Grey Matters

Over the years we have focused a lot on the next generation of entrepreneurs, but up until now we’ve been missing a trick. There is a wealth of entrepreneurial talent latent among the UK’s older people that is being left untapped. That’s why our latest Access All Areas report with Enterprise Nation focuses on ‘older workers’.
 
As the Chancellor said earlier this year: “No country can thrive if it turns its back on such a wealth of talent and ability. But for too many, turning 50 is a moment of anxiety about the cliff edge of retirement rather than a moment of anticipation about another two decades of fulfilment.”
 
The number of people aged 50 to 64 who are economically inactive grew from 3,267,000 in the first quarter of 2020 to 3,556,000 in the first quarter of 2023. That’s an increase of 289,000, or roughly equivalent to the entire population of the city of Milton Keynes.
 
We live in a free society (well, sort of), so if someone has the money to retire to play tiddlywinks every day there is nothing to be done; and we live in a charitable society (well, sort of), so we should look after those who are too ill to work. However, there are plenty of over 50s who would like to return to the workforce.
 
People like Cambridgeshire-based Chris Dunn, who set up his consulting business the day after his 50th birthday in 2014 following years of working in senior commercial roles across UK manufacturing and technology industries. “There are thousands of over 50s just like me who are not ready to retire but instead are actively supporting the next generation of business leaders by sharing their knowledge, skills, and experience in a variety of different ways,” he says.

The report has recommendations for government, business and older people. We think the government needs to improve support for older people who want to get back into work or self-employment and further reform childcare regulations to free up older people who are acting as carers. We think businesses should tackle ageism in the workplace and during hiring processes and consider allowing more flexible working arrangements for the people who need them. And we think older workers should consider entrepreneurship as an opportunity.

Compared to whippersnappers, older people can make great entrepreneurs because they have a wealth of experience, general skills, industry-specific knowledge, and strong networks. Little wonder then, that the average age of a successful startup founder is 45.

We often hear that it is ‘never too late’, but Henry Oliver is writing a book on late bloomers, or opsimaths, to show it to be true:

“Once you start looking, these people are everywhere. Siphiwe Baleka nearly became an Olympic swimmer aged fifty. He was denied the chance because of a technicality. Rani Hamid started playing chess aged thirty-four and became Bangladesh’s first International Woman Master. Frank Lloyd Wright did more than half his life’s work after the age of sixty-eight. Barry Diller didn’t work independently for the first thirty years of his career: then he took over QVC and became a phenomenal success. The philosopher Mary Midgley wrote her first book aged fifty-nine, saying, ‘I didn’t know what I thought until then.’”

As Emma Jones CBE concludes in her foreword: “Let’s capitalise on this moment and unleash the knowledge and productivity of these individuals back into the economy.”

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Port in a Storm

Despite the Government doling out £500m to fund the installation of new electric arc furnaces at Port Talbot, 3,000 job losses are expected at the Welsh steelworks. This follows news earlier in the week that the unemployment rate in the May-to-July period was up to 4.3% for the first time in nearly two years. 

There may be trouble ahead. As the Institute for Fiscal Studies has shown using OBR projections of public spending up to 2070, health, social care, and pensioner benefits are going to push public spending off the chart – look at the so-called ‘graph of doom’, if you dare – while we suffer the stagnating effects of an ageing population. Short of another Baby Boom (and a time machine as a lot of this is now inevitable) or mass immigration, there’s only one solution: increasing productivity.

“Enter stage right”: entrepreneurs and innovators.

This week ARIA has announced its Programme Directors, who are hoping to answer some mind-bending Ted Chiang-like questions, such as: Can we create edible vaccines made by plants? What if all diagnostic tests could be done directly in the GP office within the initial appointment? Can we develop the capability to control the weather and climate on a regional and global basis, to mitigate or obviate hurricanes, droughts, floods and heatwaves? How complex could a robot be and still biodegrade completely into non-toxic components?

The future is potentially incredible, but it will also be incredibly disruptive. And not just for people working in steelworks. Goldman Sachs predicts artificial intelligence could replace 46% of administrative positions, 44% of legal positions, and 37% of engineering jobs – and while new jobs will be created, this won’t be an easy task for governments to cope with (there aren’t that many pots of £500m to go round). 

We know how to mitigate a lot of the headwinds (or know someone who does). Perhaps you do too. If so, our friends at TxP have a new £5000 blog prize, in partnership with Civic Future and New Statesman Spotlight for young(ish) people to share their ideas on how to bring about a golden age. Good luck! We’ll need it.

Disability & Entrepreneurship
Off the back of their excellent survey-led report, our friends at Small Business Britain are determined to take forward practical and policy support for founders with a disability. This may include policy work, mentoring, peer-to-peer support, access to experts, and much else besides. If you want to find out more, get in touch with them.

One question that I’m pondering is the role of technology – something I'm chatting to Martyn Sibley about. He is the co-founder and CEO of Purple Goat and “a regular guy who happens to have a disability called Spinal Muscular Atrophy (SMA).” 

Jacques Carolan at ARIA will be looking at: “What new technologies would enable high-bandwidth brain-machine interfaces for speech or motor control, so people living with disabilities could use the devices in their own homes?” But it strikes me that there must be other great work being undertaken, with potentially huge spillovers, even beyond those with disabilities. Or if there isn’t, why not? Get in touch if this is your area of expertise. We are keen to learn more.

Be the Change
We’re busy writing our latest Female Founders Forum paper, which we run with Barclays. It’s our longest-running project and could easily be a think tank in its own right. If you’re a female founder who has an opinion on any of the following questions, please share your thoughts with the author.

  • Are there any obstacles you encountered at the beginning of your career as a founder which continue to present challenges, either for you or for other female founders you know?

  • The past few years have brought so much change – giving rise to new industries, shifting more work remotely, presenting new tools and technologies to change how we work. How have female entrepreneurs been impacted by and responded to these changes?

  • Where do you believe there is still great progress to be made? What would you hope to see change in the next five years?

  • Are there any issues not being talked about enough when it comes to discussing barriers to female entrepreneurship? What areas need more focus?

While I can’t guarantee they will all make it into the final report, they’ll definitely help inform our thinking and we’ll make sure you’re invited to the House of Lords launch

Mad Skills 
Seema Malhotra MP has been handed the Shadow Skills brief. Seema is chair of the All-Party Parliamentary Group (APPG) for Entrepreneurship, which we are the Secretariat of. In his monthly newsletter, Eamonn Ives, our head of research, updated on some of our relevant research on this topic – both for Seema, as well as her counterpart across the aisle, the Rt Hon Robert Halfon MP. 

If you don’t get it, you can sign up for the APPG newsletter here.

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Passport to Progress

If you were at the House of Lords on Wednesday for the launch of Passport to Progress: A Blueprint for the World’s Most Pro-Innovation Visa System, I hope you’ll forgive me for banging on again about it. We can only fit a few hundred people on the Cholmondeley Terrace, but we have a network of thousands to update.

This is our second report on immigration reform in as many weeks. While Job Creators 2023 was a shorter UK founder focused briefing paper, in Passport to Progress Derin Koçer takes a broader approach, analysing international visa frameworks to make a series of recommendations for improving migration systems worldwide.

Give it a read to find out how Canada is realising the benefits of positioning international graduates as the future of its workforce; Ireland’s Critical Skills Employment Permit allows Irish firms to attract talent; Israel’s Innovation Labs programmes provide migrant entrepreneurs with access to critical technological infrastructure; and New Zealand’s Global Impact Visa creates training, investment and networking opportunities for migrant entrepreneurs.

As Derin said at the launch, “the talent race is more fierce than ever. Countries aren’t only competing with rivals but also allies.” It’s all to the good though, as it's a battle that unlocks the talent of individuals, driving forward human progress. As Rob May, CEO of ABE Global said at the launch:

“Although humanity is locked in almost 200 distinct countries and economies, human societies have always interacted intensely, as ideas, talent, and enterprise flow to where they can have the most impact. At the same time, we recognise that immigration is a divisive subject, but the whole topic of talent migration is in danger of drifting into the wrong lane. This report, Passport to Progress, grabs the steering wheel and brings us back to a reasoned debate on the way forward. It provides powerful evidence; a comparative analysis of visa policy interventions that are working successfully, around the world, and it offers clear advice for changemakers on what we are doing well and what we could do better.”

It would be great if you could share our report far and wide (if it’s on social media use the hashtag #Passport2Progress so we can like and reshare it). If you missed the launch and don’t want to miss another, it's time to join us.

