted that she would be open to resuming negotiations. She emphatically should – and in the coming weeks we will be publishing a range of ideas for how the ‘Special Relationship’ can be made that bit more special for businesses on both sides of the Atlantic.
It would be dangerous, however, to think that our future economic success should be tied solely to the benevolence of our American counterparts. There is so much else that only we can, and must, do to fix the foundations of our own economy – from bringing down the costs of building new infrastructure, to improving our immigration system to attract more of the world’s brightest minds to help start and scale companies here in the UK rather than elsewhere. Our report Building Blocks offers a starter for ten for how to do that.
In Pieter Garicano’s excellent piece on ‘luxury rules’ he argues that many European countries have historically allowed themselves to make certain choices in recent decades on the assumption that other economies will always be there to bail them out – whether it’s the US supplying innovation like breakthrough technologies and security in the form of military guarantees, or countries such as Russia and China supplying commodities like cheap energy and manufactured goods. In today’s increasingly fragile world, marked by rising tensions or even outright war, the costs of these choices are coming home to roost. This isn’t to say the answer is to become economically insular – far from it – but rather that we need to be more discerning about the policies we adopt, and less complacent about the roots of economic growth.
A sober assessment of what sovereign capabilities we need and the steps required to build them is necessary now more than ever, as is thought about where collaboration with others can best support our national goals. (On this last point, I found James O’Malley’s latest blog particularly persuasive.)
If this sounds gloomy, that’s not my intention. Rather, it asserts that it’s on ourselves – nobody else – to turn things around. In a sense, that should give us hope. It doesn’t matter who occupies the White House or whatever else may be going on in other corners of the world. There are still plenty of problems to solve at home – problems which, if solved, would swiftly make our own economy a more dynamic, secure and prosperous place. But it’s on us to start making those choices.
Out of the Shadows
On Saturday, Kemi Badenoch became the new Leader of the Conservative Party, and with that of His Majesty’s Most Loyal Opposition too. Over the course of this week, she has been appointing a fresh Shadow Cabinet. Of particular note for Britain’s entrepreneurs will be Mel Stride, who was named as Shadow Chancellor, while Andrew Griffith takes up the mantle of Shadow Business and Trade Secretary. As a former Chair of the APPG for Entrepreneurship, of which we’re the Secretariat, we were delighted to see Alan Mak appointed as the Shadow Science, Innovation and Technology Secretary. You can find the full list of portfolios here; we look forward to constructively engaging with them all in months and years ahead.
Three Big Ideas is our weekly roundup of ideas (and our takes on them) in entrepreneurship, innovation, science and technology, handpicked by the team.
In this week, Eamonn Ives urges a rethink to recent changes to Stamp Duty, Philip Salter discusses the importance of getting competition policy right, and Anastasia Bektimirova writes about the risk of losing sight of the scientists who drive progress.
After weeks of speculation, on Wednesday the Budget was finally delivered. You’ll have to come to one of our events for my lukewarm takes on its impact on farms, private schools, social care, or whatever comes next – but given weeks of campaigning, it would be remiss if I didn’t round it off with our thoughts on Capital Gains Tax (CGT) and Business Asset Disposal Relief (BADR).
It was a busy few weeks for us. Topping out at over 1,000 responses, the letter that many of you signed and shared made headlines across the media, while behind the scenes we were connecting concerned founders with journalists hungry for to hear from those at the coalface.
Having spoken with lots of entrepreneurs following post-Budget, the general sentiment seems to be: could have been worse, should have been better. Whether you think it was necessary or not, given that the burden of taxation has increased for pretty much everyone across Britain, a collective “phew!” is understandable. It wasn’t just entrepreneurs though. According to Patrick Maguire (Paywall – The Times), in the focus groups of Tory-Labour switchers Downing Street conducted on Wednesday night the word that recurred was ‘relief’.
As I wrote in reaction: “Entrepreneurs will be somewhat relieved that the Capital Gains Tax (CGT) rate wasn’t hiked as high as many feared. Similarly, there were rumours that Business Asset Disposal Relief (BADR) would be scrapped, so the worst-case scenario was avoided. Nevertheless, BADR will still be ratcheted up over the coming years, meaning Britain will become an increasingly unattractive place to both start and exit a company.
