Patent Buyouts, Fed Policy & Scott Kupor

The Nobel Prize in Economic Science

Suggested by Sam Dumitriu, research director at The Entrepreneurs Network

My first port of call when the Nobel Prize in Economics is announced is the Marginal Revolution blog. Within moments of the announcement, Tyler Cowen and Alexander Tabarrok provide an essential summary of the winners’ work. They’re good at picking out papers that might be missed by others.

Banerjee, Duflo, and Kremer won the award for using randomised controlled trials to solve tricky problems in development economics. Duflo and Banerjee have a very readable book called Poor Economics, that summarises the research project and highlights some of the more surprising findings. But in Tabarrok’s post, Kremer gets the attention. In particular, the concept of patent buyouts, a nifty idea to incentivise research without the monopoly costs of patents. The idea had a real world impact. The Advance Market Commitment for Vaccines was used to guarantee a market for the pneumococcal vaccine which has now been given to some 143 million children.

Fixing the Fed’s framework with paychecks, not prices

Suggested by Ant Breach, analyst at Centre for Cities.

A new thinktank in the US, Employ America, is pushing for a reform to how central banks and especially the Federal Reserve work. Their big idea is that the Fed should shift away from targeting 2% consumer price inflation to targeting growth in gross labour income.

They have two good reasons to do so. The first is that it will allow for more responsive monetary policy. It takes time for changes in supply and demand at the macroeconomic level to cascade their way down to consumer prices, especially to the degree which triggers a response by the Fed. But data on gross labour income can be collected much more rapidly, allowing for finer-tuned monetary policy.

The second reason is it would rewire the Fed to pursue policy which supports growing living standards. Targeting consumer prices means that monetary policy is structurally more hawkish than it is designed to be. In practice, a target of 2% average inflation functions as a cap which inflation has rarely risen above. Targeting gross labour income would connect the lever of monetary policy to aggregate demand and the purchasing power of paychecks, more effectively improving the standard of living and growth than consumer price targeting has done.

Scott Kupor on venture capital

Suggested by Philip Salter, founder of The Entrepreneurs Network

This time tomorrow evening I'll be having a fireside chat with Andreessen Horowitz’s Scott Kupor about his book Secrets of Sand Hill Road: Venture Capital and How to Get It. He wrote the book to demystify and democratise venture capital funding: “Eliminating the information asymmetry barriers between entrepreneurs and VCs.”

James Pethokoukis of the AEI interviewed Kupor earlier this year. With the growing regulatory backlash against Silicon Valley companies, Kupor offers a note of caution: “Part of what I try to talk to the regulators about is just how well we’ve done from a policy perspective in enabling entrepreneurship in this country. One of the wisest decisions the US government ever made, in the early 1990s, was to enable the internet to be released into the wild and to not regulate it. Notwithstanding some of the challenges we have today, a lot of the last twenty-plus years of economic growth and development that we’ve seen has been a function of that.”

In an increasingly flat world, Kupor is concerned that regulations could knock the US off the top spot as the best place in the world to start a company.

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Right here, Right Now

Yesterday we launched our latest Female Founders Forum report at the Barclays Entrepreneur Awards. In Here and Now we interrogate follow-on funding data to reveal that women-led businesses are just as bankable an investment as exclusively male-led businesses.

Using Beauhurst data, we reveal that female-founded startups were just as likely to raise additional rounds of funding compared to non-female-founded firms: 52% vs 51% for businesses without a female founder.

As Annabel Denham concludes in her Telegraph column: "There is more to do. A lot more. We must continue to highlight the challenges still faced by female entrepreneurs, but these new figures show we are on the right course. Only by celebrating how far we’ve come can we inspire the next generation."

We've been running the Female Founders Forum for three years in partnership with Barclays. In previous years we revealed the equity funding gap in the Untapped Unicorns report and championed paying it forward in our Mentoring Matters report. In the process we've held loads of events around the UK.

You can read more about our latest report in City AM, where Juliet Rogan of Barclays has written on why "it’s time to shout louder about the success of our entrepreneurs." And Kim Darrah of the FT's Sifted has written on the fact that "female startup bosses who succeed in raising a first round are (ever so slightly) more likely than men to attract funding later in the game".

At yesterday's launch, Annabel interviewed Emma Sinclair MBE and Tugce Bulut – both inspirational entrepreneurs and Members of the Female Founders Forum. Tugce is co-founder and CEO of the innovative market research company Streetbees, and Emma's latest venture is the corporate alumni network EnterpriseAlumni. Check them out.

You can download a two-page summary of the report here, and read the whole thing here. (Incidentally, the report's designer, and a female founder in her own right, Eleanor Hyland-Stanbrook comes highly recommended. Check out Studio Twenty Twenty.)

If you're keen to get more involved in the Female Founders Forum, sign up to Annabel's quarterly newsletter.

SEIS The Opportunity
The Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS) are seen by many entrepreneurs and investors as critical to supporting startups and scaleups.

We’re keen to make it easier for startups to access capital and anecdotally we’ve heard that the Advanced Assurance process for EIS and SEIS can cause real headaches for entrepreneurs.

Our Research Director Sam Dumitriu is investigating ways to improve the EIS and SEIS Advanced Assurance process to reduce unnecessary delays. If you’ve gone through the process, he’d love to hear about your experience (good or bad). Your experiences will go into informing our policy work. Drop Sam an email if you want share your experiences.

Read the full newsletter here, and sign up here.

Road Tax, Progress & Belarus

A road map for motoring taxation

Suggested by Sam Dumitriu, research director at The Entrepreneurs Network

Ahead of every Budget, the Institute for Fiscal Studies puts out its Green Budget. It sketches out the key policy choices faced by government and pushes important, but neglected issues onto the agenda. In their latest Green Budget, they look at taxes on motoring. It’s an issue important for three reasons, fiscal sustainability (they raise £40bn per year), productivity (congestion is a drag on it), and the environment (motoring is a massive source of carbon emissions).

They point out that the shift to electric vehicles, while a win for the environment will deprive the government of revenue (electric cars don’t pay fuel duty or road tax). As there’s still a need to fund the roads and to discourage congestion, the IFS calls for the lost revenue to be replaced with a system of road pricing where charges vary by time and location.

Though technologically feasible and tried elsewhere, it’ll be a tough political sell. But it’s got two things in its favour. First, it’ll be easier to replace fuel duty before there’s a large interest group of electric car drivers used to lower taxes. Second, while there’d be some ‘losers’ (drivers in congested cities), there’d be far more ‘winners’ (such as those driving long distances in rural areas).

How life sciences actually work

Suggested by Philip Salter, founder of The Entrepreneurs Network

Alexey Guzey thinks scientific progress in biology isn't slowing down. If he's right, this would be a vital corrective to the growing consensus that progress across the sciences is slowing.

Guzey writes: “Yes, funding agencies are risk-averse; yes, academia now selects for things you probably don’t want it to select for, like conformity and high conscientiousness; yes, an average scientist is not in academia for the love of science (and maybe the productivity of an average scientist is decreasing. However, all of this does not mean that science is stagnating or even that it is slowing down.”

In 2018, we had the first bionic hand, a new 3D bioprinting technique, and a method through which the human innate immune system may possibly be trained to more efficiently respond to diseases and infections, for example. And these three breakthroughs are just a snapshot of what happened in January.

Perhaps we can be more optimistic about the prospect for progress in our lifetimes. At the very least, Guzey provides an update to our template for how to think about the process of progress.

Insulating Belarus from external shocks

Suggested by Anthony J. Evans, professor of economics at ESCP Europe Business School

Pavel Kallaur, Chairman of the central bank of Belarus, provides a useful overview of the state of the economy in The Banker. Improving competitiveness has been a stated aim for Belarus over recent years, and my own research suggests that competitiveness has been improving in recent years. 2018 saw their inclusion in the Economic Freedom of the World Index for the first time, and they have since moved out of the "unfree" category.

