We are Living in the Greatest Generation for Entrepreneurship
I originally published this piece in The Huffington Post.
It is no secret that this very moment is perhaps the most fortunate time to start a business in recent times, in Britain.
The working Britain that I graduated into after university is certainly a very different creature from that when I was growing up. One only needs to take a walk through the many co-working spaces set up across East London, to see rows of 20-something techies thumping away at their keyboards, impetuously trying to become ‘the next big thing’. It is impossible to walk through a train station or shopping centre without now seeing a new “pop-up” something: onesies for your baby, Brazilian coffee you can roast at home, or that innovative new banana slicer you probably don’t need. Even aunty Annie who used to make cupcakes for the neighbours has put up a Facebook page with a growing fan base of customers. This is Britain in business 2.0.
Over the last five years, the country’s business landscape has changed irrevocably and I believe there are 3 key reasons for this.
Firstly, access to funding has been democratised. When the banks were turning away first time entrepreneurs and career changers, the government set up the Startup Loans Scheme.
Under this programme, over £145 million in small business loans have been handed out to everything from high-end sportswear makers to these guys who converted a double-decker bus into an office. Even Richard Branson has jumped on board by launching Virgin Startup; perhaps the first time the private sector is playing catch up with the government.
The result of these programmes has seen a new company born every minute in 2014, adding jobs and raising tax in the economy. The Conservative’s small business manifesto released last week aims to generate a further 600,000 new businesses every year by 2020.
Secondly, the way we think about ‘small business’ has changed massively. For the first time, top graduates are shunning the well-trodden path into the City and instead going to work for smaller, high-growth startups. Organisations such as EF and Escape the City are ‘re-educating’ young people to show them there is possibly a more rewarding path forward in the world of entrepreneurship.
Initiatives set up by Digital Economy Minister, Ed Vaizey, to plug the digital skills gap as well as new university programmes by Cambridge and UCL have helped to stabilise small local businesses and modernise the labour market in line with digital needs.
For example, Shakira Chanrai quit her high-flying investment banking job to learn coding and develop Grappled, a hugely popular wine-pairing app. Schools have begun teaching web development and Young Enterprise competitions have produced smart ideas such as EmergyPower, co-founded by 16-year old Aman Sharma.
However, the founding of Tech City in 2010 was probably one of the biggest turning points. From what was just 85 tech businesses in existence then, to around 15,000 new startups now being formed every year, London is now only third to San Francisco and New York as the largest tech cluster in the world. Indeed, Google, Facebook and Amazon couldn’t open a UK office fast enough. This has been replicated across the country such as the development of Cambridge’s Silicon Fen and the Chancellor’s 2015 Budget provisions for tech entrepreneurs’ hubs in Manchester, Sheffield and Leeds.
Lastly, the recent initiatives around ‘scaling-up’ has shown that the commitment is more than just about getting people to “start-up”. There is a genuine desire to foster and maintain the companies of the future for the long haul.
The recent white paper on “Unlocking the Sharing Economy” has emphasised how anyone should be able to monetise parts of their life. Currently, you can rent your parking spot out to strangers, rent your excess desk space to freelancers, rent your sofa out to travellers, and even let your neighbours pay to babysit your dog.
An easing in regulations which hindered such business opportunities previously has thus helped enable venture capital investment to pour in, resulting in an overall record £460m in the first quarter of 2015.
The innovative Seed Enterprise Investment Scheme (SEIS) has opened doors for small businesses that could never have existed previously. Anyone can now become an investor in a small business by portioning off some income tax towards a startup investment, which could produce multiple returns. Without such opportunities, recently successful startups like Hubble who help creative businesses find and share flexible offices to work in and WeArePopUp who help monetise empty retail space, would never have got far off the ground.
Furthermore, London has been touted as the crowdfunding capital of the world with Crowdcube and Seedrs leading the way. Anoo Rehncy, who recently quit her corporate job to co-found a luxury fashion line, BAW London, feels that such inventive methods of raising money could be really encouraging to a capital-intensive business.
But perhaps the greatest contribution of this government’s plan for business growth has been to give greater meaning to what it means to be in the pursuit of an ambition. An ambition driven not so much by money but driven by a sense of purpose. A belief that owning and directing a business is not just for fusty corporate suits or for the brash characters you might see on The Apprentice, but actually for people like you and I. People who have sacrificed their jobs and people like aunty Annie too.
You can see some of the UK startups that have backed the Conservatives plan here.