Taxing Times
We’re working with Enterprise Nation on a paper on tax simplification. We agree with HMRC’s now redundant tagline that ‘tax needn't be taxing’. If you do too, you can help us by filling in Enterprise Nation’s short survey. And if you’re a tax expert who wants to feed into the report, book 15 minutes in my diary next week to share your insights.

When You’re 64
Age isn’t just a number. We’re busy writing a paper on the untapped potential that older people can bring to the UK – as both entrepreneurs and employees. We are looking for case studies of founders. If you started your first business after the age of 50, get in touch.

Checking it Twice
Labour has been reshuffling. Perhaps most relevant for entrepreneurs is Peter Kyle becoming Secretary of State for Science, Innovation and Technology, but there are some interesting changes happening off the shadow front bench too.

With MPs back in Westminster, we’re busy planning events with politicians of all stripes, including the recently shuffled. If there is an MP who you think needs to hear from our entrepreneurs let our Head of Partnerships, Katrina Sale, know. We’ve got a very long list of our own, but we’re always open to your insights.

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Immigration is A Story About Opportunities

We launched Passport to Progress, our attempt at sketching out the world’s most pro-innovation visa system, in partnership with ABE Global, an education non-profit, with an event in the House of Lords on 6 September 2023.

As the author of the report, I delivered the following remarks hoping to summarise the report while tying it with my experience of immigration:

Our recent report, Passport to Progress, is a special thing for me. Not only because it’s my first solo project for The Entrepreneurs Network or because I met so many cool people thanks to it.

But because I’m an immigrant myself.

Don’t get me wrong, I am not saying this as a clingy cliche as if I’m talking to Oprah. Since the UK is one of the most welcoming countries there is, if not the most, my story of migration is nothing dramatic. Well, this might be me getting used to the British culture of taking nothing too seriously. I can’t be sure.

This project became special when I was in the middle of it. Because, conveniently, my residence permit expired. With my dad, I had to make a joint application to renew it. Gathering thousands of pages of documents, including tax records, criminal records showing that we have been only victims of phone thief, and a billion other things that the Government already has.

When we went to the application centre, we had to wait in a room for an hour, which was followed by a self-check-in in which a computer took pictures of us and our passports to prove that we were really us.

And then this was followed by an actual person checking us in – after another hour of waiting – taking our pictures, and pictures of our passports. Stuff we have already done. Why, you might ask. Because, apparently, we were smiling at the pictures we took at self-check-in!

If this report can contribute to no one else getting pictured for the second time because they were happy in the first one, I will count it as a success! That’s why it’s so special…

I don’t want to go through the whole report here and turn this into a lecture. So let me summarise the story in four principles only. Four principles that I argue policymakers should follow to design immigration systems fit for this age.

The first one, competitiveness.

The transformation of the economy, the rise of big cities and the service sector, and the change this triggered in the world of work made talent more valuable than ever. Professions like artificial intelligence developers or deep tech researchers weren’t familiar to anyone just a decade ago. Normal professionals of today like software engineers were seen as superhero-like individuals early in my lifetime, which was just a couple of years ago.

However, interestingly enough, many developments that came with these, from the accessibility of education to self-learning capabilities, also made skills and talent spread all over the world.

Talented people are now sought after by every country that wants to innovate and grow.

This means that the talent race is more fierce than ever. Countries aren’t only competing with rivals but also allies. Canada has been offering easy visa options to skilled foreign workers in the US, advertising them in Silicon Valley.

It’s not a coincidence. Economic growth in many Western countries has been exceptionally slow since 2008; almost stagnating in the UK. This also coincided with a time when innovation became something we talked more about but practised less. To innovate, countries need potential innovators – and they are racing to get them.

In this environment, offering a few visa schemes cannot put countries ahead of the game; that’s only the starting point. That’s why investing in further capabilities – such as easing access to capital or technological infrastructure and easier routes to permanent residency – will differentiate some countries from others. For instance, Israel has been offering lab spaces to entrepreneur migrants meanwhile New Zealand provides them direct connection to local investors.

Competition by nature requires moving things further. The more creative the offer, the better for the country.

Secondly, proactivity.

Until now, migration policies have been based on building visa schemes to simply let people arrive. In this competitive environment, governments should be going to the builders first – let them be entrepreneurs or STEM researchers – rather than waiting for them to come.

That’s why building bureaucratic capabilities to recognise and recruit international talent will be essential going forward.

This is actually nothing new. The US actively recruited engineers and scientists from Europe after the Second World War with Operation Paperclip. Some of them went on to lead America’s space program. There is no reason for policymakers not to actively look out for STEM talent, chipmakers, AI researchers or other individuals with strategic skills and offer them easy migration paths.

Thirdly, flexibility.

Static migration schemes of the past restricted skilled workers to their employers by linking their visas directly to them. This restrains talented people’s career prospects.

Standard procedures such as migration caps and sponsorship requirements disincentivise employers to hire entrepreneurial talent, make emigration harder for entrepreneurial individuals and work against innovative startups and scaleups.

Most of the talent countries need are actually already within them. They come as students. They come as professionals. But, for instance, the UK lost 83% of students who graduated in 2016 five years after their schools ended. Only 5% of them have workers' visas today. When it comes to professionals, they arrive here to work for big firms and their visa schemes don’t allow them to establish something of their own.

The lack of flexibility is the main reason why these talented individuals are underutilised. That’s why we propose that international graduates – at least of top schools – shouldn’t require sponsorships to work in the UK and they should be given an easy path to permanent residency. To be even more compelling, why not give permanent residencies to advanced STEM Master’s graduates or PhD students? For professionals, their visas should be flexible enough for them to work at startups or establish one of their own.

To achieve bold aims, like becoming a science superpower, the UK should match bold rhetoric with bold policies. Otherwise, they’ll stay as aims.

Lastly, holism.

This connects all the other dots.

Even though tailored visa policies for entrepreneurs or students can attract talented individuals, policymakers should see migration from a holistic perspective.

In the end, migrants’ journeys evolve over time: students turn into STEM researchers, STEM professionals turn their research into companies and high-skilled professionals build innovative businesses. Innovation does not come from a single source and nobody should expect it to.

That’s why the world’s most pro-innovation visa system isn’t the one attracting any of the mentioned sub-groups of immigrants – it’s the one giving opportunities to all of them.

Let me go back to my own story to tie things up.

Being an immigrant in this country is truly great. The most discriminative comment I received from anybody is that I don’t look Turkish. Which, objectively, is a statement of fact not discrimination.

And here I am, speaking at the Mother of all Parliaments about the policies my host country should implement to welcome more people like me. I really can’t complain.

Immigration is a story about opportunities.

We need more of those stories and Passport to Progress is our contribution to how.

A Sensible Conversation on Immigration and Innovation

We launched our international report on high-skilled immigration, Passport to Progress, in partnership with ABE Global, an education non-profit, with an event in the House of Lords on 6 September 2023.

ABE’s CEO Rob May delivered the following remarks at the launch:

Back in 1973, business leaders from the Ford Motor Company, Unilever, and Macmillan Publishing called a meeting with a group of senior academics to lament the fact that there was very little in the way of practical training in international business skills, for the managers dispersed across their far-flung global operations. Out of that meeting, ABE was created, and in the 50 years since, we have been guided by a simple idea; that the transference of skills and ideas across borders is the key to productivity and prosperity.

We delivered our first courses in London, Hong Kong, and Singapore, and then we set our sights on the profound challenge of stimulating a ‘great circulation’ of talent. We focused on exporting standards and qualifications to the emerging economies of the global south. Through the power of education, we have worked to develop a global community of practice in which business methods at all levels are consistent, reliable, ethical, and conducive to how we do business. This has enabled people across the world to enjoy access to inclusive economic opportunity, we know this because as ABE expanded its operations across four continents, we have been delighted and honoured to support hundreds of thousands of personal journeys. These journeys have enriched the lives not just of individuals, but of whole communities, and in turn, inspired further opportunities for invention and innovation.

So, you could say that talent mobility has been our concern and our passion for five decades.

Therefore, we feel bound to respond when we notice a worrying trend; the ramping-up of anti-immigration attitudes, provocative and polarising rhetoric, and restrictive policies, leading to fewer bright and talented individuals thinking about coming to Britain to start a business. 

By definition, immigrants bring diverse experiences and perspectives to our companies, surely an advantage in our global marketplace. They can also expand economic horizons by strengthening commercial ties between their host country and their homelands. But above all else, faced with a burning platform of economic stagnation, ecosystem damage, public health crises and technological disruption, there is an urgent imperative to foster better international, and multi-cultural, integration, if we are to confront these challenges successfully.

