GEM UK 2007 Report
13th May 2008
ENTREPRENEURSHIP: POSITIVE ATTITUDES AMONGST UK ADULTS NOT CONVERTING TO INTENT TO START A BUSINESS, SAY RESEARCHERS
Figures released today in the 2007 Global Entrepreneurship Monitor report for the United Kingdom suggest that despite a relatively favourable climate for start-ups , a general belief that there were many opportunities to start a business, and relatively high confidence in their own abilities, few British people expected to start their own business in the near future.
In 2007, 6% of working age adults in the UK were actively trying to start a new business or running their own new business. This rate was the same as the previous year. However, only 7% of Britons expected to start their own business in the next three years, compared with 17% in France, 13% in Italy, and 14% in the US. This was not due to lack of perceived opportunities or skills to start a business. For example, 39% of British adults though there were good opportunities to start a business, compared with 23% in France, 40% in Italy and 25% in the US. Similarly, 49% of Britons thought they had the skills, knowledge and experience to start a business compared with 34% in France, 51% in Italy and 48% in the US. Britons were also less likely to fear failure than their European counterparts.
Dr Rebecca Harding of Delta Economics, said: “Over half of people in the UK agree that starting a business is a good career choice and almost three-quarters of them agree that successful entrepreneurs have a high status in society. But the conversion rate from positive attitudes to entrepreneurship into positive intentions seems to be comparatively low.
Clearly, more work needs to be done to demonstrate the benefits of entrepreneurship to individuals, and the recent Enterprise Strategy signals an important intensification of effort in this area.”
The UK’s rate of necessity-driven entrepreneurship, at 0.6%, was the lowest of any participating G7 country, while its rate of opportunity-driven entrepreneurship (4.4%) was higher than that of France (2.2%) or Italy
(3.7%) but lower than that of the US (7.7%).
Commenting on the results, Dr Jonathan Levie of the Hunter Centre for Entrepreneurship at the University of Strathclyde, said “In 2007, much of Britain was near full employment. This, together with the comprehensive British social security system, explains the very low rates of necessity-driven entrepreneurship in the UK. Much of the gap in opportunity-driven entrepreneurship between the UK and the US can be attributed to higher formation rates of company-sponsored, rather than independent, start-ups in the US.”
Another feature of the GEM UK 2007 results was that differences in new business activity across the regions were much less marked in 2007 than in 2006, due to lower rates of new business activity in activity in London, the South East and South West regions. Professor Mark Hart of Kingston University said “Start-up rates in London and the South are usually somewhat higher than in the rest of the country. Prospective entrepreneurs in these regions may have been the first to detect a shift in the economic cycle, given London’s prominent role in the international financial services industry.”
There were also differences in female start-up rates across the different regions of UK, according to Professor Dylan Jones-Evans of Cardiff University
“This year’s GEM study shows that the South West of England had the highest level of female early-stage entrepreneurial activity in 2007 at 4.6%, whilst Northern Ireland had the lowest level of female entrepreneurship at 2.1%.
This may suggest that whilst the latest government proposals to boost female entrepreneurship are to be welcomed, there may need to be greater effort made within certain regions to close the gap between male and female entrepreneurial activity rates.”
The GEM research project in Wales is carried out by the National Entrepreneurship Observatory, a joint project between Cardiff University and Glamorgan University. The results of the study will be discussed in detail at a research and policy conference to be held in Cardiff later this week, where leading policymakers from all over the UK will be examining the impact of enterprise on different regions, including Wales.