Belarus Hi-Tech Park, in particular, has received a lot of attention. The lack of privatization in Belarus means that most private companies are start ups, and advanced payments technology has contributed to a blossoming tech sector. Success stories success such as Facebook-acquired MSQRD, and NYSE-listed EPAM are there.

Companies located in the park receive tax and social contribution advantages, but the zone is a virtual one – it isn’t a designated geographical area. This gives policymakers a lot of flexibility and interestingly last month officials touted the idea of Bulgarian companies joining the park.

Anthony has written here on the economic competitiveness of the Belarus.

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Share of Funding to Women-Led Firms Doubles in Less Than a Decade

A report from the Female Founders Forum – with a foreword from Rt Hon Liz Truss MP – reveals that while the percentage of deals to female-led teams slightly dipped in 2018, female-led businesses represent a growing share of investment activity and receive similar rates of follow-on funding.

• Female-founded startups are receiving a growing share of investment. In 2011, 11% of startups that raised equity investment were female founded. By 2018, this figure had nearly doubled to 21%. 

• Of the 6,147 investment deals made in 2018, 17.9% went to companies with at least one female founder, down from 18.2% in 2017.

• Nonetheless the total amount invested in businesses with at least one female founder in 2018, as a percentage, was 11.4%, up from 9.9% in 2017.

• Using data from Beauhurst, we find that female-founded businesses also have similar rates of follow-on funding. Once they received an initial investment , female-founded startups were just as likely to raise additional rounds of funding  compared to non-female-founded firms (52% vs 51% for startups without a female founder).

• Of the 19 high-growth companies that have floated on the stock market since 2011, three (or 15 %) were female founded. Of the 665 high-growth companies that have been acquired since 2011, 53 (8%) have at least one female founder.

• Though we find women-led businesses securing investment in all sectors, they are over-represented in some sectors (industrials), and under-represented in others (tech and IP-based businesses), relative to all equity-funded startups.

• In a foreword for the report, Rt Hon Liz Truss MP, Minister for Women and Equalities, says: “We have made great strides. I hope and expect that a decade from now, we will look at how far female entrepreneurship has come.”

• In March HM Treasury found that the gender gap accounts for approximately 1.1m missing businesses, which equates to a £250bn opportunity for the UK economy.

• Female VC partners are three times more likely to invest in companies with a female CEO, but Diversity VC has revealed that 83% of VC firms have no women on their investment committees.

Here and Now: Making the UK the Best Place in the World for Female Founders, a new report from the Female Founders Forum (a joint Barclays/The Entrepreneurs Network project), finds that while in 2011 just 11% of funding went to firms with at least one female founder, by 2018 this figure had grown to 21%. Further, female-founded businesses have similar rates of follow-on funding – reversing any perceptions that women are a less bankable investment.

Once funded, the percentage of women-founded startups that raised additional rounds of capital was similar to non-women-founded firms (52% vs 51% for startups without a female founder). Among startups five or more years on from their first raise, female founded startups were more likely to have secured a second funding round (66.5% vs 62.8%) and marginally more likely to have secured a third funding round (42.8% vs 41.8%).

This makes sense: at the early stages where venture capital firms make their initial investments, there is limited rigorous, objective information available. It means the founding team comes under great scrutiny, and there is a risk that gender bias can play a decisive role in who receives investment. As investors get more information, however, unconscious bias is less decisive.

The five highest raises with a female founder in 2018 were Orchard Therapeutics (£117.5m), MADE (£40m), Hyperoptic (£38.6m), Darktrace (£38m) and COMPASS Pathways (£35m). 

The Gender Gap

The report draws on other evidence that finds one in five businesses is created by a woman, that funding rates for all-female teams are still abysmal (these firms receive just a penny in every pound of VC investment) and that male-led businesses are five times more likely to achieve £1m+ turnover. Women tend to be less concerned with expanding their businesses and are over-represented in service industries.

Though we find women-led businesses securing investment in all sectors, they are over-represented in some sectors, and under-represented in others, relative to all equity-funded startups. They are less likely to be tech or IP-based businesses (27.9% vs 32.9% for all equity-funded startups) but more likely to be involved in the category of industrials (21% vs 15% for all equity-funded startups). Within the category of industrials, female-founded businesses are twice as likely to be involved in clothing (3.1% vs 1.5% for all equity-funded startups) and significantly more likely to be involved in food and drink based enterprises (10.5% vs 5.7% for all equity-funded startups).

In a Foreword to the Report, Rt Hon Liz Truss MP writes:

“It’s completely wrong that 50% of the population are not being fully utilised, they’re not having their talents used, and they’re not contributing as they could do to our fantastic economic success story. It's important to speak out against inaccurate stereotypes and celebrate the great female-founded businesses like HyperOptic and Darktrace. I commend this report and the ongoing work of The Entrepreneurs Network and Barclays on the Female Founders Forum."

Annabel Denham, Head of the Female Founders Forum, says:

Though there is undeniably work to be done to level the playing field and tackle unconscious bias, by dwelling on the negatives we risk missing how far we have come. We can now reveal that funding rates are similar for male and female-led businesses, dispelling the myth that female founders are a less bankable investment. Ensuring women-led businesses start and scale is vital to our economy and society. We need more investment to pour into these firms, more female networks, and many more role models to inspire the next generation.”

Juliet Rogan, Head of High Growth and Entrepreneurs at Barclays, says:

“The opportunity is clear – if we create an environment where women start and scale businesses at the same rate as men, we could add nearly £250 billion to the UK economy. At Barclays we are committed to helping make this happen. We have the trust of 24 million customers and nearly one million businesses, and inclusive UK economic growth is essential for our success. We are a proud signatory of the Investing in Women code, and we are committed to providing all the support and resources needed for female entrepreneurs to thrive.”

Recommendations

Here and Now raises a number of issues for policymakers, schools, the media and others to consider.

• Government should open the doors of Number 10 and Parliament to female entrepreneurs and formally validate their efforts. 

• Government should gather more data on STEM drop-off rates, examine the role of socialisation in the STEM disparity, and ensure careers guidance informs and tackles gender stereotypes.

• Schools must instil the right skills, financial literacy and self-belief in young girls from school age so that they may become the entrepreneurs of the future.

• The media must continue its efforts to shine a spotlight on the barriers to female entrepreneurship, profile those women in male-dominated industries, and ensure others get the role models they need to start and scale up.

• Venture Capitalists could continue to work with organisations like Diversity VC and consider training programmes to tackle unconscious bias.

The report features three case studies: Tania Boler (Founder – Elvie), Alexandra Daly (Founder – AA Advisors), and Tugce Bulut (Founder – Streetbees). All are available for interview.

Tania Boler, Co-Founder, Elvie

Elvie – which is behind the kegel trainer and silent breast pump – was recently listed as one of the UK’s Top 100 fastest-growing businesses. “When raising money, bear in mind that you will need to work with these individuals for a long time. You need to be sure they are right for you – not just the other way around.”

Tugce Bulut, Co-Founder, Streetbees

Turkish-born entrepreneur Tugce Bulut founded AI market research company Streetbees in 2015. It was recently listed as one of the UK’s Top 100 fastest-growing firms. “We must teach children entrepreneurial skills from the start. I cannot stress enough how important it is to learn how to take risks and cope with failure.”

Alexandra Daly, Founder, AA Advisors

AA Advisors was founded in 2007 when Daly decided to apply her skills and knowledge, acquired during a career working for some of the largest global investment banks, to her own “PnL”. 12 years later later Daly is mentor to five women and sits on the board of the APPG for Women and Enterprise. “Never before has there been a better time to be a female founder: we need to be positive about the here and now.”

Stalemate

Unless Boris and Dominic Cummings are playing a game of 4D chess unintelligible to neither man nor beast, the Prime Minister's "do or die" promise to leave the EU is looking increasingly like the bluff most assumed.

Next stop: extension then general election. Which is why the Prime Minister's Conference speech – like that of Labour's and Lib Dems – felt more like a pitch to lead the country.

