Finally some good news! This week Boris announced that the Post-Study Work visa will return in 2020. As my colleague Sam Dumitru wrote in City AM: "It is hard to think of a more short-sighted and self-destructive policy than Theresa May’s decision in 2012 to close the Post-Study Work visa route for those wanting to live and work in Britain."
It may not be immediately obvious why the return of the Post-Study Work visa is such a boon for entrepreneurship in the UK. After all, this was a visa that let foreign graduates stay for two years working for someone else – not themselves. However, delving into the stories of Britain’s top immigrant entrepreneurs reveals the importance of this route. Business ideas don’t come ready-formed upon graduation. A bit of experience goes a long way. Giving graduates the time they need to research and develop their business idea is essential and the Post-Study Work visa did exactly that.
Back in 2015 we surveyed international students with the National Union of Students, finding that 42% of international students intended to start up their own business following graduation. On the back of this, Made in the UK called for the return of the Post-Study Work visa. It's only taken four years to get what we want!
May’s decision to end the Post-Study Work visa put UK universities on the back foot compared to our global competitors. In our survey, only 18% of international graduates studying in the UK thought we had better post-study processes in place for international students than other countries.
We recently took a dive into the crème de la crème of Britain’s fastest growing companies in our Job Creators: The immigrant founders of Britain’s fastest growing businesses report. With support from Sukhpal Singh Ahluwalia, we looked at where the founders of these high-growth companies came from. It revealed that while 14% of UK residents are foreign-born, 49% of the UK’s fastest-growing startups have at least one foreign-born co-founder.
Many of the entrepreneurs moved to the UK to study at one of our world-leading universities. For instance, the co-founders of Oxford Space Systems, Vincent Fraux and Juan Reveles, both came to the UK to study. Their Top 100 company develops innovative deployable antennas and structures for space, employs over 35 people, exports to the US, Europe and Asia, and invests heavily in research and development to create intellectual property. Fraux thought the UK made a mistake by withdrawing the Post-Study Work Visa, “resulting in international students with potential leaving the UK right after finishing their degree.”
Miguel Martinez is the co-founder and Chief Data Scientist of Signal AI, a fast-growing UK company that analyses, in real-time, millions of news articles per day in order to improve the quality of business intelligence and decision making across organisations.
This Top 100 firm has grown from 3 people in a London garage to over 120 people in the UK, US and Asia, raising around $30m in the process. Miguel came to the UK from Spain to study for a PhD at Queen Mary’s University. Prior to today’s announcement he voiced his frustration at the UK’s irrational approach to post-study work, saying: “We are basically training the best people in the world, paying for part of their PhD with taxpayer’s money and then telling them they have to leave the country the moment they finish.” He welcomed the return of the Post-Study Work visa on Twitter.
With the presumed ending of free movement, more must be done if we are to create a visa system fit for attracting the world’s best entrepreneurs. A priority should be making the Innovator Visa, which had just two successful applications in the last quarter, fit for purpose. This is the visa anyone on the relaunched Post-Study Work visa will need to move onto if they decide to start a business. The Government should also consider allowing people to be self-employed on the new version of the Post-Study Work visa, giving them time to test out their ideas before starting a company through the Innovator route.
But, after years of criticising successive governments on this issue, it would be churlish not to take a few days off to give credit where it’s due. At a time of political polarisation, much of the credit for this change should be awarded to the Conservative’s Jo Johnson MP and Labour’s Paul Blomfield MP. Their cross-party efforts have paid off. As Johnson wrote in the foreword of Job Creators: “A global Britain embraces the aspirational values of international talent.”
(I've written for ConservativeHome on why letting overseas students stay to work is right, and opens up new opportunities for our economy.)
Sage Advise
Freelance writer Sabuhi Gard is looking for case studies for a guide she is producing for Sage on importing and exporting. The businesses need to employ around 50 to 100 staff. She wants to know about your export strategies and advice that could be given to other small businesses in the shadow of Brexit. You can drop her an email here.
Visas, Vitalik & Gender Equality Paradox
Visa concerns deter foreign-born PhDs from working in startups
Suggested by Sam Dumitriu, Research Director, The Entrepreneurs Network
A survey of over 2,000 US PhD students reveals that foreign-born PhD graduates with science and engineering degrees from American universities apply to and receive offers for technology startup jobs at the same rate as US citizens, but are only half as likely to actually work at fledgling companies. The problem? The high costs of sponsoring immigrant workers puts startups at a disadvantage compared to established firms such as Google and Facebook.
The researchers also found that foreign-born PhD students had a higher risk tolerance and a lower-preference for high pay than native-born PhD students. A larger follow-up study just released finds that foreign-born PhD students have greater entrepreneurial intentions and are more interested in commercialising research than US-born PhD students, but start businesses at a lower rate. The authors blame the US visa system again.
While the above study is focused on the US, it fits with our research on the UK. Our Job Creators report found that half of the UK’s fastest growing companies have at least-one immigrant founder. One of the report’s case studies was Miguel Martinez, co-founder of Signal AI. He started the company during the last year of his PhD. He recently told us that if he wasn’t an EU citizen, starting a company would have violated the terms of his student visa.
Vitalik Buterin on effective altruism, better ways to fund public goods, the blockchain’s problems so far, and how it could yet change the world
Suggested by Philip Salter, Founder, The Entrepreneurs Network
"Blockchains as they currently exist are in many ways a joke, right?” is something you wouldn't expect the co-founder of Etherium to concede. But Vitalik Buterin is the kind of person who defies expectations. Despite the reservations, in the latest 80,000 Hours podcast Vitalik still makes a bullish case for the blockchain – both the extent to which it’s actually helped people in developing countries move money around, and the potential deployment of blockchain applications outside of cryptocurrency.
Vitalik's views are insightful beyond blockchain though. To pluck one quote more or less at random, here he is on the threat of nuclear war. "A lot of problems become easier when you stop living in cities. Like in the nuclear case, I did the math once and if you spread out everyone equally across the entire earth’s surface then 7.6 billion people divided by 150 million square kilometres of land mass gives you 51 people per square kilometre and at that rate nuclear bombs become a less cost-efficient way of killing people than hiring samurais to run around with swords."
Listen to or read the whole thing. The host, Robert Wiblin, gives a useful introduction to anyone unfamiliar with the basics of blockchain at the start.
Part-time jobs help women stay in paid work
Suggested by Annabel Denham, Associate Director and Head of the Female Founders Forum, The Entrepreneurs Network
The gender equality paradox – recently articulated by Nima Sanandaji in his work on the Nordic Glass Ceiling – takes on a new significance in this Economist article examining the limitations of part-time work. Three-quarters of working women in Holland are part-time, and while the nation is often lauded for its work-life balance and contented children, these “come at a price”.
