14 July 2010

The Global Entrepreneurship Monitor which today published its GEM 2009 UK report shows entrepreneurship levels falling in Britain. According to GEM research "Between 2007 and 2009, there was a decline in opportunity perception, in the perceived merit of starting a business as a career choice, and in perceived media coverage of successful entrepreneurs. Around one in four (23%) of UK working age adults who were not entrepreneurs thought there would be good opportunities for starting a business in their local area in the second half of 2009. This compares with 33-35% in 2006 and 2007, before the recession began. In 2009, 48% of the UK working age population thought that starting a business was a good career choice, down from 52% in 2008."

"In 2009, all those who expressed fear of failure were asked for their reasons. The balance of reasons tips towards the combination of fear of bankruptcy and losing one’s property, with 69% of non-entrepreneurial respondents citing either or both of these reasons or both in combination with embarrassment.

In the UK the number of people who expect to start a business within the next 3 years (i.e., 6.1% of the adult population) fell by 10% between 2008 and 2009. This drop is not statistically significant and is slightly smaller than the US and G7 average fall of around 14%. However, rates of future start-up expectation are still higher in the US and G7 in 2009 – 11% and 8% respectively."

The report suggests that entrepreneurship is key for the growth of the West Midlands region. “Young people are very positive; when you ask ‘do you think you’ll start a business in the future?’ they put their hands up and say yes, definitely.” says Professor Mark Hart of GEM UK. But, he adds “almost 70 per cent of young people say that funding is the biggest barrier, something that older age groups don’t find as much.”

Responding to the Global Entrepreneurship Monitor UK 2009 report, Minister for Business Mark Prisk said:"The coalition Government is well aware of the challenge it faces to raise enterprise awareness and start-up activity in the UK. We will meet that challenge by making this decade the most entrepreneurial and dynamic in our history. This ambition demands a coherent and comprehensive strategy for enterprise:

1. Challenging aspirations and capability - embedding enterprise awareness and business management skills into mainstream education: schools, FE colleges and HE institutions.

2. Modernising business support – ensuring the support, information and advice provided to businesses is fit for the 21st Century.

3. Supporting cash flow and access to finance – ensuring individuals and businesses have the skills, tools and networks they need to understand the options and to access finance, and that Government identifies and addresses market failures.

4. Reducing burdens - making it easier to start and grow a business by delivering long-term certainty and stability in the tax system, and pushing ahead with the promise to reduce regulation.

5. Transforming opportunities for individuals and their communities – a radical change in the support offered to workless people through Work for Yourself and providing access to mentors and small loans for the most disadvantaged”.

Click here to read a copy of the GEM 2009 UK Report