As such, Chancellor of the Exchequer Sajid Javid revealed the Conservative Party's most concrete policies impacting entrepreneurs, including:

On Post-Brexit Trade: "We’ll be able to pursue a genuinely independent trade policy. We’ll be able to replace inefficient EU programmes with better, home-grown alternatives. And from retail to green tech, we’ll have the opportunity to design smarter, more flexible regulation."

On Red Tape: "To help us do that, I will launch a Brexit Red Tape Challenge to help identify EU regulations that we can improve or remove. Liberating our entrepreneurs, small businesses and consumers from the burden of over-bearing bureaucracy, wherever we see it. Doing what a good pro-business government does."

On the Minimum Wage: "Over the next five years, we will make the UK the first major economy in the world to end low pay altogether. To do that, I am setting a new target for the National Living Wage: Raising it to match two-thirds of median earnings. That means, on current forecasts, this ambitious plan will bring the National Living Wage up to £10.50, giving four million people a well-earned pay rise."

On Broadband: "We have rolled out superfast broadband but we have fallen behind many European countries on the next generation of technology. And as we catch-up I don’t want any part of our country to fall behind others. So I can announce we are committing £5billion to support full-fibre rollout to the hardest to reach 20% of the country."

Top Tier
Hot off the press, we've just released our latest Policy Update on recent changes to the Tier 2 Visa. It's good news for entrepreneurs, with a significant expansion of the shortage occupation list, including for civil and electrical engineers, web design/developers, software developers, biologists and bio-chemical scientists.

This means for these and other jobs there's no need to advertise for 28 days before recruiting outside the UK; no need to meet the minimum income threshold (£30,000); reduced visa fees; and a priority if the visa cap is reached.

You can read Sam Dumitriu's full update here, and sign up to future policy updates here. And if you work at an organisation with expertise and want to partner on these updates, get in touch.

The Other Cameron
Mental health is a challenge for the majority of Britain’s entrepreneurs. Over half of entrepreneurs have suffered anxiety or panic attacks, nearly 7 in 10 report sleep problems, and 53% of founders say that building their business has been one of the toughest times of their lives. That's why the All-Party Parliamentary Group for Entrepreneurship is convening a roundtable later in the month to consider the scope of the challenge and what role government could play in better supporting entrepreneurs and their employees.

We have Dr Lisa Cameron, SNP Spokesperson on Mental Health and Guy Tolhurst, Founder of Intelligent Partnership and Adviser to The Entrepreneurs Network speaking. You can read more about Guy's story here, and watch the stories of Michelle Morgan, Nick Hussey, Kate Lester and Bonnie Chung, as part of Guy's Mindful Investor initiative.

Read the whole e-bulletin here, and sign up for the e-bulletin here.

Propaganda, Heroism & Trade Wars

When truth trumped propaganda in wartime

Suggested by Fred de Fossard, communications manager at Public First

Sean Coughlan’s BBC article about the newly released archives from the Ministry of Information shines an interesting light onto the British public’s attitudes throughout the Second World War. In a time of huge public anxiety, the government wanted to know what the public really thought: How were people responding to the bombing raids? What rumours were circulating? What was really irritating the public? The results are fascinating, and instructive for anyone trying to interact with public opinion today.

‘"People were saying, ‘We want the truth, even if it's bad. We want to be treated as adults."’

Fighting against the dictatorship of Nazi Germany, the Ministry found it important to present as much truth as possible to the public, rather than hide it. “It was a case of, 'We've got truth on our side, we're going to use it as a weapon. And we can't do the same as the Germans or the Russians […] There was a clear feeling that we were fighting the war for freedom, democracy and the truth – and those things were indivisible."

Politicians and entrepreneurs alike should remember the nuances in public opinion, and the value of honesty in communications, even in times of crisis.

The archives are online here, and make excellent reading.

The myth of heroism

Suggested by Annabel Denham, associate director of The Entrepreneurs Network

The idea of heroes is as old as Greek mythology but with superhero movies smashing box office records it has enduring resonance.

As with comic books, heroes in the classical narrative are special, marked from birth with a destiny only they can realise. But Dr Stephen Davies asks whether these heroes are necessarily different from the common herd. They were for Ayn Rand, and are treated as such in economics today – where we can find a focus on heroic inventors or entrepreneurs who are retrospectively seen as fulfilling their destiny.

But “this is not the only way of thinking”. In the domestic or bourgeois concept of heroism it is a person’s actions, not a specific set of characteristics – or, destiny – that defines heroism. What they defend can be fundamentally mundane – “the life and circumstances of ordinary people and the virtues they reflect”.

What do we take from this? First, "human progress is driven by ordinary people doing extraordinary things." Second, "we should avoid stories that suggest we can only be saved by heroic figures in the classical sense." Third, “the performance of simply quotidian tasks as well as private and personal acts of kindness” will preserve and improve everyday life.

Politics is the problem – trade is the answer

Suggested by Philip Salter, founder of The Entrepreneurs Network

“When goods don’t cross borders, soldiers will”. This widely misattributed quote may sound like common sense, yet many so-called foreign policy experts act as though it’s anything but.

Economist Scott Sumner takes this truism to its logical conclusion in hoping that China wins the ongoing trade war with the US. In answer to a reader’s question, “how can you support in any way the most murderous, totalitarian empire in world history?”, he replies: “I strongly oppose that regime, and trade with the Chinese people is my method of opposing the regime. If China wins the trade war, the US will be less likely to launch such foolish actions against other countries.”

For Sumner: “Hundreds of years of human history strongly suggest that trade makes people better, both at the individual level and the national level.”

History seems to be on Sumner’s side. As Marginal Revolution reports, Ju Hyun Pyun and Jong-Wha Lee have investigated the effect of trade integration on interstate military conflict. Based on a large panel data set of 243,225 country-pair observations from 1950 to 2000 it finds that an increase in bilateral trade interdependence significantly promotes peace.

All we are saying is give trade a chance.

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Pro Rogue?

This week it was the turn of Labour to hold their Party Conference.

Jeremy Corbyn had to bring forward his speech following the Supreme Court's judgement that the Prime Minister's suspension of parliament was unlawful. Corbyn led on that and the risks of a no-deal Brexit, but his speech was wide in breadth, including policies that would impact entrepreneurs:

On Workers Rights: "We’ll bring about the biggest extension of rights for workers our country has ever seen. We’ll scrap zero-hours contracts; introduce a £10 living wage – including for young people from the age of 16; give all workers equal rights from their first day in the job; take action on the gender, disability and ethnicity pay gaps; and introduce flexible working time for workers experiencing the menopause."

On Spending: "Labour will get our economy working in every town city and region with a record investment blitz, and we’ll boost the devolved budgets in Wales and Scotland. We’ll upgrade our transport energy and broadband infrastructure with 250 billion pounds of investment. And breathe new life into every community, with a further 250 billion of capital for businesses and co-ops. Investment on a scale our country has never known, bringing good new jobs and fresh growth to where you live."

Rebecca Long Bailey MP, Shadow Business, Energy and Industrial Strategy Secretary, gave more detail in her speech:

On Gig Workers: "Workers under Labour will get full legal rights – such as sick pay, holiday and parental leave and protection from dismissal from day one, even those working in the gig economy."

On High Streets: "Some of that action will be long-term changes, such as addressing the imbalance of tax treatment between traditional retailers and online sellers. That is why my colleague Bill Esterson is convening a cross-departmental taskforce to look into these complex issues."

On Business Rates: "On one of the most pressing issues, business rates we will introduce annual revaluations of rates, exempt new plant and machinery from revaluations, ensure a fair appeals system and fundamentally review the business rates system to bring it into the 21st century."

Next up it's the much reduced Conservative Party Conference. It's been been cut short after opposition MPs voted to punish the Government for proroguing parliament by not allowing the MPs time off to party in Manchester.

