Positive UK attitudes to entrepreneurship not converting to intent to start a business, say researchers
Figures released in the 2007 Global Entrepreneurship Monitor report for the United Kingdom suggest that despite a relatively favorable 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.
Directed by Babson College, GEM reviews entrepreneurial activity and perceptions of 42 countries and is the world’s largest research project focusing on entrepreneurs and how they affect national economic growth. No other research exists that can provide consistent cross-country information and measures of entrepreneurial activity in a global context.
GEM is a consortium of national teams, participating in the Global Entrepreneurship Research Association. Contact details and national teams’ micro-sites can be found on www.gemconsortium.org. A selection of GEM data is available including an updated list of the growing number of peer-reviewed scientific articles based on GEM data.
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.”
Further information:
Paul Gallagher
Press Officer
University of Strathclyde, Room 3:13 McCance Building, 16 Richmond Street, GLASGOW G1 1XQ
T: 0141 548 2370
F: 0141 552 1576
E: paul.gallagher@strath.ac.uk
NOTES FOR EDITORS:
The 2007 GEM report for the UK is based on a sample of 42,713 working age adults, weighted so that it is representative of the UK adult population by age, gender, ethnicity, and region. This was the largest national sample of any country covered by GEM.
The report, the 8th annual GEM UK report in the series, was issued by London Business School and written by Dr Rebecca Harding (Delta Economics), Professor Mark Hart (Kingston University), Professor Dylan Jones-Evans (University of Cardiff) and Dr Jonathan Levie (University of Strathclyde).