Although humanity is locked in almost 200 distinct countries and economies, human societies have always interacted intensely, as ideas, talent, and enterprise flow to where they can have the most impact. At the same time, we recognise that immigration is a divisive subject, but the whole topic of talent migration is in danger of drifting into the wrong lane. This report, Passport to Progress, grabs the steering wheel and brings us back to a reasoned debate on the way forward. It provides powerful evidence; a comparative analysis of visa policy interventions that are working successfully, around the world, and it offers clear advice for changemakers on what we are doing well and what we could do better.

I encourage everyone to read this report, embrace its recommendations, and share these ideas widely. I hope that we can come together to create a firebreak against the creeping entanglement of migratory issues, and in turn, unlock a sensible conversation on the vital link between immigration and innovation. 

Disrupting Class

Twitter – or X, if you must – can be brutal. It’s one reason most entrepreneurs use it sparingly. That, and the fact they’re too busy building a business. (Whatever you think of Elon Musk, his ability to post cringe while running half a dozen world-leading companies defies logic.)

Think tankers have to get used to the brutality of Twitter. Sebastian Payne, director of the centre-right Onward, got ratioed yesterday, after tweeting (no way is it Xing): “We have a major crisis among Britain’s young generation: they’re unhappy, unskilled and unmoored. It’s time to look at what a new Great British National Service would look like to reengage them with society.”

I was ready to dust off Milton Friedman’s destruction of Congressman McCloskey, before realising that he is just calling for more opportunities to volunteer, rather than forced labour. As Onward's polling makes clear, the majority of people oppose a mandatory scheme, including nearly two-thirds of young people. However, Onward is calling for young people to be auto-enrolled unless they opt out, which is a bit of bureaucracy we don’t need.

To the extent that Payne is right that Britain's young people are particularly “unhappy, unskilled and unmoored” than previous generations – evidence not cited in this report suggests we should at least be selectively concerned – I doubt more government is the answer? Surely the state already has plenty of time to help make young people happy, skilled and moored.

I think the late, great management thinker Clayton Christensen presented a vision of the future that the government realise. Disrupting Class calls for disruptive innovations in the classroom. It argues that a "one-size-fits-all" approach is ineffective and that education should be customised through technology to fit the pace of individual students, helping reduce educational inequality. It would also free up teachers' time to support young people in the way politicians often claim to want.

Entrepreneurs have the technology to deliver this if the government could get its act together. Check out ArborBridge, an online tutoring company co-founded by Tim Urban of Wait But Why fame, or Beauhurst’s list of 25 top edtech companies for innovations happening in the UK.

Over the years we’ve built up a large and growing corpus of work on entrepreneurship and enterprise education. We’re planning a roundtable to discuss what we should do next. If you want to register your interest, get in touch.

Taking Care of Business
We’re hosting a private tour and drinks reception at the Migration Museum in Lewisham for champions of migrant entrepreneurs. Their exhibition, Taking Care of Business, is set to end on 30 September 2023, so this is one of the last chances to see it. It is an immersive exhibition shining a light on the central role that migrant entrepreneurs have played in shaping our lives – and Britain. I hope to see some of you there.


Kir Royale
In other Onward news, they’re joining forces with our friends at the Startup Coalition and Tony Blair Institute on a project supporting policies around AI startups. Kir Nuthi has written about the project here:

“How policymakers harness and guide the development of AI will be key to our success or failure. Government has made a good start – from the entrepreneur Ian Hogarth’s appointment as Chair of the Foundation Models Taskforce, leading research into AI safety – to the UK’s hosting of the Global AI summit this winter. But there’s also been a lot of confusion, noise and chaos that threatens progress. Startups can sense this. And while all work on the big meaty topics – like safety – is welcome, the shared vision for what progress looks like should come from everyone in the market, not just a minority.” If you want to be involved, you can get in touch with Kir here.

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Talent Shows

This week we released Job Creators 2023: The foreign-born founders building our fastest-growing businesses. This may not be news to you. After all, among many other places it was featured in The Times, Sifted, Forbes, City AM, and directly with those in the know. The headline stat is one you’ll hear a lot more of: 39% of the UK’s fastest-growing companies have at least one foreign-born founder.

This is a follow-up to our original Job Creators report, which as I claim in Forbes, helped change the way people thought about immigration. I think reasonable people can disagree about various points around immigration, but our research proves beyond doubt that immigrants are the driving force behind many of the UK’s most innovative companies.

When we last looked at this data back in 2019, that figure was 49%. This raises the reasonable question that John Thornhill asks in Sifted: “Is the UK losing some of its pull for foreign founders?” For me, the answer is both yes and no: ‘yes’ because Brexit has ended free movement, which no visa can trump; ‘yes’ because some EU countries like France and Portugal have improved their offering for entrepreneurs; yet ‘no’ because the data shows that the UK still dwarfs other European countries in key areas like funding; and ‘no’ because the UK has become more open to talent from outside the EU, including through the High Potential Individual (HPI) visa.

At The Entrepreneurs Network we want even more reasons to say ‘no’ to John’s question. And we have ten ideas for doing exactly that. These include expanding the HPI visa and Youth Mobility Scheme, trialling a Global Talent Exam, copying the Canadian policy on H-1B visa holders, reviewing visa fees to ensure they are in line with other countries, and allowing applicants to make use of the fast-track option for free when the Home Office fails to meet its own estimated times for approving applications.

Read our Researcher Derin Koçer to learn more about the eye-watering fees: “Visas can cost nearly three times what they would in Australia, around 12 times in Canada and around 43 times what they would in Germany.” And read our Head of Research Eamonn Ives to know how we can copy Canada: “In July, the Canadian Government offered anyone with a lucrative US H-1B visa, which enables employers to hire foreign workers with specific skills to work in America for a specified period, the chance to apply to come north of the border with an open work permit for up to three years. The number was capped at 10,000 – which was duly filled within just two days of the scheme going live. In this way, Canada received an influx of highly skilled immigrants for virtually no effort at all, simply piggybacking off the bureaucracy of their American cousins.”

Returning to John’s question, if we’re going to be able to answer him properly – to understand if that 10-point drop is a blip or trend – we will need to expand the sample size and do it every year. If you want to partner with us on Job Creators 2024 – or know someone who does – now is the time to get in touch.

The 39%

We couldn’t have produced this report without Beauhurst. That 39% is based on their data, and it was their data that revealed the 49% back in 2019. It was also their data that first revealed the equity funding gap between female and male founders for our Female Founders Forum report, which pre-dated and inspired the Government’s review into female entrepreneurship. That’s why we’ve invited them to partner with us on this newsletter.

Ambassador's Reception

Sticking with the theme of migrants. Ahead of International Migrants Day on 18 December 2023, the charity IMIX and the International Organization of Migration have got in touch to see if migrants from our network might want to become Ambassadors.

Ambassadors will come from different walks of life in order to share stories about the migrant experience in the UK media. The individuals must be interested in learning more about speaking to the media and be happy to be named and pictured. They can be someone who recently moved to the UK or someone who moved decades ago, but who is happy to reflect on their experience over time. Successful applicants will be invited for a two-day residential (expenses paid), receive media and social media training, and feature in a film marking the day.

They would particularly like to highlight the role of people from a migrant background in business, innovation and the economy at large, as well as the additional bureaucratic hurdles they face. If you want to get involved, drop Julia Rampen an email.

You can read the whole newsletter here, and sign up for the newsletter here.

Risk Perceptions

Risk is inherent in entrepreneurship. After all, something like 20% of new businesses fail during the first two years, 45% during the first five years, and 65% during the first 10 years. Only 25% of new businesses make it to 15 years or more.

But while the businesses might no longer exist, many will have created significant value (in every sense of the word) while they were running, many will be acquired and merged giving the founder an exit, and many of the entrepreneurs go onto bigger and better things. And while we often hear about the risk of starting a business, there is also the risk of never trying: never taking a swing.

Contrary to popular belief, research suggests that entrepreneurs are only moderate risk takers – higher than the general population, but no higher than leaders in other fields. They are, however, more tolerant of ambiguity, where outcomes are hard to estimate. Ultimately, entrepreneurs take a personal risk for the same reason investors back them. Both are looking for opportunities where others have mispriced the risk and opportunity, or where only they have the right vision, skills, knowledge and connections to succeed.

We’re working with the law firm Mishcon de Reya on a report on the role of risk in entrepreneurs’ decision-making. We want to know how entrepreneurs think about risk. From this survey we will better understand how starting a business changes founders’ attitude to risks; whether it’s tax uncertainty, cyber-attacks or supply chain disruption which are keeping founders awake at night; the way entrepreneurs access the risk versus reward for AI technology; and even which political party is seen as the riskier choice in the upcoming election.