However, a lot of MPs still seem to be going, including Gillian Keegan MP and Dr Caroline Johnson MP for our event with Barclays and the Female Founders Forum. Our event is outside the secure zone, so no need to a pesky Conference pass. We also have Lou Cordwell OBE, Lisa Tse MBE and Juliet Rogan from Barclays on the panel. Sign up for free here.

On Your Marks
The Government has produced an 8-page booklet on how leaving the EU could impact your business. Read it here. Also, HMRC has launched an EU Exit Import and Export Trader Helpline for traders and hauliers importing from / exporting to the EU after October 31. The number is 0300 3301 331. Lines will be open from 8am to 6pm Monday to Friday.

The Government is also working with the British Library to produce a series of webinars to help prepare businesses for Brexit. The first webinar will be next Monday 30th September at 2pm covering the regulation of manufactured goods covered by the “New Approach” (i.e. mostly CE marked goods) in the event of no deal. Topics covered will include CE and UKCA Marking, Notified Bodies, conformity assessment, importer duties and declarations of conformity, and there will be the opportunity to ask questions. Find out more here.

As we head towards the cliff edge / Elysian Fields (delete as appropriate), or not, I'll update you on a few specific things you might want to think about / ignore (delete as appropriate). This week: Trade marks.

Trade marks are a form of intellectual property right, commonly taking the form of words, logos, or a mixture of both. Currently, you can apply at the UK's Intellectual Property Office (IPO) for a right that covers the UK, or at the EU Intellectual Property Office (EUIPO) for a EU Trade Mark (EUTM) which covers the whole of the EU. If and when we leave the UK, any existing EUTMs will only cover the remaining EU Member States, and so will not provide protection in the UK. However, to ensure that UK protection is preserved, the government will provide holders of existing EUTMs with a comparable UK trade mark on exit day. Find out more here.

Read the whole thing here, and sign up for the e-bulletin here.

Glaeser, Screen Time & Bright-Line Rules

The entrenched vs. the newcomers

Suggested by Sam Dumitriu, research director at The Entrepreneurs Network

Economist Ed Glaeser is the world’s leading expert on cities: “Everything you see around you today in the glittering, towering, often maddening cities we call home, has at some point or another been quantified and chronicled across his more than 600 written articles, and nearly 100,000 citations.” Since 2015, he has given an annual lecture in New York.

2019's lecture focuses on what he argues is the new divide in US politics: The entrenched vs. the newcomers. It’s a divide that applies equally well to the UK. He argues that we’ve seen a proliferation of rules, such as restrictions on new development, that favour insiders at the expense of the young. He believes that the young understand “that they’re being sold out, shut out, and they want to reshuffle the deck.”

Glaeser makes the case for the need for a new agenda focused on freedom: “Overmighty states are engines for empowering insiders. Markets are not. Markets are about making things open for any entrepreneur.”

In defense of screen time

Suggested by Philip Salter, founder of The Entrepreneurs Network

Björn Jeffery urges parents to move beyond the growing consensus that all screen time should be discouraged or at least tolerated. Like books and other media, he argues that screen time isn't inherently good nor bad. It can be both. The content and context matter.

Jeffery cites the biggest study we have on screen time from ten years of data and involving over 10,000 British preteens. What does it show? "Well, mostly nothing! In more than half of the thousands of statistical models tested, researchers found nothing more than random statistical noise."

For Jeffery, Fortnite and Minecraft point to a potential positive future, "where global collaboration is seamless and enriching". He has concerns about screen time in the extreme, but argues that by withholding screens from our kids we may be reducing a hypothetical risk at the expense a substantial future opportunity.

Using bright-line rules

Suggested by Scott Craig, adviser at The Entrepreneurs Nework

Do you have at least one 'bad' habit you’d like to eliminate? Are you checking emails at 11pm for example, or drinking more often than you would like? Then this big idea is for you. Habit researcher James Clear argues that setting progressively expanding ‘bright-line’ rules can help us overcome even our most deep-rooted habits.

Here's how it works. Pick a habit you'd like to change, then set a clear and unambiguous rule that’s initially very small in scope. For example, 'I don’t drink on Thursday evenings.' Once you can stick to the rule, gradually expand its scope, e.g. ‘I don’t drink on Weekday’s’, until – like an antibiotic spreading across a Petri dish – the bad habit is eventually eliminated.

Each week we send three links on the big ideas in entrepreneurship, innovation, science and technology, handpicked by the team, entrepreneurs, academics and friends of the think tank. Sign up here.

This Lady's For Overturning

It's Party Conference season. The Liberal Democrats went first, and as it may not have escaped your notice, their platform is centred on overturning the Brexit referendum. So far it seems to be paying off – yesterday they overtook Labour in the polls.

But what about their other policies? Jo Swinson's leadership speech focused on social issues and didn't speak about policies impacting entrepreneurs, but Ed Davey's speech did. Davey is the Lib Dem's Spokesperson on the Treasury as well as Business, Energy and Industrial Strategy, and though these aren't manifesto commitments, they will be useful for understanding where things might be heading.

On Funding: "We will back enterprise in communities and towns across our regions by relaunching our Regional Growth Fund that worked so well, and regionalising the British Business Bank, which the Liberal Democrats set up."

On High Streets: "We will restore high streets in our towns and cities, devastated by business rates and unfair competition from the likes of Amazon. Our plans to reform and cut business rates will breathe in new life."

On Productivity: "Britain’s productivity problem hasn’t been tackled properly for decades. So I’m going to let you into a secret. About our confidential economic plan. How Liberal Democrats will make Britain more productive. We will invest. In people. Massive investment. In education. In training."

On Climate Change: "My first Liberal Democrat budget will be a budget for people and a budget for the planet. A Climate Emergency Budget. We will invest in new technologies, to help tackle climate change."

On Monday we will be at the Labour Conference and the following week at the Conservative one with the Female Founders Forum that we run with Barclays. You won't need a Conference pass and can still get tickets for Brighton (here) and Manchester (here). Like every event we do – they are free. Do pop in to say hello!

Tech Nation
Tech Nation – a government-funded organisation for tech entrepreneurs across the country – was born out of Tech City, which was originally created to support the East London tech scene (dubbed Silicon Roundabout). So did Tech City work? Despite some important qualifications, a new paper suggests that the "policy substantively increased cluster size and density, most clearly for the younger, newer group of digital tech plants, and with increasing impact over time." For anyone interested in cluster policy, I would reading the conclusion in full, as the lessons extend to the whole country.

Applications are now open for Tech Nation’s three leading growth programmes – Rising Stars, Upscale and Future Fifty. They cover everything from seed funding to pre-IPO. Find out more here.

Ready Steady
Will we leave the EU at the end of next month? It looks less likely than it once did. Nevertheless, the government is adamant: "The United Kingdom will leave the European Union on the 31 October 2019 and your business will need to take action to get ready." The government is hosting Get Ready For Brexit events across the UK that they've asked me to share with you:

• Birmingham – 27 September
• Hull – 3 October
• Leeds – 4 October
• Derry/Londonderry – 7 October
• Belfast – 8 October
• Cardiff – 14 October
• Leicester – 24 September
• Perth – 24 September
• Glasgow – 25 September
• London – 20 September
• Northampton – 16 September
• Nottingham – 17 September
• Sheffield – 23 September
​• Swindon – 19 September

Find out more here.

Read the whole e-bulletin here, and sign up here.

Grandmasters, Koch & Unconscious Bias

The grandmaster diet: How to lose weight while barely moving

Suggested by Dr Anton Howes, historian of innovation

Chess grandmasters, it seems, can lose extraordinary amounts of weight when subjected to the stressful conditions of a tournament, burning up to 6,000 calories a day. The upshot is that at the very highest levels, things that would ordinarily seem minor for a sedentary sport – like diet, exercise, and energy levels – take on a huge significance.

For a top chess player like Magnus Carlsen, drinking chocolate milk instead of orange juice during a tournament can be the difference between winning and losing. The same goes for posture. When it comes to your fifth hour of play, it can make all the difference between burning out or still being fresh and alert. It’s the hour in which Carlsen tends to win. It shows that there’s always room for improvement, and that optimisation can really matter.