Just as Sanandaji has brought to light the aspects of Nordic social policies which have negatively affected some women’s career progress, so the Netherlands has the largest gap between men and women’s monthly income and pension entitlements across all western European countries. As with the gig economy or zero hours contracts, part-time work can be a welcome alternative to women leaving the labour market altogether.
Interestingly, median hourly pay for part-time employees was 4.4% higher for women than for men – but this will not compensate for the article’s finding that part-time jobs pay less per hour than full-time ones. “Part-timers are more likely to have a ‘bad’ job – one offering little training and few legal rights.” And crucially, even men face a dilemma: their requests to work part-time “are more likely to be rejected. And those who do work part-time risk discrimination.” Until we do away with these double standards, “many couples will still choose to scale back her career, rather than his”.
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Letting students stay and work for 2 years after graduation will boost entrepreneurship
In light of today’s announcement that the government will reinstate the Post-Study Work Visa and allow international students to stay and work in the UK two years after they’ve completed their studies Sam Dumitriu, Research Director at The Entrepreneurs Network and author of the report Job Creators: The immigrant founders of Britain’s fastest growing businesses, said:
“This is long overdue. The UK’s world class universities draw in the best and brightest from across the world. Yet, for the past 7 years we’ve been kicking out skilled graduates if they can’t find an employer willing to go through the expensive and time-consuming process of sponsoring their visa in just 4 months. It is woefully short-sighted.
“Our research found that half of the UK’s 100 fastest growing businesses have at least one foreign-born founder. The vast majority of these immigrant founders told us they came to the UK in the first place to study and were only able to stay because of the Post-Study Work Visa or EU Free Movement. With Free Movement set to end, restoring the Post-Study Work Visa is an essential pro-entrepreneurship policy.”
Right Thinking
As an entrepreneur told me this morning, "we need a national endeavour, and one, unlike Brexit, that doesn't split the country down the middle." A good place to start could come from a new paper: Reviving Economic Thinking on the Right.
The authors are Sam Bowman, former Executive Director of the Adam Smith Institute (and one of our Advisers), and Stian Westlake, former adviser to three science ministers and co-author of Capitalism Without Capital. Though written with the Conservative Party in mind, the ideas could just as easily be picked up by any of the major parties.
Sam and Stian set out a set of policies in four areas where they think progress can be made: tax, housing, infrastructure and devolution, and innovation and technology.
All these areas impact entrepreneurship: whether in badly designed taxes disincentivising investment; damaging regulations pushing up the costs for entrepreneurs and their employees; poor infrastructure stimiying growth; or mistargeted funding and regulations limiting innovation.
Some of the ideas might seem quite niche – such as creating a new cross-sector sandbox authority – but taken together they could be the skeleton of an economic agenda that would be transformative.
As the paper concludes: "Conservatives would do well to remember the distinction that Margaret Thatcher made between policies that are popular in themselves, and policies that have popular results. The political benefits of the former are immediate, but often short-lived. But it is policies with popular results that change a country for the better, and which underpin long-term political success. An understanding of what is going on with the economy and how public policy can make it work better for the country is crucial for coming up with these policies."
Whatever you think of Thatcher – or Blair, Attlee, Churchill or Lloyd George, for that matter – this distinction is the mark of proper leadership.
Bittersweet Movements
Jo Johnson's resignation was bittersweet: it was heartening to see a principled politician putting the national interest ahead of their personal ambitions, but a huge pity that another of the country's most capable politicians has stepped away from public service.
Johnson wrote the foreword for our immigrant founders report (which incidentally was just featured in this Guardian article). We asked him to get involved because like us he believes in bringing back the Post-Study Work visa, which would mean holding onto more of the best and brightest international students. Not only did he read our draft report at length, he also offered valuable insights on the report's policy asks. There are too few policy experts across the House of Common – if MPs like Jo Johnson, David Gauke and Sam Gyimah aren't MPs in Parliament after the next election, we will all be poorer – both metaphorically and literally – for it.
Jog On
As my colleague Annabel Denham explains: "We are just a few weeks from the launch of our new Female Founders Forum report. To jog the memory on how we are trying to shape policy to ensure more women-led businesses can start and scale, look no further than our two previous reports. Untapped Unicornswas one of the first studies to shine a spotlight on the gender funding gap – which is now getting the attention it deserves – and was quoted in the HM Treasury review into female entrepreneurship earlier this year.
Mentoring Matters addressed access to role models and mentors – both deemed vital to ensuring more women start and scale businesses. This year we are turning attention towards leadership – building a culture, managing crises, and when scaling a business."
Find out more about what's going on for female founders here, and sign up for the quarterly email here.
Read the whole e-bulletin here, and sign up to receive more here.
Female Founders Forum: Future Leaders
A week is a long time in politics and this one will surely pass more slowly than most. My hope is that the Female Founders Forum quarterly newsletter can offer a welcome respite and encouragement on the state of (female) entrepreneurship here in Britain.
We are just a few weeks from the launch of our new Female Founders Forum report. To jog the memory on how we are trying to shape policy to ensure more women-led businesses can start and scale, look no further than our two previous reports. Untapped Unicorns was one of the first studies to shine a spotlight on the gender funding gap – which is now getting the attention it deserves – and was quoted in the HM Treasury review into female entrepreneurship earlier this year. Mentoring Matters addressed access to role models and mentors – both deemed vital to ensuring more women start and scale businesses. This year we are turning attention towards leadership – building a culture, managing crises, and when scaling a business.
Our most exciting news from the last few months is the addition of fantastic new members to the FFF.
– Mums in Technology Founder June Angelides is one of the most influential women in tech. She is chair of The Future Skills Programme, a founding Ambassador of the FiftyFiftyPledge, and a VC at Samos Investments.
– Tania Boler, co-founder of Elvie, is restoring pelvic floors and giving women the confidence to pump in public. Any concerns femtech founders may have that VCs won’t invest in female-focused firms can look no further for inspiration.
– Erika Brodnock is founder of Karisma Kidz, multi-award winning entrepreneur, Sky News parenting expert and NED at Fundamentally Children.
– Alex Daly is on the coalface, leading the industry taskforce charged with implementing the Rose Review, mentoring five other women, sitting on the APPG for Women and Enterprise, all while running AA Advisors.
– Julia Elliott Brown is taking a practical approach to ensuring women-led businesses get the finance they need to scale with her second business, Enter The Arena.
– Annabel Karmel is helping mothers across the nation nourish their children with her extensive range of cookbooks, foods and recipes.
– Mumsnet founder Justine Roberts CBE surely needs no introduction.
Since our last email, we have also held roundtables across the country, written articles for national media, and banged the drum for female entrepreneurship at external events. Here’s what you may have missed.
May. The ONS released figures showing that the UK has more women in work than ever before. Now 71% of women are in work, compared to 65% in 2010 (though part of the leap can be accounted for by changes in the women’s pension age).
