As in previous economic downturns it is the small business community that drives the recovery across all sectors of the economy. UK entrepreneurs once again stand ready to rise to the challenges and opportunities created by the Coronavirus pandemic and the economic fallout from Brexit, a new report says.
The latest Global Entrepreneurship Team (GEM) UK report found that although around of half budding entrepreneurs said that the UK government had so far dealt effectively with the economic consequences of the pandemic, there must be improved programmes, financial support and advice to start-ups and scale-ups through different stages of the business life cycle.
GEM is the world’s largest survey of entrepreneurship and is the only global research source that collects data on entrepreneurship directly from individual entrepreneurs. It measures various rates of entrepreneurship in 43 countries in 2020.
GEM’s UK team – which is led by Professor Mark Hart of Aston University – compared attitudes, activity and aspirations in the UK, Germany and the United States as well as the four home nations of the UK.
Access to finance remained one of the major obstacles to entrepreneurial activity in the UK. Enhanced tax benefits for entrepreneurs, such as tax breaks for start-ups and businesses in difficulty to reduce early exits and better tax incentives for recruitment, investment in managerial and digital practices and skills were also highlighted1.
The report also called for more entrepreneurial education, especially at school age as well as improved technical education and improved links between the educational system and industry to boost growth post-COVID and post-Brexit. It found that the UK still lags behind many comparable economies in this respect.
“The GEM survey undertaken in the last few months of 2020 showed a sharp fall in the number of individuals in the early stages of setting up a new business compared to the pre-pandemic high in 2019.
“This is hardly surprising, but the analysis has also shown that the entrepreneurial foundations of the economy and society are still strong and these will be crucial for the recovery after the pandemic and in dealing with the ongoing economic fallout from Brexit.
“Those ethnic-minority communities that have borne the brunt of the pandemic in terms of infection, hospitalisation and sadly deaths demonstrated their resilience by maintaining their previous levels of early-stage entrepreneurial activity (TEA rate) which were significantly higher than for the non-ethnic minority population.
“Clearly, the pandemic has had no damaging impact on the level of entrepreneurial activity by immigrants and ethnic-minorities although it has depressed it for life-long residents and the non-ethnic population.
“There is undoubtedly an appetite for people to start their own businesses in the next three years and many report new opportunities because of the pandemic but they are delaying the actual decision to get the business operational.”
The full GEM UK impact report, sponsored by NatWest, is available for download here.
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Global Entrepreneurship Monitor UNITED KINGDOM MONITORING REPORT
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