I know how much everyone hates filling out surveys, but this is a genuine chance to feed into our reports and policymaking. If you’re a startup founder, please support us by filling in our short survey

Exhibiting Greatness
The Business Department on Victoria Street – whether BEIS, BIS, BERR, or even DTI – used to be pretty good at showcasing the best of British innovation. At some point that stopped, and it started to look like any other office.

It’s pleasing to hear that the mantel will be picked up by the Department for Science, Innovation and Technology (DSIT), with plans to showcase innovations as part of the department’s work to champion UK industry and academia. Based in the Admiralty Buildings, each exhibit will be in place for around one month. It’s not quite as ambitious as our plan for a modern day Great Exhibition, but it’s a start.

If you are interested in exhibiting, contact exhibit@dsit.gov.uk for more information.

Taxing Times
After last week’s critique of HMRC, I was planning to take a break from critiquing it. But needs must, as more entrepreneurs and the Chartered Institute of Taxation (CIOT) have been getting in touch about its crackdown on R&D claims.

The CIOT made the case back in July that HMRC is rejecting legitimate claims and stone-walling other genuine claimants with a bureaucratic system driving them to give up on their claims. If you want to get a flavour of what’s going wrong, read their 12-page letter to HMRC’s Director of Wealthy & Mid-sized Business Compliance. For further reading, Lord Leigh and others have raised concerns in Parliament.

It goes without saying that HMRC needs to crack down on genuine cases of fraud, but there are legitimate doubts about the widely reported estimate that the overall level of error and fraud was higher than previously reported. As the ICAEW state: “It has been widely reported that some claimants have decided that the time and costs involved with defending a claim outweigh the benefits. Although these may be entirely justified claims, they will be recorded by HMRC as an error.” For further reading, MSC R&D has some legitimate questions for HMRC.  It’s a huge shame that this attempt to get better data has led to more questions than answers. Get in touch if this is impacting you or businesses you work with.

You can read the whole newsletter here, and sign up for the newsletter here.

The Trial

This week I needed to speak with someone at HMRC about a pretty straightforward business tax issue – or so I thought. Hours passed on the phone. I was transferred more than Trevor Benjamin. It all ended with a kindly voice apologising for their error but ultimately telling me they couldn’t help. It was Kafkaesque in as much as the processes and decisions were utterly inscrutable. But it would be unfair to describe it as impersonal. On the other end of the line were people doing their best.

This wasn’t a ‘people problem’. It was a ‘process problem’. My query couldn’t have been unique – yet, every year, thousands of business owners are forced to tie themselves in knots trying to navigate the system.

The UK isn’t alone in this. I’ve never lived in the US, but by all accounts their tax code is labyrinthine and bureaucracy can be a nightmare. But there are definitely countries where it’s much easier to deal with the state. Before it was paused, the World Bank’s Ease of Doing Business Index tried to rank countries on all sorts of metrics, including ‘paying taxes’; but it took too big a picture to uncover best practice.

Desk research only gets us so far. Get in touch if you have experienced or know of other jurisdictions that do this better.

Ultimately, AI has the potential to solve many of these problems, but in the meantime, here are three things that could be done easily to improve HMRC.

First and foremost, everytime I call HMRC they are “higher-than-normal call volumes.” They are clearly chronically understaffed and need more people. It goes without saying that this would pay for itself in saving countless hours of time for business owners.

Second, when being transferred, you shouldn’t ever be sent back to the voice-assisted main menu to start the whole process again. While it’s reasonable to have to be put on hold to whichever department you’ve been transferred to – after all, we don’t want people using shortcuts to skip the queue – it’s mad and maddening to make people start the whole process from scratch.

Third, and this would make the second solution redundant, there should be the option to simply have someone from HMRC call you back so you don’t have to wait on the line. This could be done automatically at intervals throughout the day, so that if you miss one call you don’t have to call again.

When complaining about all this to a tax adviser, they describe HMRC as a “lost cause.” I’m not quite so pessimistic. It’s not beyond the wit of government to fix this.

As Y Combinator’s Paul Graham said about the UK in a recent podcast with Tyler Cowen: “I am optimistic because they still have a gear that they haven’t shifted into...They’re not lazy, and they’re not stupid, and that’s the most important thing. Eventually, non-lazy, non-stupid people will prevail.”

Cowen thinks the UK is undercapitalised: “You keep on borrowing against the future. You don’t plough resources back in, and then at some point you don’t have anymore.” He mentioned the water utilities and the NHS, but you could tell the same story about our bureaucracies.

Graham has the last (optimistic) word: “Actually, when things get bad enough, they fix things. This place is not run by the kind of yahoos that America is. It may be a small country, but people running things – they’re not just boneheaded political appointees. When things are wrong, they notice they’re wrong, and they fix them. This is a very old country. That’s another reason it’s not going to tank. They’ve been through some bad stuff before. There have been ups and downs.”

Nation of Immigrants

We’ll soon be releasing two papers on visas and immigration. As part of this we’ll be looking for endorsements from entrepreneurs and experts. If you’re supportive of our campaigning on this topic, we think you’ll like our new papers. Let us know that you would like to receive an early copy of the reports with a view to writing an endorsement.

Along similar lines, we’re planning to undertake a roundtable on “pinch points” for foreign-born founders. This is more than just the visa system. For example, one common issue I’ve heard over the years is the difficulty in setting up a business bank account, but there are no doubt many more. If you have any views on what we should discuss, let me know.

Animal Spirits

Our Research supremo Eamonn Ives spoke at a Civic Future event on the impact animal agriculture is having on our environment, health system, and national resilience. Before joining us, Eamonn was a Special Adviser to the COP26 President, so he knows a thing or two about this. We’ve published his opening words and will share the video from the event shortly.

“I believe the answer lies in the innovative zeal of our country’s entrepreneurs and startups. In the last few years, we’ve seen an explosion in the number of companies trying to produce alternatives to meat and dairy.

I’m not just talking about plant-based alternatives such as Quorn – good as they may be. Here I’m thinking more of exciting startups like Ivy Farm, who cultivate lab-grown meat to make authentic pork sausages without the pig; or Better Dairy, who use precision fermentation techniques to make real milk without the cow.

Many of these firms are still in their developmental stages – often held back by completely irrational regulations… But they will be critical to fixing what I see as the biggest problem with our current food system, and as such we should be focusing relentlessly on doing what we can to help them succeed.”

On Nutshells

While 496-page tomes are sometimes needed to properly interrogate a complex policy issue, we also know that brevity can be a blessing. That’s why we produce shorter briefing papers, and why we’re going to start doing even shorter ‘Explainers’.

Explainers will succinctly engage with policymakers on key entrepreneurial issues. Rooted in our mission to make Britain the best place in the world to start and grow a business, these papers will be crafted to bridge the knowledge gaps between entrepreneurs, experts and policymakers.

As with all our reports, some will be in partnership with sponsors while others we will do off our own bat. If you have succinct policy ideas that you think we should pursue, get in touch.

Feeding Britain: Our Food Problems and How to Fix Them

On Monday (7th August, 2023) I was delighted to speak at a panel event organised by Civic Future. Entitled Feeding Britain: Our Food Problems and How to Fix Them, it focused on a range of issues relating to Britain’s food system. The debate was chaired by Inaya Folarin Iman, and Professor Tim Lang was my co-panellist.

The overarching thesis I wanted to advance was that entrepreneurs working in the food and drinks sector will be crucial to delivering food which is more nutritious, affordable, environmentally friendly and – perhaps most importantly of all – tasty. For my opening remarks, however, I paid particular attention to a specific subset of entrepreneurs – those who are running startups working on the protein transition.

Below is a rough script I prepared in advance of the discussion, slightly edited for fluency. When the recording is uploaded, I’ll make sure to link to it here.

Let me know what you think!

The biggest problem facing Britain’s food system right now is our collective addiction to animal agriculture.

Quite simply, if we’re to strengthen our food system – and indeed our country – we need to begin talking far more candidly about this, and start making a lot more meaningful progress.

In my remarks tonight, I’ll touch on the consequences animal agriculture has for our environment, our health system, and our national resilience.

And because that’ll all be quite bleak, I’ll conclude on a more positive note – looking at some of the ways we can address these challenges.

So, beginning with the environment.

I think most of us are increasingly familiar with the impact animal agriculture has on the world around us.

Over recent years, awareness of the emissions from animals – in particular cattle and other ruminants – has risen markedly.

In numerical terms, agriculture as a whole is responsible for 11 per cent of Britain’s greenhouse gas emissions – around 50 million tonnes of carbon dioxide equivalent.

More tangibly, that’s roughly the same as a year’s emissions from all the cars on Britain’s roads, or from all of the power stations which generate our electricity.

But that doesn’t tell the whole story.