June. Japan’s Labour minister was widely ridiculed for declaring that it is “necessary and reasonable” that women wear heels in the workplace. In Switzerland, thousands of women protested against the slow pace of correcting inequalities between the sexes. More positively, here in the UK it was found that more women than ever are at the top of UK companies. Statistics released by the government commissioned Hampton-Alexander review found that as of 1st June, 32.1% of FTSE100 board positions were held by women.
July. We held three roundtables centred around gender-specific issues in entrepreneurship. Our Female Founders Forum roundtable in Edinburgh addressed leadership challenges. A roundtable with Virginie Charles-Dear addressed the funding gap. (Charles-Dear is founder of toucanBox, one of the UK’s top 100 fastest-growing businesses.) And, we held an event in Parliament with the Rail Delivery Group to discuss rail fare reform, that would reduce exorbitant rail fares for female founders working flexibly. Baroness Kramer, member of the APPG for Entrepreneurship, was keynote speaker, and I wrote about the gender commuting gap for the Telegraph. If you would like to get involved in the campaign for fair fares, do get in touch.
The month also saw a seismic shift in interest in women’s football. A record billion viewers tuned in, suggesting the gender imbalance can still be redressed. With the sponsorship received and increasing fan numbers, the Barclays FA Women’s Super League is set for a big year.
August. The Entrepreneurs Network released Future Founders: Understanding the Next Generation Entrepreneurs, which found that while 57% of young people cannot name an entrepreneur who inspires them, 85% of those who can list a man. The most commonly-named female founder was Kylie Jenner. While her success in a competitive industry is commendable, I wrote for the Telegraph that we need more diverse role models to inspire the next generation. We found that while Generation Z men and women have thought about starting businesses at similar rates, men are almost twice as likely to have started one (11% to 6%).
And the release of GCSE results was cause for celebration. Not only did over 800 students receive 9s across the board, but the data show that boys and girls are shunning subjects traditionally associated with their gender. There was a 14% increase in the number of girls studying computing, and they are performing better in STEM subjects than historically. The number of female students taking A-level exams in sciences overtook males for the first time ever this year.
Subscribe to the Female Founders e-bulletin here.
Facebook, Scurvy & Female Brains
7 Things Netflix’s ‘The Great Hack’ Gets Wrong About the Facebook, by Alec Stapp
Suggested by Philip Salter, Founder, The Entrepreneurs Network
Cambridge Analytica's overblown marketing claims have been co-opted by its critics to overstate the company's influence. Although Netflix's The Great Hack tells a compelling story, it's not a true story. The film wildly overstates the significance of the scandal in both the 2016 US presidential election and the 2016 UK referendum on leaving the EU.
Targeted campaigns based on personality type don't seem to work (Cambridge Analytica didn't even have the data to do this properly) – if they did Ted Cruz would be President – and as yet there is no evidence that Facebook data were used in the Brexit referendum. "The truth is much more mundane: the Facebook-Cambridge Analytica data scandal was neither a 'hack' nor was it 'great' in historical importance," explains Alec Stapp. If we want to understand Trump and Brexit, we'll need to dig a little deeper than Netflix.
Scott and Scurvy, IdleWords.com
Suggested by Sam Dumitriu, Research Director, The Entrepreneurs Network
Scurvy is a deeply unpleasant and potentially fatal disease. The good news is that it’s cure is simple: restore Vitamin C to the diet. In 1749, Scottish Physician James Lind proved in medical experiments that eating citrus fruits could halt and reverse the condition. By the 19th Century it gave the British navy a massive strategic advantage. Yet by the second half of the 19th Century the cure was lost. As blogger Maciej Cegłowski puts it: “The story of how this happened is a striking demonstration of the problem of induction, and how progress in one field of study can lead to unintended steps backward in another.”
There’s a positive message too: “One of the simplest of diseases managed to utterly confound us for so long, at the cost of millions of lives, even after we had stumbled across an unequivocal cure. It makes you wonder how many incurable ailments of the modern world—depression, autism, hypertension, obesity—will turn out to have equally simple solutions, once we are able to see them in the correct light.”
The Truth About the Female Brain, by Saloni Dattani, UnHerd
Suggested by Annabel Denham, Associate Director and Head of the Female Founders Forum, The Entrepreneurs Network
If it's the truth we want, intellectual debates must take place in public and conducted in good faith. Just consider the tortured nature/nurture debate. Psychiatric geneticist Saloni Dattani has written a sharp critique of Gina Rippon’s book The Gendered Brain, arguing Rippon cherrypicks evidence to bolster her argument.
Rippon’s conclusions are borderline contradictory: she concurs that the brain "may start out on a fairly standard trajectory but can then be diverted by quite small shifts” due to “different events or experiences”. But Rippon also makes “wild leaps in reasoning and frequent insinuations that when sex differences are not apparent at birth, they cannot be innate”. This includes a difference in the behaviours of 13-18 week old babies vs newborns. Saloni expands on these thoughts in a podcast for Rationally Speaking.
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Couped Up
While not quite the coup some people claim, prorogation is certainly a tactic to stop Parliament ruling out a no-deal Brexit. Parliamentarians in opposition to no-deal still think it can be thwarted, although if it's true that Number 10 is considering wacky measures such as creating new bank holidays, in a matter of weeks we may be close to something more like a constitutional crisis.
Boris Johnson is taking a huge gamble. Though he's the one rolling the dice the man trying to load them is the Rasputin-like figure of Dominic Cummings. If you only read one thing about him, make it this article by Tom Chivers. In essence, Chivers thinks Cummings is aping something akin to Nixon's Madman Theory of international relations in the hope that being seen as uncompromising and erratic forces your opponent to compromise.
Chivers explains that this approach is only credibly when both sides have a lot to lose (like the US and Soviet Union). In the case of Brexit: "There are worse outcomes for the EU, such as other countries seeing that they blinked first and trying similar strategies to get favourable deals from them. It may be that no-deal is the least bad option available for them if Britain commits to it."
The worry is that "Cummings isn’t playing some clever John von Neumannesquegame, but driving his Fiat down the rails and expecting a train to swerve."
Public Knowledge
PUBLIC is a great organisation that helps startups solve public problems, and it has a report out on how new technologies will shape the future of the UK's geospatial sector. The Future Technologies Review will be of interest to anyone in technologies such as artificial intelligence, drones and Internet of Things.
TMI!
One of the main reasons I love my job is that I get to meet some really smart people. Whether it's my colleagues, entrepreneurs, academics, experts, or even the odd politician, a lot of my life involves learning from people who are the best in the world at what they do.
But like everyone, I suffer from too much information, which is why I rely on a network of brilliant people to point me in the right direction. This e-bulletin is an attempt to distill some of this information.
