Our Entrepreneurial Environment Has Never Been Better. But There Is Still Work to Do

Nonetheless, the wider picture is mixed. The UK still lacks an expanding cohort of fast growth firms: those businesses with revenues of between £2.5m and £100m, and at least a 33 per cent increase in turnover over three years, as well as at least 10 per cent year-on-year growth for a minimum of two of these years. And Brexit could stunt growth further. According to the Barclays findings, entrepreneurial growth activity remains “fairly flat,” with fewer firms managing to meet the measure of “high-growth”. Of equal concern, we’re told that Britain lacks businesses with the ambition to scale. MA activity may be strong, but few young companies are choosing to IPO.

The issues outlined in the report are all too familiar: talent shortages, in part driven by too few students opting for STEM subjects; myriad challenges around taking on investment; or plans for international expansion which fail to materialise. But it’s not all bad news: regulatory conditions are the best seen since the Entrepreneur Index began. As the report highlights:

“The UK’s corporation tax rate is currently at its lowest ever, while specific reliefs aimed at early-stage investors – namely the Enterprise Investment Scheme (EIS) and seed EIS – have created a favourable tax environment. And, in 2016, the Enterprise Act came into force, which seeks to further ease the regulatory burden on small business, and establishes a Small Business Commissioner to help small firms resolve issues, such as late payments.”

And while the Chancellor may have missed an opportunity to further lift the burden on businesses in this week’s Autumn Statement, our members will be happy with many of the announcements, not least £1bn for digital infrastructure and the £23bn he pledged to spend on innovation and infrastructure over five years.

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