We know that many entrepreneurs are already looking to move their business from the UK – and this only makes that move more compelling. This is why 1,250 of the UK’s most ambitious entrepreneurs signed our letter against such changes.
It’s not just entrepreneurs who will be impacted. Many fledgling startups give employees stock options or shares as part of their compensation package as they cannot compete with the higher salaries offered by established big corporates. Today’s changes will reduce this incentive, making it even harder for startups to attract the talent they need to scale, while denying workers the chance to own a piece of Britain’s growing companies.
Instead of hiking BADR, the Treasury should have retargeted the relief at founders who are scaling businesses, and have made it unlimited to incentivise the world’s best entrepreneurs to start, scale and sell multiple businesses in Britain.”
Our letter – alongside others, of course – may have spooked the Government from going further on changes to BADR and CGT. I write ‘may’ because the scrapping of BADR and hikes to CGT were in part trailed in order to manage expectations. However, as has been the case for decades now, worst-case scenarios are also floated to test the public reaction. Politicians only know the limits if we’re vocal enough. This is clearly a suboptimal way to make policy – after all, there are plenty of vocal groups that the government shouldn’t listen to – but that only makes it more critical for us to play the game of politics when there is so much at stake.
In her speech, the Chancellor specifically said she was committed to creating a positive environment for entrepreneurship and wants to work with entrepreneurs to do this. This was a direct nod to all of you who’ve made so much noise over the last few weeks.
The hard work starts now. We need to build out the evidence base so we can make a proactive case to the Government, the opposition and civil servants on tax and growth. When it comes down to it, we all want the same thing: entrepreneurs making us all richer – both through the stuff they build and people they employ, but also through the taxes they pay as they scale and exit.
And while the Office for Budget Responsibility’s growth forecasts are depressing – remember, they don’t take into account important forthcoming policy changes such as planning reform and other areas we have been working on for over the last decade. As Rodolfo Rosini, entrepreneur and Adviser to The Entrepreneurs Network, argues: “Britain is a $2.3 trillion opportunity.”
If you want to help us make the world a better place, drop me an email now with details of how you want to lend a hand. We’re a small organisation, but as the last few weeks have shown, when we unite we can make ourselves heard when it really matters.
It’s not just CGT, of course. My colleagues Eamonn Ives and Anastasia Bektimirova responded on Employers’ National Insurance Contributions, Business Rates reform and R&D spending, and there will be plenty more to unpack over the coming weeks. If you want to join me for more Budget chat. I’ll be chairing an event at Home Grown on Tuesday morning (request a place here), or you can scroll down for a smaller roundtable we’re hosting with Evelyn Partners.
Paper Cut
Anastasia has teamed up with Alex Chalmers of Air Street Capital to write a cutting article on how to (not) do policy. Death by a thousand roundtables is a must-read taxonomy for anyone involved in trying to change policy. Anastasia would love to hear any feedback you have – as long as you don’t want to convene a conversation with stakeholders.
Invest in Women
We’re partnering with the Invest in Women taskforce on a report focusing on angel investment. While we tried to get to as many parts of the UK as possible in our recent roundtables, we appreciate that we couldn’t hit every postcode. That’s why we’re opening up the opportunity for you to feed into the report. You’ll have to be quick though – the Call for Evidence will close on Saturday 9 November. Please feel free to share among your networks or on social media. Everything you need to know is here.
Be Our Host
We’re busy planning a lot more breakfasts and dinners with Britain’s leading entrepreneurs – often featuring a senior politician. We have a number of organisations who regularly host us, but we’re looking for three more to join us as hosts for 2025. Get in touch if you would like to discuss how this works.
Today, the Chancellor Rachel Reeves delivered the Autumn Budget. In short, it entails more spending, more tax rises and more borrowing. Growth forecasts from the Office for Budget Responsibility, meanwhile, are anaemic. We issued the snap reaction to the Budget not long after she finished addressing the Commons, and we’ll be digging into things in more depth later in the week — so stay tuned by subscribing to our Friday newsletter if you aren’t already.
📊 What does today’s Budget mean for Britain’s startup community?