However, I think we are missing a trick. That's why we are starting another e-bulletin that will simply consist of three brilliant people giving you a paragraph telling you the best thing that they've recently read and why. The contributors will rotate every week and the subject matter will broadly focus on entrepreneurship, innovation and ground-breaking ideas across all the sciences. I hope some of you will want to contribute.
It's an experiment – even its name is a work in progress. Sign up to our Innovation Update – the pithy Tuesday update from three smart people about what you should be reading – here.
This will be our fifth e-bulletin (thankfully they don't all go every week!). The other e-bulletins we have are:
Policy Updates – An ad hoc update of policy changes that will impact you business –Sign Up Here
APPG for Entrepreneurship Digest – A monthly roundup of Parliamentary debate and activities related to entrepreneurship (only sent when Parliament is sitting) Sign Up Here
Female Founders Forum – A quarterly update about what's going on for Female Founders – Sign Up Here
Part of the reason for producing so many e-bulletins is to save you time. If you're mostly interested in how policy changes will impact your business on a very practical basis, subscribe to the Policy Updates and unsubscribe from everything else. However, if politics is your gig, the APPG Digest might be the most relevant.
Touch BEIS
Every week I get detailed emails from the Department of Business, Energy and Industrial Strategy (BEIS) setting out their planning around a No Deal Brexit. It doesn't make for fun reading. If any of you voted to leave for less regulation, I'm afraid I might have some bad news for you.
Anyway, in not entirely unrelated news, here's one thing that BEIS is asking businesses that only trade with the EU to do in preparation for a No Deal exit:
Apply for an EORI number if you're not VAT registered. You need this to move goods into or out of the EU (including the UK). If you do not get one, you may have increased costs and delays. HMRC has very sensibly decided to automatically give all VAT-registered firms an EORI number in the next two weeks.
Consider registering for TSP. Transitional Simplified Procedures will make importing goods easier for the initial period after the UK leaves the EU. Traders registered for TSP will not need to make full customs declarations at the border and will be able to defer paying their customs duties.
Confirm you can complete each data field in the Declaration.
Agree responsibilities with your customs agent and logistics provider for each part of the process and update your contracts to reflect this.
Identify software for submitting documents, if you do not use a customs agent.
It's impossible to pass on the way a No Deal Brexit could impact each and every area of your business. However, if you have any burning questions about the impact of a No Deal Brexit – whether that's tariffs, visas, intellectual property, or whatever – let me know, and I'll ask some experts on your behalf. I may post some of these anonymously next week.
Of course, we still might not get a No Deal Brexit – but that's complicated.
Loose Movement
One thing that will be concerning for many is the Home Secretary's promise to end Free Movement if we leave without a deal. However, as Jonathan Portes, Sunder Katwala and Joe Owens all explain, this promise is either meaningless or unachievable. It doesn't make the announcement any less concerning, so back in the real world we are hosting a roundtable with Kingsley Napley on Thursday that may help you clear up some of the uncertainties for you and your employees (see below).
Channel 4 You
Would you be happy to go on Channel 4 to talk about your business spending dilemmas in exchange for free financial advice? I can't think of anything worse, but I suppose it might be useful and could help promote you and your business. Contact Firecracker Films at money@firecrackerfilms.com or on 07494 405759) if you want to find out more.
Findings Nima
On Wednesday, NatWest's Accelerator hosted us and the prolific author Nima Sanandaji for an event on Brain Business Jobs – that is, the jobs in sectors with a high proportion of knowledge-intensive occupations.
Nima has measured this across 31 countries and 278 regions. He finds that 8% of the UK working age population are employed in knowledge-intensive sectors, which put us highest among large European economies, but lower than Switzerland, Sweden, Denmark, Netherlands and Luxembourg.
In terms of intensity, the leading regions of the UK are Berkshire, Buckinghamshire and Oxfordshire (17.9%), London (17.3%), North Eastern Scotland (11.3%), while the lowest are Cornwall and Isles of Scilly (3.4%), East Anglia (3.2%) and West Wales and The Valleys (3.2%).
This is a good news story for innovation and entrepreneurship in the UK. So what's driving these knowledge-intense jobs? Nima finds that innovation capacity is the dominant determinant for their concentration. Innovative capacity is the ability of a country to produce and commercialise a flow of innovative technology. Clearly there's a lot that goes into this – perhaps most critically R&D spending, the intellectual property regime, and the education system. There's room for improvement, but we shouldn't forget to celebrate our successes.
We're working with Nima to drill down further into his dataset. If this is the sort report you would be keen to support or get involved with, just let me know.
Bright Future
It's a sign of the times when an Instagram influencer's story leads to more people seeing your report than an article in national paper. But whether you heard about our Future Founders report as one of Grace Beverley's 1 million followers, or Octopus Group's Simon Rogerson's article in City AM, or via the excellent James Hurley in The Times (paywall), or on the Financial Times's Sifted site, or the 101 other places it appeared, we hope you enjoyed our report that we undertook with Octopus Group on the entrepreneurial ambitions of young people. If somehow you missed it, here it is.
Total Package
Nesta has a new study out on the incentives for FTSE 350 executives. It suggests that remuneration packages are dominated by measures that inhibit corporate innovation.
It finds that just 16% of total FTSE 350 annual bonus conditions encourage spending on innovation compared to 39% that discourage it. The report recommends that companies examine their remuneration packages to encourage the pursuit of innovation and long-term value creation. While investors are encouraged to use their power to demand better incentives for investment in innovation.
The takeaway question for a business owner of any size is: how do you incentivise innovation?
Party Time
As part of the Female Founder Forum project we run with Barclays, we will be in Brighton at the Labour Party Conference on 23rd September, and in Manchester for the Conservative Party Conference on 30th September. Don't worry if you don't have a conference pass – we are hosting our events outside the secure zones.
Watch this space, or drop us an email to register your interest. Also, please forward this on to anyone who lives in or near either city who might want an invite.
#FutureFounders
Today we've released an important report uncovering the entrepreneurial ambitions of Britain's next generation.
Authored by Sam Dumitriu, in partnership with Octopus Group, and based on a survey of 1,549 young people, Future Founders: Understanding the Next Generation of Entrepreneurs reveals that 51% of British young people aged 14-25 have thought about starting (or have already started) a business. A further third (35%) are open to the idea and just 15% rule it out altogether.
(If you're in a rush we have a Twitter thread here with some of the main findings).
The main barrier to starting a business was “not knowing where to start” (70%). Just two in five (38%) 14-25 year olds say that their education has given them the skills they need to start a business, compared to a quarter (26%) who say it has not. Half of respondents currently studying at university (51%) or currently studying business (55%) say that their education has given them the skills they need to start up – significantly more likely than non-university graduates, or those studying other subjects. However, this falls to 39% when students graduate, suggesting that some knowledge isn’t transferring from the classroom to the real world.
