Startup Manifesto: Utilise private coding schools as lifelong learning providers

Policy 7: Utilise private coding schools as lifelong learning providers

In collaboration with The Coalition for a Digital Economy (Coadec), we have produced a manifesto to make Britain the best place in the world to start and grow a business. It features 21 policies across three key policy areas: access to talent, access to investment, and regulation. Over December, we’ll be sharing one policy every day. To read the full manifesto, click here.

It’s no secret that there is a real digital skills shortage here in the UK. Tech companies are starting to feel the squeeze already with one study suggesting the country is losing out on £63bn a year because companies are struggling to find people with adequate digital skills. 

Better education helped power economic growth in the 19th and 20th centuries, and efforts to modernise the national curriculum to include coding – as well as through digital T-Levels – have been extremely welcome. But addressing the digital literacy and employability of 5-18 year olds is only one facet to ensuring an adequate talent pipeline. 

Private coding schools are a widely untapped resource that have a proven track record of turning novices into fully qualified coders in just 12 weeks. We should leverage their success by putting them on a more formal footing with the current education system. Allowing coding schools, and their prospective students, to tap into government funding would ensure that it’s not just those in traditional education that have access to digital skills training opportunities. 

Taken alongside the National Retraining Scheme, private coding schools can play a crucial role in ensuring that the labour market evolves alongside the skills demand. The next government should explore ways of harnessing the success of our coding schools, as they can provide invaluable mid-career education and help to upskill and reskill sections of the workforce within a short time frame. This will ensure the current and future workforce have the necessary skills.

Startup Manifesto: Support more women to start and scale businesses

Policy 6: Support more women to start and scale businesses

In collaboration with The Coalition for a Digital Economy (Coadec), we have produced a manifesto to make Britain the best place in the world to start and grow a business. It features 21 policies across three key policy areas: access to talent, access to investment, and regulation. Over December, we’ll be sharing one policy every day. To read the full manifesto, click here.

Women have made great strides in entrepreneurship this past decade. In 2011, 11% of startups that raised equity investment for the first time were female founded. By 2018, the figure had almost doubled to 21%. Once funded, women-led businesses are just as likely to secure second and third rounds of financing. 

Barriers to participation and growth persist, however. Just one in five business owners is female and women-led firms are underrepresented in those sectors most likely to scale (e.g. tech and IP-based businesses). Studies suggest they are held back by three factors: access to finance, risk aversion, and access to networks.

We offer three recommendations to ensure more women start and scale businesses. First, we need to tackle STEM drop-off rates by gathering more data, consulting with schools and universities to examine the role of socialisation in the disparity, and examining how careers guidance could inform and tackle gender stereotypes. 

Second, we should ensure the Minister for Women and Equalities has female entrepreneurship in their remit, and encourage MPs and Ministers to open the doors to Number 10 and the House of Commons to formally validate and celebrate female entrepreneurs’ efforts.

Finally, a lack of networking opportunities remains a persistent barrier to female founders. By providing networks – through LEPs, for instance – and encouraging more female employees and founders to get into schools and universities, we can shine a spotlight on role models and inspire the next generation.

If women set up businesses at the same rate as men, we’d have 1.1m more in this country. If they can scale them at the same rate too, we could add nearly £250bn to the UK economy.

Startup Manifesto: Extend the Tier 5 Youth Mobility Scheme visa to European citizens

Policy 4: Extend the Tier 5 Youth Mobility Scheme visa to European citizens

In collaboration with The Coalition for a Digital Economy (Coadec), we have produced a manifesto to make Britain the best place in the world to start and grow a business. It features 21 policies across three key policy areas: access to talent, access to investment, and regulation. Over December, we’ll be sharing one policy every day. To read the full manifesto, click here.

Tier 5 is a successful suite of visas that support youth mobility. The Tier 5 Youth Mobility Scheme visa currently allows those aged 18 to 30 from specific countries to live and work in the UK for up to 2 years, which includes the freedom for them to start their own business. This should be extended to citizens of EU countries and it should also be considered in future trade deals, if we leave the European Union.

The Tier 5 visas allow young people to get experience of the job market, but migrants’ connections can also benefit UK businesses to scale up by helping support expansion and growth into new markets; strengthening client relationships in existing markets abroad by being able to use their language and cultural awareness; and helping with business activities using local connections within the UK.

Migrants are able to bring to the workplace culturally unique and complementary skills, as well as knowledge of processes and ideas. They have been known to innovate, up-skill colleagues, improve processes and secure new work.

If there isn’t the political appetite to extend this scheme to the whole of the EU, the UK could discriminate, picking countries where there is a perceived special relationship, while allowing citizens of other EU countries to use the Tier 5 Temporary Worker – Government Authorised Exchange visa. The number of visas allocated to each scheme would need to be significantly increased.

In addition, to make the visa system easier for migrants, all Tier 5 visa holders should be able to switch from Tier 5 to Tier 2 (assuming they find a sponsor) as well as other visa routes without the added unnecessary bureaucracy of having to leave the country and apply from their home country.

Startup Manifesto: Reduce the Tier 2 Visa Salary threshold and allow stock options to be considered in visa applications

Policy 3: Reduce the Tier 2 Visa Salary threshold and allow stock options to be considered in visa applications

In collaboration with The Coalition for a Digital Economy (Coadec), we have produced a manifesto to make Britain the best place in the world to start and grow a business. It features 21 policies across three key policy areas: access to talent, access to investment, and regulation. Over December, we’ll be sharing one policy every day. To read the full manifesto, click here.