Animal agriculture on the scale we currently practise requires space – and a lot of it.

It’s hard to arrive at a precise figure, but somewhere in the region of 11-14 million acres of land in the UK is given over just to rearing animals.

In contrast, approximately 170,000 acres is devoted to housing. (As a renter, this makes me very unhappy indeed.)

When we think about all of this space that animal agriculture takes up, we have to consider the counterfactual – what would be there if the farms weren’t?

In a lot of instances, it’d be ancient woodlands, or other natural features, like wildflower meadows, which we’ve actively chosen to eradicate from our landscapes.

So not only does animal agriculture contribute a lot of emissions, it also denies us the ability to sequester emissions too.

The wholesale clearance of natural habitats has also devastated our country’s biodiversity, with populations of numerous key indicator species in freefall over the past few decades – be that insects, amphibians or birdlife.

Finally, let’s not forget animal agriculture’s detrimental impact on air and water quality – issues which have shot to prominence of late.

So that’s the environment. Now, onto health.

I actually don’t care too much about personal health ailments that occur from what people eat.

With respect to food and health, I’m actually quite relaxed about this on a personal level. Frankly, if you want to gorge yourself to death on fatty burgers, I don’t think I should have the right to tell you not to.

What does scare me a bit more – quite a lot more in fact – is antimicrobial resistance.

According to the latest data I could find, 73 per cent of antimicrobials sold globally were for use in animal agriculture.

Animals are often given them prophylactically too – so, as a matter of course, rather than in response to any disease being identified.

What this means is that, to a large extent, we’re deliberately and willingly getting ourselves into an antibiotic arms race.

And given that no new classes of antibiotics have been discovered since the 1980s, it’s something I think we should be considerably more worried about.

Thanks to the mass medication of farmed animals, we could render some of our most powerful antibiotics completely redundant. In turn, this could make even relatively acute injuries or illnesses far more dangerous than they currently are.

It’s true that the UK has managed to somewhat reduce the amount of antibiotics in its farming sector – but use still remains widespread, and as the recent pandemic teaches us, in our globalised world, the distinction between what happens abroad and what happens at home is increasingly irrelevant.

And finally we turn to national security.

I guess by this we mean: “does the state have the means to secure a certain baseline objective in a time of crisis?”

And in the case of food, I guess that means a sufficient amount of calories per person, plus a good balance of nutrition too.

Here is where things just get really mind-boggling.

Eighty-five per cent of the land used to feed Britain is dedicated to rearing animals. Yet that area produces just 32 per cent of our calories. The other 15 per cent of land produces the remaining 68 per cent of our calories.

As a way of converting resources into food to eat, putting an animal in between us and the field really is quite dumb – to put it bluntly.

I’ll concede by saying that food shouldn’t just be seen as fuel. But we’re talking about national security here, not Michelin Stars.

So they’re the problems – what are the solutions?

As you might expect someone who works for a think tank called The Entrepreneurs Network to say, I believe the answer lies in the innovative zeal of our country’s entrepreneurs and startups.

In the last few years, we’ve seen an explosion in the number of companies trying to produce alternatives to meat and dairy.

I’m not just talking about plant-based alternatives such as Quorn – good as they may be.

Here I’m thinking more of exciting startups like Ivy Farm, who cultivate lab-grown meat to make authentic pork sausages without the pig; or Better Dairy, who use precision fermentation techniques to make real milk without the cow.

Many of these firms are still in their developmental stages – often held back by completely irrational regulations, and I would be happy to expand on these in the Q&A.

But they will be critical to fixing what I see as the biggest problem with our current food system, and as such we should be focusing relentlessly on doing what we can to help them succeed.

Thank you.


Universities: Challenged

“Should universities have a monopoly on spinouts?” This was the question posed in the headline of an article covering Academic to Entrepreneur, a paper we released this week, in which we call for university researchers to be given control over their own inventions.

This system, known as “Professor’s Privilege” gives academics ownership of the intellectual property they create, rather than assigning it to universities. This grants them the freedom to decide how best to use it – whether to release it to the world free of charge, attempt to commercialise it independently, commercialise it using pre-existing business contacts, or commercialise it through a university Tech Transfer Office (TTO). Not just their own university’s TTO, but potentially that of another university, which may be better suited to their specialisation, or have more resources at its disposal.

It’s a punchy proposal, but it doesn’t come from the ether. We’ve been following the academic literature for years.

Sadly the evidence comes from many countries having scrapped Professor’s Privilege in the past. As the paper details, in Finland the abolition of Professor’s Privilege led to a 46% drop in patenting by academics, despite an increase in government funding for university R&D. While in Germany, there was a 29% decrease in the quantity (and a decrease in quality) of academics’ research that is commercialised. In Norway, its abolition resulted in a 50% decline in both academic startup creation and patenting, and a decline in the number of citations per patent, the number of patents with an international scope, and the success of university spinouts. 

Only Sweden has maintained Professor’s Privilege, and in the process has managed to maintain a higher rate of academic entrepreneurship than even the US. Evidence suggests that Swedish academic entrepreneurs also have lower rates of commercial failure.

If you have two minutes to spare, read Eamonn Ives’ Twitter thread on it. Another two minutes? Air Street Capital’s Nathan Benaich supports it. Another five minutes? Anton Howes has an article detailing the failings of the current system, while UKTN also covered it, as did Times Higher Education.

In the short-term, this paper has been fed into the Government’s spinout review. As Anton writes for CapX: “There are many ways these problems might be solved, from increasing funding for TTOs to forcing them to take less onerous equity stakes. But at root, many of the problems stem from a monolithic, one-size-fits-all approach to spreading the innovations of university researchers – one that those researchers generally have no option but to use, because it is the universities that own their intellectual property.”

To their credit, recent governments have been open to rethinking this sort of thing. ARIA has the freedom to make big bold bets on the scientific trajectories, while Focused Research Organisations (FROs) – which we called for, and the Government was receptive to – will bring entrepreneurial processes and thinking to bear on solving the world’s biggest problems.

We think there’s strong evidence for a similar shakeup in the way universities support spinouts. We should not assume our current system, though functional, is optimal. And in the case of university spinouts, the current evidence points in only one direction.

Credit Where it's Due
We’ve been recently contacted by entrepreneurs and advisers sharing their experience that HMRC is turning down perfectly reasonable R&D tax credit claims, and investigating previously approved R&D claims from genuine tech startups. 

I’m not qualified to judge individual claims, but the number of people who have contacted us suggests that it’s something worth looking into.

If this is something impacting your business or your clients, we would be keen to know. It’s something we’ve raised with our Advisers of the All-Party Parliamentary Group for Entrepreneurship, and may take forward.

Silicon Fen

A week is a long time. It was only seven days ago that I was lamenting the ways the planning system stymies entrepreneurs. Soon after – I can claim no credit, sadly – Michael Gove announced an ambitious plan to build more homes in Cambridge, including a major new quarter for the city.

The need for this is obvious to most people (if it’s not, read The Housing Theory of Everything). On both the left and the right of British politics – and everything in between – it is generally agreed that successive governments’ failure to allow building has held back growth. The politicians know this, though have been shy to say so publicly.

Less recognised, however, is the need to build out Cambidge’s lab space for innovators. As we argued in Strong Foundations, labs often need bespoke design, like higher ceilings to allow for fume hoods, ventilation systems, and ‘dirty corridors’ between labs so that researchers do not need to ‘gown-up’ and ‘gown-down’ as they would in a traditional office building. 

Gove’s speech was spot on: “While Cambridge’s growth has been held back, its rivals abroad have benefited. In 2021, Boston had 6 million square feet of lab space under development; in an average year, Cambridge and Oxford together managed just 300,000 square feet. In Cambridge today, you have to wait almost a year for the next available lab space: that is no way to incubate the dynamic technological innovators that we sorely need.”

If you live in Cambridge – or even if you don’t – you may be thinking: well, that’s all well and good, but we don’t want ‘Barratt Boxes’ ruining one of the world’s most beautiful cities. But this isn’t what is being proposed – we don’t need to compromise between beauty and density.

Samuel Hughes has written the must-read article on this – an important read given his research helped make this happen. As he writes: “There is no economic or technical reason that the Government could not allow something that resembles the urbanism of Clifton or the Edinburgh New Town. It just needs to allow building on sites where people really want to live, namely sites that are contiguous with the existing settlement.”

The solution wasn’t rocket science, but, if it happens, science and entrepreneurship will certainly rocket.

Punt on the Future
Beyond agglomeration, Cambridge, and the country at large, would benefit from more university spinouts. On Monday we’ll be releasing a punchy paper on this topic. If you want to get it in your inbox as soon as we unleash it to the world, sign up here.