Women make up just a fifth of UK entrepreneurs, and the survey suggests a lack of role models could also present a significant barrier. 57% of young people could not name an entrepreneur who inspires them. Of those that could, 7.9% named Lord Sugar, 6.5% said Richard Branson, and 2.6% named Elon Musk. Kylie Jenner was the most commonly named female entrepreneur (just 1.1%). Further – half of young men could name an entrepreneur who inspires them, but only a third (35%) of women could do the same. Of the entrepreneurs who were named, 85% were male.
Past research shows that role models have a greater impact when they are relatable. Closing the gender gap and drawing on a wider range of entrepreneurial talent will require us to champion a more diverse range of entrepreneurs.
But we may also need to change attitudes towards failure if young women – and men – are to create the firms of the future. According to our report, 71% of women and 63% of men cite fear of failure as a barrier to starting up a business.
It has already got a fair amount of press coverage:
FT Sifted
"A member of Gen Z, Jack Cornes started his first business at age eight, selling vegetables from his grandmother’s garden. By the time he was 14 he had founded an online t-shirt business that was shipping to the US and Australia. Now, age 21, he has just raised £210,000 for his six-person startup HausBots, which makes climbing robots that automate the painting of walls..." Read Maija Palmer's whole article here.
The Times
"Young men are almost twice as likely as young women to have started a business, despite similar levels of desire to do so, according to research that highlights barriers to entrepreneurship..." Read James Hurley's whole article here.
City A.M.
"Every entrepreneur has a story of past failure that they’re not afraid to share. I’m no exception. Back in 2010, when Octopus began investing in film production companies, we turned down the opportunity to invest in a small British film called The King’s Speech, which went on to gross £250m worldwide and win four Oscars. Instead, we invested in Burke & Hare, an “edgy” horror-comedy that lost money at the box office and was labelled “unpleasant drivel” by Hollywood Reporter..." Read Simon Rogerson's whole article here.
#FutureFounders
It would be amazing if you could share any thoughts you have about the report with the hashtag #FutureFounders. On Twitter (@tenthinktank & @OisforOctopus), Facebook, LinkedIn and Instagram.
Half of Young Brits Want to Start a Business
Today we release Future Founders: Understanding the Next Generation of Entrepreneurs – a report in partnership with Octopus Group. The report finds 14-25 year olds are entrepreneurially ambitious, though fear of failure and lack of role models present significant barriers
Based on a ComRes survey of 1,549 young people, is finds:
51% have thought about starting (or have already started) a business. A further 35% are open to the idea and just 15% rule it out altogether.
The main barriers to starting a business were “not knowing where to start” (70%) and fear of failure (68%). Women (71%) were more likely to cite fear of failure as a barrier than men (63%).
57% of British people aged 14-25 cannot name an entrepreneur who inspires them.
Of those who were able to name an entrepreneur, just 15% named a female entrepreneur.
Alan Sugar and Richard Branson topped the list, while the most popular female entrepreneurs were Kylie Jenner and Grace Beverley (an Instagram influencer with a fashion line).
The report finds that university education clearly influences entrepreneurial ambition: 65% of young people attending university have thought about starting (or have already started) a business, compared to just 53% of 18-25 year olds who didn’t go to university.
A desire to “be your own boss” (86%) and the “freedom to do what I want” (84%) were the top motivations for 14-25 year olds who have thought about starting companies. Wanting to be famous was the least popular motivation (40%).Exposure to entrepreneurship is a key driver of entrepreneurial intention. 68% of young people who have a family member or friend who is a business owner say this has made them more likely to consider starting a business.
Future Founders: Understanding the Next Generation of Entrepreneurs, has reveals that 51% of British young people aged 14-25 have thought about starting (or have already started) a business. A further third (35%) are open to the idea and just 15% rule it out altogether.
Though young people today show greater aspirations to become entrepreneurs than previous generations, this doesn’t always translate into the creation of new businesses. To support and nurture the next generation of entrepreneurs, policymakers need to grasp their motivations, ambitions and fears. The Entrepreneurs Network and Octopus Group commissioned ComRes to poll over 1,500 young people (aged 14-25) to better understand what they think about entrepreneurship and how different aspects of the education system affect entrepreneurial intentions.
Barriers to Entrepreneurship
The main barrier to starting a business was “not knowing where to start” (70%). Just two in five (38%) 14-25 year olds say that their education has given them the skills they need to start a business, compared to a quarter (26%) who say it has not. Half of respondents currently studying at university (51%) or currently studying business (55%) say that their education has given them the skills they need to start up – significantly more likely than non-university graduates, or those studying other subjects. However, this falls to 39% when students graduate, suggesting that some knowledge isn’t transferring from the classroom to the real world.
Women make up just a fifth of UK entrepreneurs, and the survey suggests a lack of role models could also present a significant barrier. 57% of young people could not name an entrepreneur who inspires them. Of those that could, 7.9% named Lord Sugar, 6.5% said Richard Branson, and 2.6% named Elon Musk. Kylie Jenner was the most commonly named female entrepreneur (just 1.1%). Further – half of young men could name an entrepreneur who inspires them, but only a third (35%) of women could do the same. Of the entrepreneurs who were named, 85% were male.
Past research shows that role models have a greater impact when they are relatable. Closing the gender gap and drawing on a wider range of entrepreneurial talent will require us to champion a more diverse range of entrepreneurs.
But we may also need to change attitudes towards failure if young women – and men – are to create the firms of the future. According to our report, 71% of women and 63% of men cite fear of failure as a barrier to starting up a business.
Recommendations
The findings of Future Founders will feed into the government review, led by The Prince’s Trust, examining how best to tackle the barriers facing the UK’s aspiring young entrepreneurs. We have raised a number of issues for policymakers to consider:
Britain’s youth are more likely to be motivated by the desire to be independent or to work on something they are passionate about, than by a desire to get rich quick. This should inform the way educators talk about entrepreneurship. Teachers could, for example, discuss with pupils how entrepreneurship can be used to solve pressing social problems.
Exposure to entrepreneurship is a key driver of entrepreneurial intention. 68% of young people who have a family member or friend who is a business owner say this has made them more likely to consider entrepreneurship as a career. Policymakers should therefore champion the work of organisations that aim to bring founders into schools, such as Founders4Schools, Girls in Charge Initiative, and Young Enterprise.
In addition, creating a safe space for young people to experiment with starting a business might help build confidence and knowledge, while reducing the fear of failure.
The government should champion schemes such as the Peter Jones Foundation’s Tycoon Enterprise Competition, where students are lent money to build businesses, but only have to pay it back if they breakeven, allowing them to try entrepreneurship in “a safe and controlled environment”.