The current salary requirement of £30,000 for Tier 2 Visas has proved difficult for startups to meet because many people are paid less in the early stages of a company. ONS data shows that 46.1% of people employed in technical jobs receive a salary of less than £30,000, which makes it difficult for startups to hire at junior and mid-level positions, as those salaries fall below the threshold. These positions cannot be filled easily via the Tier 1 Exceptional Talent Visa either, which leaves a hiring gap for many companies. 

It would be preferable for the salary threshold to be lowered to around £21,000, which 25.3% of employees in technical jobs and 39.2% of all people in full-time employment earn less than.

Stock options form an important part of the compensation packages offered by startups, as equity is often offered to key hires in lieu of a higher salary, in order to moderate operational costs at the beginning of a startup’s lifecycle. There is no reason why their value should not be taken into account for the salary thresholds in visa applications, especially since they are already used for other reporting criteria such as gender pay gap reporting. It would be reasonable to expect the equity to be written into the employment contract and worth under 30% of the total compensation package. 

Startups are able to compete against big tech companies for domestic top-tier talent by offering equity in lieu of a higher salary. They should be given the same level-playing field when seeking to hire from abroad.

Startup Manifesto: Reintroduce the Tier 1 General visa – or an equivalent

Policy 2: Reintroduce the Tier 1 General visa – or an equivalent

In collaboration with The Coalition for a Digital Economy (Coadec), we have produced a manifesto to make Britain the best place in the world to start and grow a business. It features 21 policies across three key policy areas: access to talent, access to investment, and regulation. Over December, we’ll be sharing one policy every day. To read the full manifesto, click here.

If and when we leave the European Union, ending free movement will deprive startups of a vital source of high-skilled labour. This makes reforms of other visa categories even more necessary. 

The Government has called for the introduction of a points based system, but it’s rarely acknowledged that the current system is the remnants of one. In 2015, the government stopped accepting applications for the Tier 1 (General) visa, which had been introduced in 2008 to replace the Highly Skilled Migrant Program (HSMP).

The Tier 1 (General) visa allowed highly skilled migrants from around the world to come to the UK to live and work for any employer, including working for themselves, with the initial visa lasting for two years. This meant that the best and the brightest could to the UK with the freedom for the individual of not being tied to a specific employer, while early-stage businesses could employ them without the costs and bureaucracy of needing to go through a sponsorship route.

If we are to compete internationally, the next government should bring back the Tier 1 (General) visa, or create a similar path. 

Startup Manifesto: Ensure that the Start Up and Innovator Visas are implemented successfully

Policy 1: Ensure that the Start Up and Innovator Visas are implemented successfully

In collaboration with The Coalition for a Digital Economy (Coadec), we have produced a manifesto to make Britain the best place in the world to start and grow a business. It features 21 policies across three key policy areas: access to talent, access to investment, and regulation. Over December, we’ll be sharing one policy every day. To read the full manifesto, click here.

International talent is the driving force behind the UK’s startup success story. While just 14% of UK residents are foreign-born, 49% of the UK’s 100 fastest-growing startups and 11 out of the UK’s 16 startup unicorns (pre-IPO startups with a valuation of over $1bn) have at least one foreign-born co-founder. There is an overwhelming economic case for keeping the UK open to international entrepreneurial talent.

The Tier 1 Entrepreneur and Graduate Entrepreneur visas were bureaucratic, badly promoted, and not fit for purpose. The government was right to replace them with the new Innovator and Start Up visas giving incubators, accelerators, and venture capital firms a key role as external endorsing bodies. However, serious flaws in the implementation of the Innovator and Start Up visas risk making it even harder for foreign entrepreneurs to create jobs in the UK.

At the time the previous Tier 1 Entrepreneur visa route was closed, there were no endorsing bodies ready to accept applications, and only one of the 30 initial endorsing bodies had any information about the visa on their website. This created a situation where the UK was, briefly, the only major developed economy without an entrepreneur visa route. In the first quarter since the Innovator visa route opened just two applications were successful. At least four of the initial 30 endorsing bodies have already dropped out.

There are two major flaws in the implementation of the Innovator and Start Up visas. First, the requirement for endorsing bodies to receive approval from two different government departments has delayed endorsing bodies from being able to accept applications. This additional requirement was announced after the scheme had been live for 2 months and without any pre-warning, after a number of bodies had already submitted applications to become endorsers. Second, endorsing bodies are unable to charge immigration fees, despite the fact that in order to endorse an applicant, the endorsing body must input several hours of work in assessing the business plan, alongside other costs. 

If endorsing bodies are unable to charge fees, they will only have a financial motivation to endorse an applicant if they are taking loan or share capital in the new business. In practice, entrepreneurs who have their own capital, or capital from organisations other than the small pool of pre-approved endorsing bodies and don’t want to give up additional equity will find it difficult to enter using this route.

Alongside resolving the issues mentioned, the Home Office should also collaborate more with Local Enterprise Partnerships, cities, and business groups to ensure that sponsoring organisations have a wider geographic and industry spread so they better represent the UK’s entrepreneurial ecosystem.