Britain isn’t a nation of shopkeepers.
We’re a nation of entrepreneurs and wannabe entrepreneurs, and a magnet for entrepreneurial talent from around the world, as revealed by the latest Global Entrepreneurship Monitor (GEM) – the world’s most authoritative comparative study of entrepreneurial activity.
The findings from Aston University in partnership with NatWest reveal that 8.7 per cent of the UK population were involved in early-stage entrepreneurial activity, with one in five individuals engaged in some type of entrepreneurial activity or intending to start a business within the next three years.
We haven’t always been so dynamic. Prior to 2010, the long-run rate of entrepreneurial activity was six per cent.
Today, although we still lag behind the US, where 13.6 per cent of the population is trying its hand at early-stage entrepreneurship, we are the undisputed European capital of enterprise.
In France only 3.9 per cent of the population is engaged in entrepreneurial activity, while in Germany it’s 5.3 per cent. Emmanuel Macron and Angela Merkel have some work to do if they’re going to catch up.
For this to continue, we need to ensure we have Adam Smith’s trinity of “peace, easy taxes, and a tolerable administration of justice”, but there is something even more fundamental: human capital. We need people who are willing to take on the private risk – after all, most businesses fail – for the public good.
Entrepreneurship education is one side of the coin, but we also have an off-the-shelf solution: immigration.
Immigrants are more entrepreneurial than resident populations. Whether forced by hardship or driven by the prospect of a better life, those with the guts to up sticks and rebuild their lives in a new country are more likely to build a business when they get there.
The legacy of their struggle is phenomenal: around half of Fortune 500 companies were founded by American immigrants or their children.
What if Estee Lauder (the daughter of Hungarian immigrants), Elon Musk (a South African immigrant), or Henry Ford (the son of an Irish immigrant) hadn’t had the opportunities of the American Dream?
The GEM research backs this up, finding that 12.9 per cent of immigrants into the UK were involved in early-stage entrepreneurial activity, compared to 8.2 per cent of lifelong residents. And there’s an ethnic minority angle too – 14.5 per cent of the non-white British population are involved in early-stage entrepreneurial activity, compared to 7.9 per cent for white Brits.
Britain’s entrepreneurs have never had it so good. The Del Boy wheeler dealer image of entrepreneurship has been consigned to the dustbin of history – around 80 per cent of the non-entrepreneurial population believe that entrepreneurs have a high status in society according to the GEM.
But we can’t rest on our laurels. We need to ensure a post-Brexit Britain is open to talent from around the world.
The (relatively) new home secretary Sajid Javid has got off to a terrific start. The morphing of the graduate entrepreneur visa into a startup visa – which brings in accelerators alongside universities to support international entrepreneurs – is a great move, but there is more work to be done.
The entrepreneur visa needs an equally radical overhaul, and funds from the investor visa should be channelled into risk capital instead of gilts.
In her last party conference speech, Prime Minister Theresa May promised to bring back the “British Dream”. I doubt she was alluding to Britain as a nation of immigrant entrepreneurs – but she should have been.