May I take your order?
At a number of recent roundtables, entrepreneurs have discussed their desire to exit their business. While successful exits are the sign of a healthy ecosystem, many of these decisions are being undertaken for the wrong reasons: the political landscape, access and costs of capital, and rising costs of doing business. Of equal concern, many have discussed their plans to move their business overseas, which could be avoided if the UK had a more favourable business environment.

These anecdotes were recently confirmed by recent polling by Evelyn Partners, which found that the majority of UK businesses with a turnover of £5 million upwards are pursuing an exit strategy: 65% of owners are looking to sell off their enterprises, with 40% planning to exit within the next year.

This is why we’re joining up with Evelyn Partners for a private roundtable to better understand entrepreneurs’ concerns. With an election around the corner, we will take your anonymised views to the Government and opposition.

You can read the whole newsletter here, and sign up for the newsletter here.

Fighting Talk

“Young people have been forced to live in sub-standard houses on the periphery of cities and forced to accept low wages for decades as their elders have got fat and happy on the proceeds of asset-price inflation and triple-locked pensions. There are admirable signs that they are fighting back by organising pro-growth organisations (e.g., The Entrepreneurs Network, Collective Intelligence, Britain Remade) and writing pro-growth publications (e.g. Works in Progress). The YIMBYs are on the march.”

So wrote Bloomberg’s Adrian Wooldridge following Civic Future’s Great Stagnation Summit. The former author of The Economist’s Lexington, Schumpeter and Bagehot columns is spot on. Not just about us being involved in the fightback, but more about the state we’re in. (On the issue of housing costs, our paper Strong Foundations explained how the planning system stymies entrepreneurs.) 

The sub-optimal state we’re in was most starkly articulated by our Adviser Sam Bowman, who set the tone for the conference with the deliberately provocative claim that Britain is a developing country, and that there is virtually no recognition of how bad things are among British elites. 

Sam’s full list deserves your attention, but here are some devastating facts:

  • By GDP per capita, adjusted for purchasing power, the US ($76,399) is 39% richer than the UK ($54,603). GDP growth since 2010 has been 47% faster – nine percentage points – in the United States (28% growth) than the UK (19% growth), despite being from a much higher level.

  • By productivity, or how much we produce per hour worked, the US was 38% more productive than the UK (UK $54.3/hour, USA $73.7/hour) in 2019. France and Germany were much closer to the US than to the UK at $69/hour.

  • Americans could stop working each year on September 22nd and they’d still be richer than Britons working for the whole year.

  • A median square foot of housing in the US is about half the price of the median square foot of housing in the UK (about $225 or £173 in the US, versus £331 in Britain).

  • The median industrial price of energy, even before the Ukraine war, was 7 cents per kWh in the US and 19 cents per kWh in the UK.

The good news at the conference came from Tyler Cowen, who, having diagnosed it back in 2011, now thinks the Great Stagnation is over. Tyler was also bullish on UK innovation, citing the development of the Oxford-AstraZeneca COVID‑19 vaccine and the fact that DeepMind started in the UK. As those of us who work with entrepreneurs all know, this is just the tip of a sizable iceberg of incredible innovation.

While Sam’s and Tyler’s stories aren’t mutually exclusive – they vehemently agreed on everything – we can’t keep getting the fundamentals wrong. Luckily, the fundamental problems are a lot easier to solve than those being tackled at the frontier of science and technology. At least, they should be.

When I’m 64
As Debbie Wosskow OBE, member of our Female Founders Forum, reminded us all on LinkedIn, the average age of a successful startup founder is 45. That’s one reason we’re working with Enterprise Nation on barriers for older people (re)entering the economy – whether that’s working for an entrepreneurial company or starting a business. If you want to feed into it, Enterprise Nation has added some questions to their latest barometer

On the Horizon
Our friends at the Regulatory Horizon Council (RHC), an independent expert committee set up by the government, have asked us to share an opportunity to input into the unique regulatory experiences and challenges you face. You can do this openly or anonymously. While I can’t promise that the Government will act on your response, we’ve found the RHC proactive in trying to push a pro-innovation agenda. Let them know your thoughts.

You can read the whole newsletter here, and sign up for the newsletter here.

Fees-High-Ho-Hum

While the week started well enough, with the Chancellor’s Mansion House announcement on unlocking pension funds (something we have long campaigned for), it hasn’t taken long for things to sour. Yesterday we found out that the Government will fund public sector pay rises by increasing visa fees. Whatever you think about public sector pay, this is not the way to pay for it. 

Visa fees were already cripplingly high for many businesses, and much higher than our competitors, having already gone up nearly 500% over the past 10 years.

Soon UKVI visa application fees and visitor visas will rise by 15%. Fees for certificates of sponsorship will rise by £20%. But more outrageously, the Immigration Health Surcharge, which is a payment towards the NHS, will go up by an eye watering 66% – from £624 per year to £1,035 per year. The cumulative costs are staggering

If the Government was really committed to making the UK the next Silicon Valley (as both Gove and Hunt claimed this week), it wouldn’t be doing this.

If you tax something more you get less of it. The Government is imposing a whacking burden on high-skilled workers and the businesses that need that talent to scale. We will all be poorer as a result.

Mastering Basics
This week Mastercard released Powering Small Businesses, the second report in its ‘Get Britain Growing’ series. There are seventeen recommendations, but I want to focus on one that I think is particularly important: “Don’t try to develop new programs from scratch, particularly if similar programmes or interventions are already available. Instead, actively seek out partnerships with relevant organisations that have been successful in supporting small businesses and help them scale their work.”

This is spot on. We really don’t need any more government-led interventions that crowd out the charitable and private sector. But that doesn’t mean the government can’t do good. Instead of trying to reinvent the wheel, the government can support existing interventions by supporting their evaluations.

It’s not a new idea. The Business Basic Fund supported projects that tested methods of encouraging small and medium-sized enterprises to boost their productivity through ways of working and technology. Money was made available to be shared between the successful proof of concept ideas and trials.

Doing so will build an evidence base for what works, and, just as importantly, what doesn’t. This is vital for the organisations delivering the interventions, as well as others considering future interventions.

Check out Strive UK to find out about their projects and support.

Looking Ahead
It’s worked well in the past, so I'm just sharing a few projects we’re considering, which you might want to input into. Get in touch if you have any thoughts on the following questions:

  • What can the government do better to help business owners realise their growth potential? For example, are there policy levers that would help business owners who would like to scale their business, but feel compelled to exit?

  • Is there anything to learn from the Corporate Venturing Scheme (CVS), which existed from 2000-2010?

  • How should we think about ecosystem building in Birmingham/the Midlands? What local knowledge should we be aware of?

  • What needs to change so the government collects better business data?

Read the full newsletter here, and sign up for my Friday newsletter here.

New Needs Friends

To misquote Anton Ego, voiced by the late, great ​​Peter O’Toole in Ratatouille: “Not everyone can become a great entrepreneur; but a great entrepreneur can come from anywhere.”

It’s one of the driving forces behind the work we do. Well, not so much the 2007 Pixar movie, but more like the brilliant research of John Van Reenen. His work on Lost Einsteins teaches us that there are large disparities in innovation rates by socioeconomic class, race and gender – children at the top of their third grade (ages 8-9) mathematics class are much more likely to become inventors if they come from high income families than if they come from poorer backgrounds, for instance.

Similarly, Georgetown University’s 2019 report, Born To Win, Schooled To Lose, argues that due to striking disparities “it’s better to be born rich than smart” in the US now and that “the most talented disadvantaged children have a lower chance of academic and early career success than the least talented affluent children.”

This is why we have been running the Female Founders Forum with Barclays for several years now, and more recently the Inclusive Innovation Forum with Morgan Stanley. We’ve built our research and campaigning on the expertise of those in the entrepreneurial ecosystem and over the coming weeks will be finalising our next steps. If you have any thoughts on what you think we should be doing, now is the time to get in touch.

For its part, this week the British Business Bank released its report Finding What Works on how to improve diversity in venture capital investment. The research suggests three pathways for enhancing diversity in venture capital firms.

First, by increasing diversity among key decision makers – particularly Investment Committees. Second, by increasing the pipeline of investment opportunities from underserved founders. Successful firms are already actively seeking out diverse founding teams by engaging scouts with their own diverse networks to source investment opportunities, and using incubators and accelerators for earlier stage firms. And third, by measuring and delivering on progress.

It’s a solid report. Of particular note is a ranking of the perceived effectiveness of 14 actions VCs could take. It could be interesting to ask founders, or smaller funds to rank the same actions, as well as considering if any 'actions' are missing from the list.