When goods don't cross borders, soldiers will

Suggested by Scott Craig, product manager at OneYearNoBeer

In Good Profit Charles Koch, one of the most successful and most unfairly maligned businessmen of our era, delivers a passionate and robust defence of free markets and an all-out attack on crony capitalism, which destroys value for consumers and damages people's faith in markets.

Charles successfully argues that the only way to profit over time in a system of voluntary exchange (a market) is by making others better off (as parties will not voluntarily enter an exchange unless both believe they will be better off). And that the only way to do that is to focus on understanding customers' unmet needs and finding ways to satisfy them better and faster than existing and potential competitors.

For Charles, the role of business in society is to provide products and services that customers value more than their best alternative, while more efficiently using resources than their competitors. If you can achieve that, then you will reap what he calls 'Good Profit'. Profit obtained by fair economic means. Profit of which you can be proud.

Diverse teams feel less comfortable — and that’s why they perform better

Suggested by Ben Fletcher, entrepreneur, sporadic investor and founder of Velocity²

To successfully scale your business, you need to have effective execution. Effective execution is just another way of saying that you make and implement the right decisions. There are lots of factors that feed into that - the quality of the people you hire, their access to information, the clarity with which you explain the objectives and aims of the company. But there's another key factor to consider: unconscious bias. Even if you hire people with the right skills, have crystal clear objectives and complete transparency, people will still make poor decisions sometimes.

The trouble with unconscious bias is just that: it's unconscious. However, you can create strategies to mitigate this bias and one of the best ways is to have a truly diverse workforce. Not just a box-ticking exercise where you hire some different genders and races, but truly diverse teams made up of people from different backgrounds.

People with different backgrounds have different experiences and expectations that means they would make different decisions presented with the same data. If you are inclusive and enable these voices to be heard and all the options carefully considered before a decision is taken, you can make better decisions.

However, there's a catch 22: people in diverse teams often feel the process of making a decision is laborious as there are different and dissenting voices: even though their decisions are better. (You can read more about how to be inclusive here.)

Sign up for Three Big Ideas here.

Viva la Visa

Finally some good news! This week Boris announced that the Post-Study Work visa will return in 2020. As my colleague Sam Dumitru wrote in City AM: "It is hard to think of a more short-sighted and self-destructive policy than Theresa May’s decision in 2012 to close the Post-Study Work visa route for those wanting to live and work in Britain."

It may not be immediately obvious why the return of the Post-Study Work visa is such a boon for entrepreneurship in the UK. After all, this was a visa that let foreign graduates stay for two years working for someone else – not themselves. However, delving into the stories of Britain’s top immigrant entrepreneurs reveals the importance of this route. Business ideas don’t come ready-formed upon graduation. A bit of experience goes a long way. Giving graduates the time they need to research and develop their business idea is essential and the Post-Study Work visa did exactly that.

Back in 2015 we surveyed international students with the National Union of Students, finding that 42% of international students intended to start up their own business following graduation. On the back of this, Made in the UK called for the return of the Post-Study Work visa. It's only taken four years to get what we want!

May’s decision to end the Post-Study Work visa put UK universities on the back foot compared to our global competitors. In our survey, only 18% of international graduates studying in the UK thought we had better post-study processes in place for international students than other countries.

We recently took a dive into the crème de la crème of Britain’s fastest growing companies in our Job Creators: The immigrant founders of Britain’s fastest growing businesses report. With support from Sukhpal Singh Ahluwalia, we looked at where the founders of these high-growth companies came from. It revealed that while 14% of UK residents are foreign-born, 49% of the UK’s fastest-growing startups have at least one foreign-born co-founder.

Many of the entrepreneurs moved to the UK to study at one of our world-leading universities. For instance, the co-founders of Oxford Space Systems, Vincent Fraux and Juan Reveles, both came to the UK to study. Their Top 100 company develops innovative deployable antennas and structures for space, employs over 35 people, exports to the US, Europe and Asia, and invests heavily in research and development to create intellectual property. Fraux thought the UK made a mistake by withdrawing the Post-Study Work Visa, “resulting in international students with potential leaving the UK right after finishing their degree.”

Miguel Martinez is the co-founder and Chief Data Scientist of Signal AI, a fast-growing UK company that analyses, in real-time, millions of news articles per day in order to improve the quality of business intelligence and decision making across organisations.

This Top 100 firm has grown from 3 people in a London garage to over 120 people in the UK, US and Asia, raising around $30m in the process. Miguel came to the UK from Spain to study for a PhD at Queen Mary’s University. Prior to today’s announcement he voiced his frustration at the UK’s irrational approach to post-study work, saying: “We are basically training the best people in the world, paying for part of their PhD with taxpayer’s money and then telling them they have to leave the country the moment they finish.” He welcomed the return of the Post-Study Work visa on Twitter.

With the presumed ending of free movement, more must be done if we are to create a visa system fit for attracting the world’s best entrepreneurs. A priority should be making the Innovator Visa, which had just two successful applications in the last quarter, fit for purpose. This is the visa anyone on the relaunched Post-Study Work visa will need to move onto if they decide to start a business. The Government should also consider allowing people to be self-employed on the new version of the Post-Study Work visa, giving them time to test out their ideas before starting a company through the Innovator route.

But, after years of criticising successive governments on this issue, it would be churlish not to take a few days off to give credit where it’s due. At a time of political polarisation, much of the credit for this change should be awarded to the Conservative’s Jo Johnson MP and Labour’s Paul Blomfield MP. Their cross-party efforts have paid off. As Johnson wrote in the foreword of Job Creators: “A global Britain embraces the aspirational values of international talent.”

(I've written for ConservativeHome on why letting overseas students stay to work is right, and opens up new opportunities for our economy.)

Sage Advise
Freelance writer Sabuhi Gard is looking for case studies for a guide she is producing for Sage on importing and exporting. The businesses need to employ around 50 to 100 staff. She wants to know about your export strategies and advice that could be given to other small businesses in the shadow of Brexit. You can drop her an email here.

Read the whole e-bulletin here, and sign up here.

Visas, Vitalik & Gender Equality Paradox

Visa concerns deter foreign-born PhDs from working in startups

Suggested by Sam Dumitriu, Research Director, The Entrepreneurs Network

A survey of over 2,000 US PhD students reveals that foreign-born PhD graduates with science and engineering degrees from American universities apply to and receive offers for technology startup jobs at the same rate as US citizens, but are only half as likely to actually work at fledgling companies. The problem? The high costs of sponsoring immigrant workers puts startups at a disadvantage compared to established firms such as Google and Facebook.

The researchers also found that foreign-born PhD students had a higher risk tolerance and a lower-preference for high pay than native-born PhD students. A larger follow-up study just released finds that foreign-born PhD students have greater entrepreneurial intentions and are more interested in commercialising research than US-born PhD students, but start businesses at a lower rate. The authors blame the US visa system again.

While the above study is focused on the US, it fits with our research on the UK. Our Job Creators report found that half of the UK’s fastest growing companies have at least-one immigrant founder. One of the report’s case studies was Miguel Martinez, co-founder of Signal AI. He started the company during the last year of his PhD. He recently told us that if he wasn’t an EU citizen, starting a company would have violated the terms of his student visa.

Vitalik Buterin on effective altruism, better ways to fund public goods, the blockchain’s problems so far, and how it could yet change the world

Suggested by Philip Salter, Founder, The Entrepreneurs Network

"Blockchains as they currently exist are in many ways a joke, right?” is something you wouldn't expect the co-founder of Etherium to concede. But Vitalik Buterin is the kind of person who defies expectations. Despite the reservations, in the latest 80,000 Hours podcast Vitalik still makes a bullish case for the blockchain – both the extent to which it’s actually helped people in developing countries move money around, and the potential deployment of blockchain applications outside of cryptocurrency.