Commenting on the report, Simon Rogerson, CEO and co-founder of Octopus Group, says:
“It’s in everyone’s interest to break down barriers to entrepreneurship. Entrepreneurs drive economic growth, create jobs and solve many of society’s problems – but to do this we need a diverse pool of talent and ideas. That’s why it’s critical to ensure that we give the next generation of innovators every opportunity to realise their ambitions.
“Starting a business is as much about your mindset as it is about the idea – and it can seem like a big leap of faith. That’s why it’s so important for young people to have access to mentors and relatable role models. They can make the impossible seem possible and help overcome that fear of failure.”
Sam Dumitriu, Research Director at The Entrepreneurs Network and author of Future Founders, says:
“Over half of under 25s see entrepreneurship as a real option, but entrepreneurial intentions often don’t lead to the creation of real businesses. Understanding the motivations, intentions, and barriers faced by young people is vital to widening the pool of entrepreneurial talent. In particular, the polling highlights the potential for closing the gender gap in entrepreneurship by raising the profile of female founders as role models.”
The Science Bit
"We're going to turn the UK into a supercharged magnet, drawing scientists like iron filings from around the world."
As expected, Boris is striking a very different tone to his predecessor when it comes to innovation and immigration, vowing to supercharge UK science. Yesterday, at the Culham Science Centre in Oxfordshire and later on Facebook, he announced that the Government will create a new fast-track visa system to attract the world's leading scientists and scrap the 2,000 a year cap on the Exceptional Talent visa.
Only a fraction of the Exceptional Talent Visas for scientists are actually being used, so getting rid of this cap isn't enough in itself. A lot goes into making a successful visa route – just look at how badly the new Start-Up and Innovator visas have been implemented.
And, ultimately, this goes nowhere near offsetting the loss of free movement with the EU, which makes it logistically very easy for scientists to work in other EU countries. Sure, there are challenges with setting up bank accounts and countless other micro-annoyances, but this visa will have to be very fast and convenient to avoid putting some scientists from coming here.
The other key advantage of free movement is a sense that people feel they have a right to live in another country and that they're welcome to build a life there. On the evening of the Referendum result, I was on a boat in the Thames with a hundred or so young, talented immigrants who were supposed to be celebrating a summer party for the world's largest youth led charity at which they worked or volunteered. The mood was that of a funeral – many felt that they were no longer wanted.
Boris is right to try to overturn this public relations disaster. He is lucky that Britain is a world-leader in science, technology and entrepreneurship, and that this won't change any time soon. But we're 83 days out from a Hard Brexit, and we don't have the institutions, funding agreements and regulatory frameworks in place to cushion the scientific community from what will be a nasty shock.
The Main Event
Continuing the theme of supercharging the economy, on Wednesday morning we have the brilliant and prolific academic Dr Nima Sanandaji speaking at what will be an optimistic lecture on knowledge-intensive jobs in the UK. These are the jobs that are crucial for income and productivity growth. Just let me know if you want to attend and feel free to share with your friends and colleagues.
Lost Einsteins
Nicole Kobie considers a much-discussed issue over at Wired. It's more of a statement than a question:The UK's startup founders are way too posh. Here's how to fix that.
I have doubts about some of the evidence she cites, including The Sutton Trust's Elitist Britain report, which uses the Richtopia 2017 list as representative of successful entrepreneurs. Two of the main things that go into Richtopia's rankings are social media profiles and regular media coverage, which allows lots of non-entrepreneurs to sneak in.
However, there are plenty of data to back up her concerns. Kobie also cites the top research of Raj Chetty and John Van Reenen which shows that children who do well in maths are likely to become inventors, but only if their family is wealthy: "Indeed, children with parents in the top one per cent in terms of income were ten times as likely to become inventors than those who grew up in the bottom half in terms of wealth."
My colleague Sam Dumitriu is quoted in the article: "One of the things we're finding is that people who have become entrepreneurs are more likely to say that at school level it was talked about more often, or that they know someone who is an entrepreneur."
Sam is referencing a research report we're launching on Monday in partnership with Octopus Group, looking at the views and knowledge of young entrepreneurs. I'll be sending through more details about the report on Monday afternoon, but let me know if you would like me to email you a copy when it launches first thing on Monday morning.
Press Coverage: Job Creators
Our new Job Creators report has been featured widely in the media. The Financial Times ran a page two story, titled: “Migrants drive UK’s fastest-growing companies, study finds”. The report’s author, Sam Dumitriu, wrote an op-ed for CapX (“The vital role of immigrants in start up Britain”). “At a time of rising pessimism about the UK economy, a vibrant startup scene attracting record levels of venture capital investment is a rare bright spot,” he said.
Sam was interviewed by Mike Graham on talkRADIO for a segment on the report (11.30am-12pm, from 4m40). He outlined the report’s findings, and how these founders are making an outsized contribution to our economy and society, to job and wealth creation. Sam also flagged the absurd example of one entrepreneur being rejected by the Home Office because they disagreed with his assessment that the “UK is a very stable country with very little risk of fluctuation in business markets”, given the UK’s planned exit from the European Union.
In his Forbes column, our founder Philip Salter, made the case for policymakers to prioritise preserving the UK’s status as a destination for entrepreneurs and skilled workers who will enable their businesses to flourish. Policy contributor Fred Lindsay also covered our report in Forbes, calling the Entrepreneurs Network the latest voice “calling for Britain to remain open to foreign entrepreneurs and founders.”
Philip also penned an op-ed for City AM, writing “The history of Britain’s best businesses can’t be told without the story of immigrants – there would be no Marks & Spencer without Belarusian refugee Michael Marks.”
And Annabel Denham criticised Theresa May’s fixation with the net migration target while praising Boris Johnson’s pro-immigration stance in the Telegraph. She writes, “With the Fourth Industrial Revolution underway, we will need bold individuals willing to strike out alone and create the jobs of the future.” Many will come from overseas.
Blythe Edwards also covered the report in CapX (“Research by The Entrepreneurs Network shows that while only 14% of UK residents are foreign-born, a whopping 49% of the UK’s fastest-growing startups have at least one foreign born co-founder.”) Finextra also used the data as the basis for their article on the importance of migration to the future of UK fintech, while IT Pro used the report to call for visa reform.
Unhidden GEM
This week we helped launch the Global Entrepreneurship Monitor (GEM), which is led by Aston Business School's Professor Mark Hart and supported by NatWest.
The GEM is kind of a big deal in the world of entrepreneurship research. It tracks the rates of entrepreneurship across multiple phases in 49 economies, making it the world’s most authoritative comparative study of entrepreneurial activity in the general adult population.
I won't try to summarise the UK's full 88-page report, but here are two things that I found interesting.
Not so great expectations
We are a nation of entrepreneurs. One-fifth of working age individuals in the UK either intended to start a business within the next three years; were actively trying to start a business; or were running their own business. This has more or less been the case since 2011, and represents an increase on the previous long-run rate of around 1 in 6.