Young Turk
With support from the Association of Business Executives, we’re undertaking an ambitious project to sketch out what the world’s most pro-innovation visa system would look like. 

Luckily, the ambition of the project is matched by that of its author. Derin Kocer was previously a journalist and remains the youngest-ever byline holder of Independent Turkish. He has a Substack on international politics you can subscribe to

Get in touch with Derin with any insights on what would go into building a pro-innovation visa system – not just for the UK, but the whole world. We will be launching the report at 3.30pm in the House of Lords on 6th September. Patrons, Advisers and Supporters may want to save the date in their diaries before the invites hit your inboxes.

Like & Subscribe
The Department for Science, Innovation and Technology has just launched a newsletter and it’s better than most of these sorts of things. Most impressively, it includes the names, job titles and email addresses of people you can reach out to, which addresses a common complaint from entrepreneurs. Next step, office hours?

On the topic of newsletters, if you’re not subscribed to Dr Eamonn Butler’s sardonic takes on the latest political machinations you’re missing out. To celebrate Adam Smith’s 300th birthday, the ASI has opened up an essay prize asking: what Adam Smith would write about today? They are looking for 1,500 words, and are offering prizes up to £3,000. You can find more on their website (scroll down).

Read the full newsletter here, and sign up here.

Right Round, Baby

Much to the surprise of many, the Government is putting its weight behind reforming university spinouts. More than anyone else, Air Street Capital’s Nathan Benaich can be credited – or blamed, for those lobbying against change – with putting this on the political agenda.

As Benaich explains on Spinout.fyi, this kicked off in May 2021, when he wrote an op ed in the Financial Times (Paywall). Off the back of this, he’s built a database of founders’ experiences spinning out. According to this data, most founders are dissatisfied – principally because of how long it takes: “The negotiation process is too long and cumbersome: 66% of spinout deals take longer than 6 months to complete, and 27% more than a year. In comparison, startup seed rounds typically take 3 months.” In addition, Benaich finds that UK universities take 19.8% of equity on average, compared to 7.3% taken by European universities and 5.9% taken by US universities.

This wasn’t a new issue, but it’s only recently gained political attention, with the Government keen to hear from the founders of spinouts. We’ve engaged with the team working on this consultation and are impressed. Entrepreneurs shouldn’t just respond if they have a negative account of working with their tech transfer office – a positive or neutral experience is just as valuable. After all, one of the big takeaways from Benaich’s data is that there is significant divergence between universities on everything from golden shares, royalties, upfront payments, exit fees, and much else besides.

You can access the consultation here. Please share it with anyone you know who has spun out a company from university.

For our part, we are ready to roll on a report on spinouts. Anyone interested in getting a briefing before it hits your inboxes should drop Eamonn Ives an email

Raking Progress
With news that OpenAI will open its first foreign office in the UK, and following on from the much-needed upgrade of both people (bringing in the super-smart entrepreneur Ian Hogarth) and bodies (scrapping the AI council) advising the Government, there are reasons to be optimistic about the role that the UK’s entrepreneurial ecosystem can continue to play in building this foundational technology. 

A lot has been written about the transformative power of AI – but much of the time people are arguing past each other. For a considered, good faith debate, I recommend reading what started as a Google Doc conversation between Tamay Besiroglu and Matt Clancy (a previous author of our report on the future of work), with the former arguing that we will likely see a rate of growth that far surpasses anything we’ve previously witnessed, while the latter isn’t quite so optimistic.

Our Man in Alba
Dr Anton Howes, our Head of Innovation Research, has relocated to Edinburgh. As such, you could argue – and I’m going to do so – that we now have a Scotland office. If you’re based in Scotland then do reach out to him, as he’ll be embedding himself in the local ecosystem.

Anton is a noted historian of the industrial revolution (sign up to his award-winning Substack here). While he’s up there, he’ll be tasked with spearheading a rerun of the Scottish Enlightenment, which boasted the genius of Adam Smith (the founder of economics born 300 years ago), David Hume (the great empiricist) and James Watt (a pioneer of intangibles assets). No pressure, Anton!

Sign up to my Friday Newsletter here.

Watch This Space

Building on our joint reports on access to finance, government, people and markets, today we released our fifth report with Enterprise Nation on access to space. Not the final frontier this time (we've already done did that through with the APPG for Entrepreneurship); but closer to earth, whether that’s an office, coworking, shop, cafe, or other space.

A fair amount of the report is devoted to the grossly exaggerated predictions of the death of the high street. As we write in the opening of Access All Areas: Space, disruption isn’t new: “Ever since the Industrial Revolution, commercial space has changed as dramatically as the economy has. When it comes to retail and hospitality, new products and services and resulting new consumer demands have been a constant challenge, as well as opportunity. Shop numbers have been steadily declining since at least the 1920s, while mass car ownership transformed the way we live, with the country’s first out-of-town shopping centre, Brent Cross in Hendon, built in 1976. In fact, since the 1960s, we’ve gone from high streets and town centres dominated by essential retail, to one where discretionary social and experience are taking centre stage.”

In the face of this creative – and not-so-creative – destruction of the high street, successive governments have tried to help. Business Improvement Districts were introduced in 2003, whereby local businesses vote to invest together in their area; the Portas Review of 2011 saw retail expert Mary Portas conduct an independent review on the future of high streets; we’ve seen a growing number of reliefs and increasing amounts of cash, including the £675 million Future High Streets Fund, the £3.6 billion Towns Fund – which, following accusations of “pork barrel” politics has been rolled into the Levelling Up Fund, a pot of £4.8 billion given to local authorities in England for infrastructure projects that promote economic growth and regeneration.

While successful regenerations require public money, they're by no means the only policy lever though. 

The paper argues for local authorities to be empowered by giving them more responsibility over Business Rates reliefs and exemptions for small businesses and charities. This would empower those with a better understanding of what’s needed, such as creating locally administered Community Ownership Funds to save businesses, or funding charities and social enterprises that work in the community directly.

Also, while charity shops are a positive and integral part of many high streets, because they are tax advantaged small businesses can’t always compete. Depending on their nature and number, too many charity shops can hollow out a high street, even in economically vibrant areas, making them less diverse and reducing its overall value and attraction for visitors.

Ultimately, we should trust those who are embedded in our communities with the discretion to know what’s needed to incentivise and protect spaces for local businesses.

The paper also calls for the Localism Act 2011 to be enhanced, granting greater authority to community organisations that have proven their long-term sustainability and presented a strong business case for assuming ownership of dilapidated buildings within their vicinity. This is especially relevant when these structures pose a detriment to the overall appeal of the local high street. 

Following in the footsteps of Andrew Dixon and others, the paper also calls for the business rates system to be scrapped and replaced with a tax on the underlying land values, not productive investment. For example, the proposed Commercial Landowner Levy would cut business taxes in the vast majority (92%) of local authorities – particularly outside the South East – helping to rebalance Britain’s divided economy. After decades of consultations and dithering, one way or another, whoever forms the next government really needs to fix business rates.

The report also sees potential for central and local government, as well as its arm's-length bodies to work with established coworking partners to set up places within their property portfolio. For example, Network Rail and The Office Group have opened drop-in workspaces in King’s Cross, Liverpool Street and Leeds stations as part of The Station Office Network, an initiative intended to provide mobile offices in train stations throughout the UK’s major cities.

Sage Advice
This week Sage released A Blueprint for Digital-led Growth. Two ideas piqued our interest. First, it calls for the Government to ensure that as part of Open Finance, credit agencies should make Commercial Credit Data Sharing available to businesses so they can understand and improve their own creditworthiness and help facilitate lending needed to grow.

Second – and this is familiar territory for regular readers – we agree that the Government should create a government-backed API-driven digital ID that businesses can use to verify their identity with banks and accounting providers, among others. While the Government is progressing things like the Digital ID Trust Framework, Digital Service’s One Login, and a new ID verification process for Companies House, the history of digital identity in the UK and abroad teaches us that this needs much more coordination.

And the Award...
There is still time to get your nominations in for the Barclays Entrepreneur Awards. Nominate your own business or others – there’s a category for most stages and types of business. The awards have been running for eight years – about as long as our partnership with Barclays on the Female Founders Forum – and we’ve seen first-hand the value of getting the deserved recognition and profile that winning an award like this can give you and your business.

This is the opening of our Friday Newsletter – sign up here.

Capital Projects

“There is an extraordinary stat. Something like half of all our fastest-growing innovation businesses have a foreign-born founder, so that tells you you need a visa system that attracts the best and brightest to the UK.”

