I won’t be writing on today’s events. Between hitting send and it landing in your inboxes there’s every chance the Government will have u-turned yet again. But as luck would have it, I can distract you from it all with a new report we released this week in the House of Lords: Tomorrow’s Entrepreneurs.
It’s in partnership with Youth Business International (YBI), a global network of expert organisations in over 40 countries supporting young people to turn their ideas into successful businesses, creating jobs and strengthening communities.
The report is built around polling of young entrepreneurs (under 35) and not-so-young entrepreneurs (35+). We find that young entrepreneurs are twice as likely to say their business’s primary aim is to solve a social or environmental problem (39% to 18%), as well as caring more about things like the ethics of the suppliers, diversity, and helping employees live fulfilling lives outside of work.
Crucially, we found that trying to solve environmental or social problems was not incompatible with pursuing growth. In fact, according to our polling, the more a business turns over the more likely they are to agree that their business’s primary aim was to tackle a social or environmental problem, with close to half (47%) of entrepreneurs turning over £1m+ each year agreeing.
Unfortunately our report shows that access to entrepreneurship isn’t universal. Young entrepreneurs are more likely than older entrepreneurs to come from a privileged background. They are more than three times as likely to have attended a private school compared to the general public (20% vs 6.5%), more likely to say they had help through personal connections to get their business running than older entrepreneurs (45% vs 38%), more likely to have successfully raised finance than older entrepreneurs (43% vs 31%), and less likely to have attended a comprehensive school than older entrepreneurs (49% vs 63%).
There are a lot of policy levers that need pulling to fix this, but we focus on three. First, we want to bring back the Enterprise Allowance. Not the half-baked New Enterprise Allowance that was recently scrapped, but the full-throttled policy devised by Lord Young under Margaret Thatcher, which properly helped unemployed people who set up their own business.
Second, we want better support systems for young entrepreneurs to help them make connections: providing them with information about how to set up and run a business, linking them up with mentors, and ensuring they have opportunities to network with people who could support their businesses, especially potential investors. This may sound trite, but it’s no less important.
In practice, this means working with the grain of successful interventions that are taking place in the private and charitable sectors. Too often the Government intervenes, disrupting and crowding out established support, before pulling out with a new Minister or Government joins who wants a headline or two – or some spending cuts.
Third, we want the broader use of Challenge Prizes and Advanced Market Commitments to give young people, who are trying to innovate solutions to big problems, more certainty that their work will become profitable and attract more investors to pro-social companies. This is something we were calling for to fight Covid, with great success, but it could and should be applied to more of the world’s biggest problems.
It would be great to chat with anyone who wants to help us take any of these (or other) ideas forward. You’ll see that this report sits nicely into our large and growing body of work on supporting young people. We’re also keen to look at how we can support older entrepreneurs, of course.
(For those of you who are not just sick of politics, but policy too, the report also uncovers six entrepreneurial tribes: Mission-Driven Founders, Industrious Entrepreneurs, Modern Artisans, Established Founders, Independent Entrepreneurs, and Socially-Conscious Solopreneurs – take a look to see which sounds most like you.)
Give Growth a Chance
Whatever happens over the next few years, month, days or minutes – let’s not give up on growth. To this end, check out the latest edition of Works in Progress for thoughts on getting energy that is so abundant that it’s almost free, the risks of not taking risks, finding out from J. Storrs Hall where your flying car is, and much else besides.
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