Vitalik's views are insightful beyond blockchain though. To pluck one quote more or less at random, here he is on the threat of nuclear war. "A lot of problems become easier when you stop living in cities. Like in the nuclear case, I did the math once and if you spread out everyone equally across the entire earth’s surface then 7.6 billion people divided by 150 million square kilometres of land mass gives you 51 people per square kilometre and at that rate nuclear bombs become a less cost-efficient way of killing people than hiring samurais to run around with swords."

Listen to or read the whole thing. The host, Robert Wiblin, gives a useful introduction to anyone unfamiliar with the basics of blockchain at the start.

Part-time jobs help women stay in paid work

Suggested by Annabel Denham, Associate Director and Head of the Female Founders Forum, The Entrepreneurs Network

The gender equality paradox – recently articulated by Nima Sanandaji in his work on the Nordic Glass Ceiling – takes on a new significance in this Economist article examining the limitations of part-time work. Three-quarters of working women in Holland are part-time, and while the nation is often lauded for its work-life balance and contented children, these “come at a price”.

Just as Sanandaji has brought to light the aspects of Nordic social policies which have negatively affected some women’s career progress, so the Netherlands has the largest gap between men and women’s monthly income and pension entitlements across all western European countries. As with the gig economy or zero hours contracts, part-time work can be a welcome alternative to women leaving the labour market altogether.

Interestingly, median hourly pay for part-time employees was 4.4% higher for women than for men – but this will not compensate for the article’s finding that part-time jobs pay less per hour than full-time ones. “Part-timers are more likely to have a ‘bad’ job – one offering little training and few legal rights.” And crucially, even men face a dilemma: their requests to work part-time “are more likely to be rejected. And those who do work part-time risk discrimination.” Until we do away with these double standards, “many couples will still choose to scale back her career, rather than his”.

Sign up for Three Big Ideas here.

Letting students stay and work for 2 years after graduation will boost entrepreneurship

In light of today’s announcement that the government will reinstate the Post-Study Work Visa and allow international students to stay and work in the UK two years after they’ve completed their studies Sam Dumitriu, Research Director at The Entrepreneurs Network and author of the report Job Creators: The immigrant founders of Britain’s fastest growing businesses, said:

“This is long overdue. The UK’s world class universities draw in the best and brightest from across the world. Yet, for the past 7 years we’ve been kicking out skilled graduates if they can’t find an employer willing to go through the expensive and time-consuming process of sponsoring their visa in just 4 months. It is woefully short-sighted.

“Our research found that half of the UK’s 100 fastest growing businesses have at least one foreign-born founder. The vast majority of these immigrant founders told us they came to the UK in the first place to study and were only able to stay because of the Post-Study Work Visa or EU Free Movement. With Free Movement set to end, restoring the Post-Study Work Visa is an essential pro-entrepreneurship policy.”

Right Thinking

As an entrepreneur told me this morning, "we need a national endeavour, and one, unlike Brexit, that doesn't split the country down the middle." A good place to start could come from a new paper: Reviving Economic Thinking on the Right.

The authors are Sam Bowman, former Executive Director of the Adam Smith Institute (and one of our Advisers), and Stian Westlake, former adviser to three science ministers and co-author of Capitalism Without Capital. Though written with the Conservative Party in mind, the ideas could just as easily be picked up by any of the major parties.

Sam and Stian set out a set of policies in four areas where they think progress can be made: tax, housing, infrastructure and devolution, and innovation and technology.

All these areas impact entrepreneurship: whether in badly designed taxes disincentivising investment; damaging regulations pushing up the costs for entrepreneurs and their employees; poor infrastructure stimiying growth; or mistargeted funding and regulations limiting innovation.

Some of the ideas might seem quite niche – such as creating a new cross-sector sandbox authority – but taken together they could be the skeleton of an economic agenda that would be transformative.

As the paper concludes: "Conservatives would do well to remember the distinction that Margaret Thatcher made between policies that are popular in themselves, and policies that have popular results. The political benefits of the former are immediate, but often short-lived. But it is policies with popular results that change a country for the better, and which underpin long-term political success. An understanding of what is going on with the economy and how public policy can make it work better for the country is crucial for coming up with these policies."

Whatever you think of Thatcher – or Blair, Attlee, Churchill or Lloyd George, for that matter – this distinction is the mark of proper leadership.

Bittersweet Movements
Jo Johnson's resignation was bittersweet: it was heartening to see a principled politician putting the national interest ahead of their personal ambitions, but a huge pity that another of the country's most capable politicians has stepped away from public service.

Johnson wrote the foreword for our immigrant founders report (which incidentally was just featured in this Guardian article). We asked him to get involved because like us he believes in bringing back the Post-Study Work visa, which would mean holding onto more of the best and brightest international students. Not only did he read our draft report at length, he also offered valuable insights on the report's policy asks. There are too few policy experts across the House of Common – if MPs like Jo Johnson, David Gauke and Sam Gyimah aren't MPs in Parliament after the next election, we will all be poorer – both metaphorically and literally – for it.

Jog On
As my colleague Annabel Denham explains: "We are just a few weeks from the launch of our new Female Founders Forum report. To jog the memory on how we are trying to shape policy to ensure more women-led businesses can start and scale, look no further than our two previous reports. Untapped Unicornswas one of the first studies to shine a spotlight on the gender funding gap – which is now getting the attention it deserves – and was quoted in the HM Treasury review into female entrepreneurship earlier this year.

Mentoring Matters addressed access to role models and mentors – both deemed vital to ensuring more women start and scale businesses. This year we are turning attention towards leadership – building a culture, managing crises, and when scaling a business."

Find out more about what's going on for female founders here, and sign up for the quarterly email here.

Read the whole e-bulletin here, and sign up to receive more here.

Female Founders Forum: Future Leaders

A week is a long time in politics and this one will surely pass more slowly than most. My hope is that the Female Founders Forum quarterly newsletter can offer a welcome respite and encouragement on the state of (female) entrepreneurship here in Britain.

We are just a few weeks from the launch of our new Female Founders Forum report. To jog the memory on how we are trying to shape policy to ensure more women-led businesses can start and scale, look no further than our two previous reports. Untapped Unicorns was one of the first studies to shine a spotlight on the gender funding gap – which is now getting the attention it deserves – and was quoted in the HM Treasury review into female entrepreneurship earlier this year. Mentoring Matters addressed access to role models and mentors – both deemed vital to ensuring more women start and scale businesses. This year we are turning attention towards leadership – building a culture, managing crises, and when scaling a business.

Our most exciting news from the last few months is the addition of fantastic new members to the FFF.

– Mums in Technology Founder June Angelides is one of the most influential women in tech. She is chair of The Future Skills Programme, a founding Ambassador of the FiftyFiftyPledge, and a VC at Samos Investments.
– Tania Boler, co-founder of Elvie, is restoring pelvic floors and giving women the confidence to pump in public. Any concerns femtech founders may have that VCs won’t invest in female-focused firms can look no further for inspiration.
– Erika Brodnock is founder of Karisma Kidz, multi-award winning entrepreneur, Sky News parenting expert and NED at Fundamentally Children.
– Alex Daly is on the coalface, leading the industry taskforce charged with implementing the Rose Review, mentoring five other women, sitting on the APPG for Women and Enterprise, all while running AA Advisors.
– Julia Elliott Brown is taking a practical approach to ensuring women-led businesses get the finance they need to scale with her second business, Enter The Arena.
– Annabel Karmel is helping mothers across the nation nourish their children with her extensive range of cookbooks, foods and recipes. 
– Mumsnet founder Justine Roberts CBE surely needs no introduction.

Since our last email, we have also held roundtables across the country, written articles for national media, and banged the drum for female entrepreneurship at external events. Here’s what you may have missed.

May. The ONS released figures showing that the UK has more women in work than ever before. Now 71% of women are in work, compared to 65% in 2010 (though part of the leap can be accounted for by changes in the women’s pension age). 