This is a quote from Prime Minister Rishi Sunak at the opening of London Tech Week, which took place this week. We revealed this “extraordinary stat” – that nearly half the fastest-growing businesses in the UK have a foreign-born founder – in our Job Creators report. Such facts have helped make the case for the High Potential Individual (HPI) visa and are helping us make the case for its extension and further reforms.

That statistic came from Beauhurst’s data via a Syndicate Room report, while the writing of the report was sponsored by Sukhpal Singh Ahluwalia, a successful immigrant founder who came to the UK as a refugee having fled the regime of Idi Amin in Uganda. This data needs updating as it’s from 2019. If you’re an individual or company and believe in the importance of keeping the door open to foreign-born talent, drop me a message to see how we could work together on this project.

Both Rishi Sunak and Keir Starmer spoke this week about how London is a centre for tech. Their positivity was confirmed a few days later in Startup Genome’s GSER 2023 report – a comprehensive analysis of the current state of startup ecosystems worldwide – which ranks London joint-second with New York City, with only Silicon Valley ahead.

The numbers speak for themselves. While the likes of Berlin, Amsterdam, Paris and Stockholm are impressive, the economic value of London’s ecosystem is more than Paris (second), Berlin (third) and Stockholm’s (fourth) combined: £364 billion versus £326 billion. It’s also worth more than their combined early stage funding: £18 billion versus £16.7 billion, and exits in London are valued more than all four combined too: £100 billion versus £95 billion. In other words, it’s not even close. 

As the report states: “London remains Europe’s leading tech startup ecosystem. The region has seen an upswing in exits over $50 million, with several high-value exits over $1 billion, including fintech Wise ($12.2 billion), Deliveroo ($10.5 billion), and Oxford Nanopore Technologies ($4.6 billion). In addition, Europe’s largest Fintech unicorn, Revolut, is based in London, boasting a valuation of $33 billion, while SumUp and Rapyd are valued at $9 billion and $8.7 billion respectively.”

We all know there’s room for improvement, but we do this from a position of strength: as the UK’s unequivocal leading entrepreneurial ecosystem. It’s why a16z (perhaps still better known as Andreessen Horowitz) has just chosen to base its first office outside of the United States in the capital.

London isn’t an island though. For example, a16z is adamant that the value it sees in its bet on blockchain will involve it working with universities up and down the UK. And the Startup Genome report ranks the Manchester-Liverpool region sixth as an emerging ecosystem, with Bristol, Edinburgh-Glasgow, Birmingham, Durham, and Belfast also getting very honourable mentions.

The government has a role to play in supporting these other ecosystems, most critically through infrastructure. As Marc Andreessen (the “a” in a16z) persuasively argued back in 2020: It’s time to build. There remains much to do though. As our Adviser Sam Dumitriu recently showed, it’s too hard to build new homes, factories, labs, roads, railways, airports, and energy infrastructure like wind farms, grid connections, and nuclear power stations. While Mustafa Latif-Aramesh and Angus Walker detail in The Telegraph (paywall) the ways in which large infrastructure projects are increasingly being held up in the UK. Just read the Wikipedia article on Northern Powerhouse Rail for a textbook case of political mismanagement and Cheems Mindset.

It’s time to celebrate our successes and build on them – literally.

Group Think
The All Party Parliamentary Group (APPG) for Entrepreneurship – for which we’re the Secretariat – published its latest newsletter this week. Among other things it included an update on our new Officers: Anna Firth MP, Virendra Sharma MP, Paul Howell MP, Brendan Clarke-Smith MP and Ben Bradley MP.

Sign up to the APPG monthly newsletter here, and feel free to drop me an email if you’re keen to see how you can get involved in the APPG.

Norton Anti-Vibes

In 99.9% of circumstances, a Hollywood celebrity should be the last person you turn to for policy advice, which is why I wasn’t expecting much going into an event with Uber and Edward Norton. I was planning to gloss over the policy with the hope of getting a slither of insight about his films. Luckily it turns out Norton is in the 0.01%.

Norton didn’t rely on emotive arguments, but on sound economics to argue for a better world. He wants to ensure the environmental costs of doing business are internalised by companies, and defends the creation of markets to protect environmental assets. Unlike too many environmentalists, he understood how to think at the margin and cautioned against making perfection the enemy of the good. As he has stated back in 2019 when probed about Uber:

“Does any form of car-based transportation within urban environments need to grapple with the challenges of congestion and pollution and the nature of employment? Of course. But the New York City medallion system should be cancelled tomorrow. It is not egalitarian. It is terrible economically for the drivers. It drives empty cars around polluting and congesting the city. This notion that Uber is not an improvement off of where we were is absurd. Does it need to get better? Absolutely. But there is no way you can tell me that the experience of riding in a New York taxi is anything other than debased compared to ride-sharing services.”

The critical point for Norton is that the creation of ride-hailing services put us on a path to a better world. It didn’t come overnight, but without this technological shift there was no escaping the inherent inefficiency of customers and  cabbies being unable to coordinate. There is no putting the genie back in the bottle. And while there are individual losers and new policy challenges thrown up, ultimately we are much better off for this technology existing.

There are many areas of the economy that could be equally transformed. We’ve written about drones, copyright, and most recently in our Operation Innovation collection Meri Beckwith wrote an essay on clinical trials. The co-founder of Lindus Health – who has just raised money from the likes of Peter Thiel to accelerate their use of machine learning and data science to revolutionise clinical trials – paints a bleak picture of ethics committees in the UK. For example, when discussing whether to allow a clinical trial for a new drug for Stage 3 cancer to proceed, the committee, which only meets every eight weeks, spent the session complaining about the font used in various documents giving no time to discuss the drug. Beckwith suggests paying ethics committee members and making it easier to use private ethics committees like in the US.

During next week’s London Tech Week I’ll raise these and other cases at a roundtable with George Freeman, the Minister of State for Science, Technology and Innovation (who has himself identified a fair few obstacles in his TIGRR report) organised by the excellent Regulatory Horizon Council.

When it comes to regulatory hurdles like this, we rely on you – our network of thousands of founders – to let us know what conditions are like on the frontier of innovation. In turn, government relies on us, and organisations like us, to frame these individual experiences as part of a bigger picture and suggest solutions. So whether you’re a business owner, investor or anyone with knowledge of something holding business back, now is the time to get in touch.

Norton said it best upon his decision to devote more time to entrepreneurship, investing and environmentalism than acting: “I don’t want to look back on my life and see the large majority of it coloured with me playing pretend instead of actually doing things.”

Mighty Oaks
Mid-sized businesses should be Goldilocks for governments – big enough to boost productivity and create jobs, but small enough to be nimble and innovative. 

However, without the resources of very large businesses to lobby government, or the weight in numbers (and therefore voters) of small businesses, they are often overlooked by policy. Compared to equity backed tech businesses, much less attention is paid to businesses that are already profitable, but aren’t (yet) large companies.

That’s why we’re hosting a roundtable for profitable businesses turning over £1 million with Shadow Minister for Small Business, Consumers and Labour Markets Seema Malhotra, and Shadow Minister for Business and Industry Bill Esterson. 

Watch This Space

I’ve written before about space and entrepreneurship. However, last year I was focused on the final frontier – or, more precisely, the incredible applications of space technology – now we’re looking at an equally interesting ‘space challenge’ for entrepreneurs a little closer to home. We’ll soon release a new report with Enterprise Nation covering everything from shops and offices, to markets and coworking spaces.

I won’t break the embargo, but it won’t surprise you that the report covers the challenges to bricks and mortar businesses, many of whom have struggled in recent years.

But while the future of retail and leisure has changed dramatically, I remain a bricks and mortar optimist for one simple reason: people think local shops and services are important for their communities. It’s why recent governments have poured money into things like the Future High Streets Fund, Towns Fund, and Levelling Up Fund. They’re responding to voters, and while some might argue that revealed preferences show that people would prefer to shop online, both can exist alongside each other. 

Just consider Westfield, whose Stratford and White City locations offer the whole shebang: retail, dining, leisure, offices, hotels and residential. The future of bricks and mortar is about this sort of diversity. The two centres generate significant additional expenditure for the benefit of local businesses, including an estimated £18m-£25m annual spend by centre employees.

Westfield is also keen to open up their space to more entrepreneurs, which is why we’re partnering with them on their Grand Prix competition, which offers creative and eco-conscious food, fashion, beauty, home, leisure, and services brands the chance to win a free retail space.

The winner will get a pop-up shop or kiosk for one year, £50,000 contribution to design and fit it out, £200,000 worth of media promotion, and a chance to compete for the European prize in Paris to kickstart European expansion. Your company should have been incorporated less than seven years ago; operate fewer than five UK stores; be able to operate a physical point of sale; and sell goods or services to individual consumers. Entries are open until 30th June.