— The Entrepreneurs Network (@TenThinkTank) October 30, 2024
Here are our snap judgements on some of the key announcements for entrepreneurs across the country.
Thread below! 🧵👇 #Budget2024 pic.twitter.com/r3gGdOpgl9
Capital Gains Tax and Business Asset Disposal Relief (BADR)
Philip Salter, Founder of The Entrepreneurs Network, said:
“Entrepreneurs will be somewhat relieved that the Capital Gains Tax (CGT) rate wasn’t hiked as high as many feared. Similarly, there were rumours that Business Asset Disposal Relief (BADR) would be scrapped, so the worst-case scenario was avoided. Nevertheless, BADR will still be ratcheted up over the coming years, meaning Britain will become an increasingly unattractive place to both start and exit a company.
We know that many entrepreneurs are already looking to move their business from the UK – and this only makes that move more compelling. This is why 1,250 of the UK’s most ambitious entrepreneurs signed our letter against such changes.
It’s not just entrepreneurs who will be impacted. Many fledgling startups give employees stock options or shares as part of their compensation package as they cannot compete with the higher salaries offered by established big corporates. Today’s changes will reduce this incentive, making it even harder for startups to attract the talent they need to scale, while denying workers the chance to own a piece of Britain’s growing companies.
Instead of hiking BADR, the Treasury should have retargeted the relief at founders who are scaling businesses, and have made it unlimited to incentivise the world’s best entrepreneurs to start, scale and sell multiple businesses in Britain.”
Employer National Insurance Contributions
Eamonn Ives, Research Director of The Entrepreneurs Network, said:
“In a move that is expected to raise around £25 billion a year, employer National Insurance Contributions will increase by 1.2 percentage points to a rate of 15% and the threshold at which they start paying it was cut from £9,100 to £5,000.
The Chancellor might insist that this is not a tax on working people, but while it is true that it is employers who will bear the ‘legal incidence’ of the tax rise, economic evidence makes clear that increases like this are ultimately factored into lower wages for workers.
In short, and coupled with other measures such as the rise in the National Minimum Wage, it will become more expensive to take on staff, especially for those entrepreneurs employing people at the lower end of the earnings ladder. We shouldn’t be surprised if firms rethink hiring plans or water down pay rises.”
Business Rates reform
Eamonn Ives, Research Director of The Entrepreneurs Network, said:
“The promise to transform Business Rates will be watched closely by Britain’s entrepreneurs, who recognise them as one of the biggest impediments to growth. Our current system punishes those who improve their premises and the infrequency of revaluations means that rates can become out of step with market conditions.
Yet some of the measures announced today – such as a freeze for the small business multiplier and the introduction of a specific sectoral multiplier – only add further complexity to Business Rates. A proper overhaul, as we have called for in the past, would instead see the underlying land values taxed, and we encourage the Government to be bold as it develops its thinking on this policy.”
R&D spending
Anastasia Bektimirova, Researcher at The Entrepreneurs Network, said:
“At a time when the public finances are so stretched, the protection of funding for R&D spending and tax reliefs should be welcomed by Britain’s innovators. Only by bringing forward more innovation can we grow the economy in the long run and develop solutions to improving public services.
What starts as basic research can then spin out from universities as innovative companies. It is very important to protect that, so the £6.1 billion for core research is particularly positive, especially with little fiscal room on spending.
It would be a mistake to prematurely interpret the silence on any major AI-related announcements as a lack of ambition. The Budget has made it clear that the AI Opportunities Action Plan will be published soon, which will set out the Government’s plans – and should match the ambitions of the sector.”
On the new Life Sciences Innovative Manufacturing Fund:
“The new Life Sciences Innovative Manufacturing Fund is a welcome intervention into fundamentals that will help keep more life sciences innovation in the UK as it is scaling. Limited manufacturing infrastructure is often cited as a critical factor prompting innovators to relocate.”
On the new R&D Missions Programme:
“A new R&D Missions Programme shows that, as expected, the five missions will be an important framing for innovators trying to make a compelling case when engaging with the Government. It will be particularly interesting to see the details of how the growth mission will be framed here, as much of R&D work naturally fits it already.”