June. Japan’s Labour minister was widely ridiculed for declaring that it is “necessary and reasonable” that women wear heels in the workplace. In Switzerland, thousands of women protested against the slow pace of correcting inequalities between the sexes. More positively, here in the UK it was found that more women than ever are at the top of UK companies. Statistics released by the government commissioned Hampton-Alexander review found that as of 1st June, 32.1% of FTSE100 board positions were held by women. 

July. We held three roundtables centred around gender-specific issues in entrepreneurship. Our Female Founders Forum roundtable in Edinburgh addressed leadership challenges. A roundtable with Virginie Charles-Dear addressed the funding gap. (Charles-Dear is founder of toucanBox, one of the UK’s top 100 fastest-growing businesses.) And, we held an event in Parliament with the Rail Delivery Group to discuss rail fare reform, that would reduce exorbitant rail fares for female founders working flexibly. Baroness Kramer, member of the APPG for Entrepreneurship, was keynote speaker, and I wrote about the gender commuting gap for the Telegraph. If you would like to get involved in the campaign for fair fares, do get in touch.

The month also saw a seismic shift in interest in women’s football. A record billion viewers tuned in, suggesting the gender imbalance can still be redressed. With the sponsorship received and increasing fan numbers, the Barclays FA Women’s Super League is set for a big year. 

August. The Entrepreneurs Network released Future Founders: Understanding the Next Generation Entrepreneurs, which found that while 57% of young people cannot name an entrepreneur who inspires them, 85% of those who can list a man. The most commonly-named female founder was Kylie Jenner. While her success in a competitive industry is commendable, I wrote for the Telegraph that we need more diverse role models to inspire the next generation. We found that while Generation Z men and women have thought about starting businesses at similar rates, men are almost twice as likely to have started one (11% to 6%). 

And the release of GCSE results was cause for celebration. Not only did over 800 students receive 9s across the board, but the data show that boys and girls are shunning subjects traditionally associated with their gender. There was a 14% increase in the number of girls studying computing, and they are performing better in STEM subjects than historically. The number of female students taking A-level exams in sciences overtook males for the first time ever this year.

Subscribe to the Female Founders e-bulletin here.

Facebook, Scurvy & Female Brains

7 Things Netflix’s ‘The Great Hack’ Gets Wrong About the Facebook, by Alec Stapp

Suggested by Philip Salter, Founder, The Entrepreneurs Network

Cambridge Analytica's overblown marketing claims have been co-opted by its critics to overstate the company's influence. Although Netflix's The Great Hack tells a compelling story, it's not a true story. The film wildly overstates the significance of the scandal in both the 2016 US presidential election and the 2016 UK referendum on leaving the EU.

Targeted campaigns based on personality type don't seem to work (Cambridge Analytica didn't even have the data to do this properly) – if they did Ted Cruz would be President – and as yet there is no evidence that Facebook data were used in the Brexit referendum. "The truth is much more mundane: the Facebook-Cambridge Analytica data scandal was neither a 'hack' nor was it 'great' in historical importance," explains Alec Stapp. If we want to understand Trump and Brexit, we'll need to dig a little deeper than Netflix.

Scott and Scurvy, IdleWords.com

Suggested by Sam Dumitriu, Research Director, The Entrepreneurs Network

Scurvy is a deeply unpleasant and potentially fatal disease. The good news is that it’s cure is simple: restore Vitamin C to the diet. In 1749, Scottish Physician James Lind proved in medical experiments that eating citrus fruits could halt and reverse the condition. By the 19th Century it gave the British navy a massive strategic advantage. Yet by the second half of the 19th Century the cure was lost. As blogger Maciej Cegłowski puts it: “The story of how this happened is a striking demonstration of the problem of induction, and how progress in one field of study can lead to unintended steps backward in another.”

There’s a positive message too: “One of the simplest of diseases managed to utterly confound us for so long, at the cost of millions of lives, even after we had stumbled across an unequivocal cure. It makes you wonder how many incurable ailments of the modern world—depression, autism, hypertension, obesity—will turn out to have equally simple solutions, once we are able to see them in the correct light.”

The Truth About the Female Brain, by Saloni Dattani, UnHerd

Suggested by Annabel Denham, Associate Director and Head of the Female Founders Forum, The Entrepreneurs Network

If it's the truth we want, intellectual debates must take place in public and conducted in good faith. Just consider the tortured nature/nurture debate. Psychiatric geneticist Saloni Dattani has written a sharp critique of Gina Rippon’s book The Gendered Brain, arguing Rippon cherrypicks evidence to bolster her argument.

Rippon’s conclusions are borderline contradictory: she concurs that the brain "may start out on a fairly standard trajectory but can then be diverted by quite small shifts” due to “different events or experiences”. But Rippon also makes “wild leaps in reasoning and frequent insinuations that when sex differences are not apparent at birth, they cannot be innate”. This includes a difference in the behaviours of 13-18 week old babies vs newborns. Saloni expands on these thoughts in a podcast for Rationally Speaking.

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Couped Up

While not quite the coup some people claim, prorogation is certainly a tactic to stop Parliament ruling out a no-deal Brexit. Parliamentarians in opposition to no-deal still think it can be thwarted, although if it's true that Number 10 is considering wacky measures such as creating new bank holidays, in a matter of weeks we may be close to something more like a constitutional crisis.

Boris Johnson is taking a huge gamble. Though he's the one rolling the dice the man trying to load them is the Rasputin-like figure of Dominic Cummings. If you only read one thing about him, make it this article by Tom Chivers. In essence, Chivers thinks Cummings is aping something akin to Nixon's Madman Theory of international relations in the hope that being seen as uncompromising and erratic forces your opponent to compromise.

Chivers explains that this approach is only credibly when both sides have a lot to lose (like the US and Soviet Union). In the case of Brexit: "There are worse outcomes for the EU, such as other countries seeing that they blinked first and trying similar strategies to get favourable deals from them. It may be that no-deal is the least bad option available for them if Britain commits to it."

The worry is that "Cummings isn’t playing some clever John von Neumannesquegame, but driving his Fiat down the rails and expecting a train to swerve."

Public Knowledge
PUBLIC is a great organisation that helps startups solve public problems, and it has a report out on how new technologies will shape the future of the UK's geospatial sector. The Future Technologies Review will be of interest to anyone in technologies such as artificial intelligence, drones and Internet of Things.

TMI!
One of the main reasons I love my job is that I get to meet some really smart people. Whether it's my colleagues, entrepreneurs, academics, experts, or even the odd politician, a lot of my life involves learning from people who are the best in the world at what they do.

But like everyone, I suffer from too much information, which is why I rely on a network of brilliant people to point me in the right direction. This e-bulletin is an attempt to distill some of this information.

However, I think we are missing a trick. That's why we are starting another e-bulletin that will simply consist of three brilliant people giving you a paragraph telling you the best thing that they've recently read and why. The contributors will rotate every week and the subject matter will broadly focus on entrepreneurship, innovation and ground-breaking ideas across all the sciences. I hope some of you will want to contribute.

It's an experiment – even its name is a work in progress. Sign up to our Innovation Update – the pithy Tuesday update from three smart people about what you should be reading – here. 

This will be our fifth e-bulletin (thankfully they don't all go every week!). The other e-bulletins we have are:

• Policy Updates – An ad hoc update of policy changes that will impact you business –Sign Up Here

• APPG for Entrepreneurship Digest – A monthly roundup of Parliamentary debate and activities related to entrepreneurship (only sent when Parliament is sitting) Sign Up Here

• Female Founders Forum – A quarterly update about what's going on for Female Founders – Sign Up Here

Part of the reason for producing so many e-bulletins is to save you time. If you're mostly interested in how policy changes will impact your business on a very practical basis, subscribe to the Policy Updates and unsubscribe from everything else. However, if politics is your gig, the APPG Digest might be the most relevant.

Read the full e-bulletin here, and subscribe here.