Early-stage entrepreneurial activity – the nascent entrepreneurship rate and
the new business owner-manager rate – also looks to be on trend (7.8%). Before the great recession the trend was more like 6%, so it's fair to say that over time we have become a more entrepreneurial country. However, this increase is largely in low expectation entrepreneurial activity, Just 1 in 6 UK early-stage entrepreneurs having high job expectations, which is lower than its comparator countries: US, France and Germany at 1 in 4.
A good gig
Gig economy workers are more entrepreneurial than many assume. In the UK, 4.3% of the population participate in the gig economy, but one
in 10 entrepreneurs are a gig economy worker – cutting across nascent entrepreneurs, through to new business owner and even established entrepreneurs.
As is concluded in the report "The gig economy seems to be an attractive way of working for those intending to start a business or who are in the early stages, with one in five future entrepreneurs working this way and one in ten nascent entrepreneurs. Given the flexibility inherent with this type of work it would seem ideal for those individuals who wish to spend time getting their business off the ground and earn a wage at the same time. The latter point is particularly important for those early-stage entrepreneurs who may not yet have a steady monthly income arising from their business venture."
Sukhpal of the UK
This week I interviewed Sukhpal Singh Ahluwalia for my Forbes column. Sukhpal supported Job Creators – our recentImmigrant Founders report. Sukhpal's story is compelling: "I came to the UK when I was 13 with my parents and two brothers, fleeing the murderous regime of Idi Amin in Uganda. We left very quickly and we left everything behind, including the business that my family had worked so hard to build up. We arrived in the UK with literally just the clothes on our backs and ended up living in a refugee camp. That experience was formative for me."Read the whole thing here.
Read the full e-bulletin here, and sign up for the e-bulletin here.
The DUD(E)
"I know some WAG has already pointed out that deliver, unite and defeat was not the perfect acronym for an election campaign since unfortunately it spells DUD, but they forgot the final E my friends, E for energise." Johnson's first speech as Tory leader was typically meandering, but his policy platform is starting to take shape.
Let's get Brexit out of the way first. The most likely sequence of events will be Boris going to Europe to negotiate the deal/backstop; Europe saying no thanks. Boris will then probably try to push through a no-deal Brexit. He might succeed, but his narrow majority means it's reasonable to assume he will lose a vote of no confidence. We will then get a General Election.
Brexiters and Remainers will both be seething. So in the interest of unity and sanity, let's talk of other things. Here are three reasons to be optimistic (as with governments of all stripes, I'm sure there will be plenty to criticise in future e-bulletins).
Down Under
Boris has immediately axed Theresa May's vow to lower immigration to the tens of thousands. Unlike Boris, I don't think an Australian-style points system is the answer, but the change of tone from May's premiership is a blessed relief. As my colleague Annabel Denham argues in The Telegraph: Immigrants are the lifeblood of Britain's entrepreneurial spirit – we need them more than ever.
Where Art Thou?
Boris's brother Jo Johnson – who wrote the foreword for our recent Job Creators report on immigrant founders – is back at the science ministry, straddling BEIS and the Department for Education. Johnson is well regarded by the research community and is widely considered to have done a good job when previously in the role. He was behind the creation of UK Research and Innovation (UKRI), championing the target that the UK spends 2.4% of GDP on research and development by 2027. Johnson might have an unexpected ally in his brother's Special Adviser Dominic Cummings. The former Campaign Director of Vote Leave takes a keen interest in science, as readers of his eclectic log will know. A recent blog on why science is becoming less efficient draws on the same body of research that interested me here last year.
Health of Nations
Matt Hancock remains at health, which may give him the time go some way to realising his tech vision to build the most advanced health and care system in the world: "The vision sets out how digital services and IT systems will need to meet a clear set of open standards to ensure they can talk to each other and be replaced when better technologies become available. A focus on putting user needs first and setting standards at the centre will enable local organisations to manage their use of technology and spread and support innovation wherever it comes from." Anyone interested should read last year's policy paper.
#JobCreators
Today we've released an important report revealing that foreign-born founders are making an invaluable contribution to the UK. In Job Creators: The immigrant founders of Britain’s fastest growing businesses, Sam Dumitriu and Amelia Stewart reveal that 49% of our fastest-growing businesses have at least one immigrant co-founder.
The report is featured on page 2 of today's Financial Times, I've written about it for City A.M., and we expect it will be in the Evening Standard later today. Sam Dumitriu has also written a longer article for CapX.
The report reveals that – despite just 14 per cent of UK residents being foreign-born – 49 per cent of the UK’s fastest-growing businesses have at least one immigrant co-founder. We use the SyndicateRoom’s Top 100 list, which is based on Beauhurst data to identify the startups, scaleups, and fast-growing firms that have seen the largest increase in value over the last three years. The list includes seven unicorns – startups with a valuation of $1bn or more – of which five have at least one immigrant co-founder, including Monzo and Deliveroo.
We would like this shared as widely as possible. Here is our Tweet thread on the report; here is our this easily digestible page to find out more; and here is a link to the full report.
If you want to support this research, it would be awesome if you share the links, news articles or any thoughts you have about the report on Twitter (@tenthinktank), Facebook (@tenthinktank) and Instagram (the_entrepreneurs_network) with the hashtag #JobCreators.
This isn't just about celebrating immigrant entrepreneurs. We are about fixing the system and are calling on the Government to:
Restore the Tier 1 Post-Study Work Visa and allow international students to work in the UK up to two years after graduation before moving on to another visa. Many of the entrepreneurs featured in Job Creators originally came to the UK to study.
Reform the Tier 1 Investor Visa by lowering the minimum qualifying investment threshold for investment in UK startups, scale-ups and venture capital funds.
The report also calls for the government to ensure that the new startup and innovator visas, which allow accelerators and incubators to sponsor entrepreneurs for visas, are implemented successfully. While new visas for entrepreneurs are welcome, the implementation has been flawed with Home Office guidance creating delays, briefly leaving the entrepreneurs with few options for moving to the UK.
Jo Johnson MP backs the report and has written the Foreword:
“For Britain to remain at the economic top table, we need to embrace the gifted students and buzzing entrepreneurs who wish to contribute to our success. It is senseless, therefore, to deny graduate entrepreneurs the chance to set up their business and invest their talents and energy in the country where they studied.
“This report sets out measured, reasonable and workable ways to harness international talent, for example by reinstating the Post-Study Work Visa and allowing international graduates to work in the UK for up to two years.
“I am proud of the positive impact immigrants have had on the UK economy. Without them, we would not be the dynamic nation of manufacturers, exporters, app designers, innovators and disruptors what we are today.”
We are proud too.As I conclude in my City A.M. article: "Today’s report shows the profound impact that immigrant founders are still having on Britain. Not shutting the door on them isn’t enough, let’s embrace them with open arms"
Read the whole e-bulletin here, and sign up for the e-bulletin here.
