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Last Updated: Thursday, 12 August, 2004, 07:32 GMT 08:32 UK
Turning Brits into entrepreneurs

By Evan Davis
BBC economics editor

All parties say they want to boost the entrepreneurial spirit in the UK. But how can it be done?

Star Trek fans will always remember the famous moment from the movie 'Star Trek: Generations', when Captain Picard requests urgent assistance from his forerunner, Captain Kirk.

"I take it the odds are against us and the situation is grim," says Kirk, parodying the very film in which he appears.

"You could say that," replies Picard. "You know, if Spock were here," says Kirk, "he'd say that I was an irrational, illogical human being by taking on a mission like that. Sounds like fun!"

Well, no piece of dialogue better expresses the challenge of being an entrepreneur.

The odds are against you, and the situation is grim. But it's fun if you can get it to work.

Can Brits 'get up and go'?

UK START-UPS
Number of new business start-ups per 10,000 of population
UK 39
London 57
South-East 44
East of England 41
South-West 37
East Midlands 36
West Midlands 34
North West 33
Yorkshire and The Humber 31
Scotland 28
Northern Ireland 27
Wales 26
North East 21
Source: HM Treasury

The belief that, as a country, we should encourage people to accept the mission of setting up their own business, is now widely shared.

All successful economies - capitalist, socialist or mixed economy social democratic - have to harness the talents of people who have ideas and organisational acumen.

If there is one thing on which Gordon Brown and his main opponents can agree, it's the desirability of promoting a more entrepreneurial culture with a view to creating more small businesses.

Indeed, the chancellor has made it the most prevalent theme of his major speeches in recent years. For example, he recently spoke to the Institute of Directors, talking of "America's 'can do', 'get up and go', dynamic entrepreneurial culture".

And, he said, "we will be asking why a third fewer people in the UK say they are considering starting up a business compared to the US."

And the chancellor has good reason to be convinced that the country can do more to promote entrepreneurship.

Taking small steps

The variation in the number of start-ups in different regions of the country testifies to the fact that the "best" is a long way from the average.

Richard Branson
Any Richard Bransons out there?

Even excluding the outliers, like London, you can see from the table that if Wales could match the performance of South-West England, it would have 40% more business start-ups.

It's easy to identify the objective; less easy to find practical policies to promote new business formation.

How do you get the culture change the authorities think the country needs?

The government is planning a "week of entrepreneurship" scheduled for November, and a "city of entrepreneurship" (yet to be announced).

But these are small steps to the giant culture change the government wants.

Is commerce for lesser folk?

In our country, we seem to have an innate resistance to thinking of business as a route to wealth or status.

Young talented people have often seen the City, football or even the BBC, as a career of choice.

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Maybe it is something to do with the venerable British tradition that commerce is left to lesser folk, while true gentlemen tend to their land and go grouse shooting.

Maybe problems of over-regulation and stifling-bureaucracy inhibit the creation of new businesses.

Maybe it's hard for entrepreneurs to raise the money to get going, in a country where venture capital is a less established industry than in the US.

Overcoming these issues - or the many others that obstruct new businesses - will be a long slog.

Spock to Kirk: 'Live long and prosper'

Of course, business is not for everyone, and of course, it's a waste of national resources to entice unsuitable people into a hopeless business career.

And no-one should set up a firm thinking it's a sure win: Kirk is right - the odds really are against you. A third of new businesses fail within three years.

And according to research published by economist David de Meza in the 2002 Economic Journal, "in line with much psychological evidence, most people overestimate the chance of success. The bias is especially true of entrepreneurs."

Yes, Spock would be right to say you are illogical to think you can make it.

But you may be right to try. And the rest of us will benefit if you do.


Evan Davis currently works on a new BBC2/Sony joint production 'Dragons Den', which offers budding entrepreneurs the chance to make their business dreams come true. They will have the opportunity to pitch their business ideas to the 'Dragons', a selection of Britain's most succesful entrepreneurs for the chance to get the money they need to make their business dream a reality.

The BBC is searching for Britain's best new entrepreneurs to participate in the programme.

If you would like an application to appear in the series, please fill in the form below or call 09011 110825 (calls cost 25p).

Name
Your E-mail address
Your postal address
Your business in brief

The BBC may edit your comments and not all emails will be published. Your comments may be published on any BBC media worldwide.





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