Touch BEIS

Every week I get detailed emails from the Department of Business, Energy and Industrial Strategy (BEIS) setting out their planning around a No Deal Brexit. It doesn't make for fun reading. If any of you voted to leave for less regulation, I'm afraid I might have some bad news for you.

Anyway, in not entirely unrelated news, here's one thing that BEIS is asking businesses that only trade with the EU to do in preparation for a No Deal exit:

• Apply for an EORI number if you're not VAT registered. You need this to move goods into or out of the EU (including the UK). If you do not get one, you may have increased costs and delays. HMRC has very sensibly decided to automatically give all VAT-registered firms an EORI number in the next two weeks.

• Consider registering for TSP. Transitional Simplified Procedures will make importing goods easier for the initial period after the UK leaves the EU. Traders registered for TSP will not need to make full customs declarations at the border and will be able to defer paying their customs duties.

• Confirm you can complete each data field in the Declaration.

• Agree responsibilities with your customs agent and logistics provider for each part of the process and update your contracts to reflect this.

• Identify software for submitting documents, if you do not use a customs agent.

It's impossible to pass on the way a No Deal Brexit could impact each and every area of your business. However, if you have any burning questions about the impact of a No Deal Brexit – whether that's tariffs, visas, intellectual property, or whatever – let me know, and I'll ask some experts on your behalf. I may post some of these anonymously next week. 

Of course, we still might not get a No Deal Brexit – but that's complicated.

Loose Movement
One thing that will be concerning for many is the Home Secretary's promise to end Free Movement if we leave without a deal. However, as Jonathan Portes, Sunder Katwala and Joe Owens all explain, this promise is either meaningless or unachievable. It doesn't make the announcement any less concerning, so back in the real world we are hosting a roundtable with Kingsley Napley on Thursday that may help you clear up some of the uncertainties for you and your employees (see below).

Channel 4 You
Would you be happy to go on Channel 4 to talk about your business spending dilemmas in exchange for free financial advice? I can't think of anything worse, but I suppose it might be useful and could help promote you and your business. Contact Firecracker Films at money@firecrackerfilms.com or on 07494 405759) if you want to find out more.

Read the whole e-bulletin here, and subscribe here.

Findings Nima

On Wednesday, NatWest's Accelerator hosted us and the prolific author Nima Sanandaji for an event on Brain Business Jobs – that is, the jobs in sectors with a high proportion of knowledge-intensive occupations.

Nima has measured this across 31 countries and 278 regions. He finds that 8% of the UK working age population are employed in knowledge-intensive sectors, which put us highest among large European economies, but lower than Switzerland, Sweden, Denmark, Netherlands and Luxembourg.

In terms of intensity, the leading regions of the UK are Berkshire, Buckinghamshire and Oxfordshire (17.9%), London (17.3%), North Eastern Scotland (11.3%), while the lowest are Cornwall and Isles of Scilly (3.4%), East Anglia (3.2%) and West Wales and The Valleys (3.2%).

This is a good news story for innovation and entrepreneurship in the UK. So what's driving these knowledge-intense jobs? Nima finds that innovation capacity is the dominant determinant for their concentration. Innovative capacity is the ability of a country to produce and commercialise a flow of innovative technology. Clearly there's a lot that goes into this – perhaps most critically R&D spending, the intellectual property regime, and the education system. There's room for improvement, but we shouldn't forget to celebrate our successes.

We're working with Nima to drill down further into his dataset. If this is the sort report you would be keen to support or get involved with, just let me know.

Bright Future
It's a sign of the times when an Instagram influencer's story leads to more people seeing your report than an article in national paper. But whether you heard about our Future Founders report as one of Grace Beverley's 1 million followers, or Octopus Group's Simon Rogerson's article in City AM, or via the excellent James Hurley in The Times (paywall), or on the Financial Times's Sifted site, or the 101 other places it appeared, we hope you enjoyed our report that we undertook with Octopus Group on the entrepreneurial ambitions of young people. If somehow you missed it, here it is.

Total Package
Nesta has a new study out on the incentives for FTSE 350 executives. It suggests that remuneration packages are dominated by measures that inhibit corporate innovation.

It finds that just 16% of total FTSE 350 annual bonus conditions encourage spending on innovation compared to 39% that discourage it. The report recommends that companies examine their remuneration packages to encourage the pursuit of innovation and long-term value creation. While investors are encouraged to use their power to demand better incentives for investment in innovation.

The takeaway question for a business owner of any size is: how do you incentivise innovation?

Party Time
As part of the Female Founder Forum project we run with Barclays, we will be in Brighton at the Labour Party Conference on 23rd September, and in Manchester for the Conservative Party Conference on 30th September. Don't worry if you don't have a conference pass – we are hosting our events outside the secure zones.

Watch this space, or drop us an email to register your interest. Also, please forward this on to anyone who lives in or near either city who might want an invite.

Read the whole e-bulletin here, and sign up here.

#FutureFounders

Today we've released an important report uncovering the entrepreneurial ambitions of Britain's next generation.

Authored by Sam Dumitriu, in partnership with Octopus Group, and based on a survey of 1,549 young people, Future Founders: Understanding the Next Generation of Entrepreneurs reveals that 51% of British young people aged 14-25 have thought about starting (or have already started) a business. A further third (35%) are open to the idea and just 15% rule it out altogether.

(If you're in a rush we have a Twitter thread here with some of the main findings).

The main barrier to starting a business was “not knowing where to start” (70%). Just two in five (38%) 14-25 year olds say that their education has given them the skills they need to start a business, compared to a quarter (26%) who say it has not. Half of respondents currently studying at university (51%) or currently studying business (55%) say that their education has given them the skills they need to start up – significantly more likely than non-university graduates, or those studying other subjects. However, this falls to 39% when students graduate, suggesting that some knowledge isn’t transferring from the classroom to the real world.

Women make up just a fifth of UK entrepreneurs, and the survey suggests a lack of role models could also present a significant barrier. 57% of young people could not name an entrepreneur who inspires them. Of those that could, 7.9% named Lord Sugar, 6.5% said Richard Branson, and 2.6% named Elon Musk. Kylie Jenner was the most commonly named female entrepreneur (just 1.1%). Further – half of young men could name an entrepreneur who inspires them, but only a third (35%) of women could do the same. Of the entrepreneurs who were named, 85% were male.

Past research shows that role models have a greater impact when they are relatable. Closing the gender gap and drawing on a wider range of entrepreneurial talent will require us to champion a more diverse range of entrepreneurs.

But we may also need to change attitudes towards failure if young women – and men – are to create the firms of the future. According to our report, 71% of women and 63% of men cite fear of failure as a barrier to starting up a business.

It has already got a fair amount of press coverage:

FT Sifted
"A member of Gen Z, Jack Cornes started his first business at age eight, selling vegetables from his grandmother’s garden. By the time he was 14 he had founded an online t-shirt business that was shipping to the US and Australia. Now, age 21, he has just raised £210,000 for his six-person startup HausBots, which makes climbing robots that automate the painting of walls..." Read Maija Palmer's whole article here.

The Times
"Young men are almost twice as likely as young women to have started a business, despite similar levels of desire to do so, according to research that highlights barriers to entrepreneurship..." Read James Hurley's whole article here.

City A.M.
"Every entrepreneur has a story of past failure that they’re not afraid to share. I’m no exception. Back in 2010, when Octopus began investing in film production companies, we turned down the opportunity to invest in a small British film called The King’s Speech, which went on to gross £250m worldwide and win four Oscars. Instead, we invested in Burke & Hare, an “edgy” horror-comedy that lost money at the box office and was labelled “unpleasant drivel” by Hollywood Reporter..." Read Simon Rogerson's whole article here.

#FutureFounders
It would be amazing if you could share any thoughts you have about the report with the hashtag #FutureFounders. On Twitter (@tenthinktank & @OisforOctopus), Facebook, LinkedIn and Instagram.

Read the whole e-bulletin here, and the sign up here.