Call Her Maybe
Kelly Tolhurst MP, the Government’s Minister for Small Business, and Keith Morgan, Chief Executive of the Government-owned British Business Bank, are holding a teleconference at 10am on Thursday to hear business owners' experiences of finding and using external finance.
This is in response to some businesses telling them that the market for finance is not working as well as it could, with many saying that they find it difficult to navigate the finance options on offer.
If you are a business owner and have questions or suggestions about accessing business finance, register for the call here.
Gimme More
I hadn't planned to write about tech regulation two weeks in a row, but I co-authored a paper on the subject that's been released today.
In Safeguarding Progress: The Risks of Internet Regulation, Matt Lesh (Adam Smith Institute) Sam Dumitriu (The Entrepreneurs Network) and I make the case for a for a free, open internet, and for the Government to adopt these five principles for Permissionless Innovation:
Identify and remove barriers to entry and innovation;
Protect freedom of speech and entrepreneurship by retaining immunities for intermediaries from liability;
Rely on existing legal solutions, the common law, and competitive pressures to solve problems;
Push for industry self-regulation and best practices;
Adopt targeted, limited legal measures for truly hard problems based on evidence.
As I say in the press release, the growing burden of tech regulation risks strengthening the market position of tech giants by raising the barriers to entry. Treating platforms as publishers would hit startups hard. Facebook and Google can afford to hire an army of moderators, but their would-be competitors will struggle. While the Copyright Directive risks stymieing creativity, funding and innovation for disruptive tech entrepreneurs. Britain's tech sector is the envy of Europe. If we are to remain a world challenger, we need to up our game and factor in the significant cost of poorly targeted regulation.
City A.M. has a short write-up of the paper. And if you're a glutton for tech policy regulation (who isn't?), check out Ryan Bourne's paper on the antitrust policy in the US.
Separately, and more broadly, we're working with Liya Palagashvili, Visiting Scholar in the Department of Political Economy at King's College London. She is undertaking pilot interviews with founders/CEOs, investors, accelerators, and others in the London startup ecosystem better understand what it is like for entrepreneurs to run their businesses in London. Email her if you want to get involved.
Read the whole thing here, and sign up for the e-bulletin here.
VAT Chance
I wrote for The Spectator’s Coffee House blog this week on why Michael Gove’s plans to scrap VAT and bring in a US-style Sales Tax should be reject.
At first glance, a US-style sales tax is much simpler. The tax is only charged at the final point of sale. In theory, only the final consumer should pay and resellers are exempt. It is easy to see why the Environment Secretary might think swapping a VAT for a retail sales tax would reduce the burden on business.
But in practice, retail sales taxes aren’t so simple. Businesses have to pay the tax unless they can prove the item was bought to sell on to a customer. But resale exemptions are often limited; it’s not always clear whether someone is a consumer (and therefore should pay the tax), or a business (and therefore shouldn’t pay the tax). If a reseller is wrongly identified as a consumer, then the tax can build up over multiple stages of production. The final consumer ends up paying way more than they were meant to.
Rather than reducing the bureaucratic burden on small businesses, this would give bigger businesses, who have brought their suppliers in-house, an unfair advantage.
In Principle
This week the Government announced some tweaks to way tech will be regulated.
As I've argued in the past, over half of businesses think the level of regulation in the UK is an obstacle to success; however, it’s not just a matter of cutting. There are tradeoffs – regulation doesn’t just protect consumers and the environment, at it’s best, it also helps promote competition and support economic growth.
To help guide entrepreneurs in emerging technologies, we should embed the Innovation Principle across government with regulators across all relevant industries creating break-out zones where entrepreneurs can test new technologies. The Financial Conduct Authority’s Sandbox is an exemplar of this. It’s a safe space in which fintech companies can innovate by testing products, services, business models and delivery mechanisms in a live environment, while ensuring that consumers are appropriately protected.
Business Secretary Greg Clark has announced a new Regulatory Horizons Council to advise government on rules and regulations that may need to evolve and adapt to keep pace with technology. Also, a Regulation Navigator will be created – a new digital interface to help businesses ease their way through the regulatory landscape and bring their ideas to market quickly.
In addition, Clark announced a partnership with the World Economic Forum to share best practice on getting innovative products and services to market, and a review of the Regulators’ Pioneer Fund, which backs projects that are testing new technology in partnership with the regulators in a safe but innovative environment.
We aren't just a think tank for tech entrepreneurs, but it's impossible to ignore the importance of this sector. In fact, it's increasingly awkward describing tech as a 'sector', as it becomes is critical to the way nearly all businesses deliver their products and services. To an increasing extent: every business is a tech business.
A Thousand Fathers
Although every policy has a thousand fathers (and mothers), it's always heartening when ideas we've pushed are backed by politicians.
Back in 2015 we released Made in the UK with the NUS, revealing that 42 per cent of international students intended to start a business after graduation. However, in order to do this, international graduates wanted time to work in start-ups, building their ideas and networks. Instead, many of the best and brightest in the world are turfed out. That's why we made the case for reintroducing the Post-Study Work Visa, which prior to 2012 granted international students time the time they needed after graduating.
The Post-Study Work Visa was scrapped by Theresa May when she was Home Secretary. Today, Sajid Javid – the Home Office's Secretary of State and contender to be the next Prime Minister – has promised to support Jo Johnson's cross-party visa proposals, which includes the reintroduction of the Post-Study Work Visa.
Javid has also vowed to broaden the apprenticeship levy into a wider skills levy, giving employers the flexibility they need to train their workforce. Again, this is something that we called for in our recent Management Matters report – part of our ABE-sponsored Business Stay-Up campaign.
Meanwhile, fellow leadership hopeful Sam Gyimah announced some encouraging tax policies today. As part of a five-point plan to scrap the worst taxes in Britain, Gyimah has called for a couple of things we've proposed. He would replace business rates with a commercial land tax – paid by commercial landlords on the land value so that no business is worse off if it invests in its property. He also plans to make all business investments deductible immediately, by making the Annual Investment Allowance unlimited. We suggested both these things in our report on Tax Reform for the All-Party Parliamentary Group for Entrepreneurship.
No matter who becomes Prime Minister, many of the policies announced by the candidates over the coming days (both good and bad) will feed into the next Government's agenda. Today's announcements offer room for hope.
On your bike
The Resolution Foundation has released some important research. Moving Matters finds that the rate at which the British public take up a new opportunity and change residence has fallen – particularly for younger people. Among other things, the report finds the propensity of young private renters to move home and job fell by two-thirds between 1997 and 2018, largely driven by increased rental costs. This should concern us all. Individuals can't make the most of their talents if they're priced out of cities, and entrepreneurship is stymied if the pool of talent isn't deep for founders to build their companies.