‘Who thinks the UK is the best place in Europe to start a business?’ asked Spectator editor Fraser Nelson. Almost everyone at the table raised a hand. ‘So that’s a pretty good start…’
In the dining room of Drummonds Bank — a fine example of 18th Century entrepreneurship — The Spectator and NatWest brought together an eclectic group of entrepreneurs, investors and Labour’s shadow business secretary Angela Eagle MP, to discuss opportunities and obstacles for start-ups and scale-ups. The question for the table was what government and banks can do better to help turn great ideas into growing businesses?
Alison Rose, NatWest’s Chief Executive of Commercial & Private Banking, set the scene: Recent research shows that more than half of adults in Britain would like to be self employed, a record 27 per cent say now is a good time to start a business but more than half of people who would like to set up a business are held back by a fear of failure and don’t know where to go for help. One of NatWest’s responses is its partnership with ‘the world’s largest free business accelerator’ Entrepreneurial Spark, providing support and mentoring in 13 locations around the UK. Melanie Lawson, an Entrepreneurial Spark client and founder of Brighton-based Bare Biology (which sells a range of Omega 3 fish oils) offered a personal example of the challenge of launching a micro-business as a mother of young children.
There was wide agreement that awareness of entrepreneurship, both as a career choice and as a force for positive change, has grown dramatically in the UK in recent years. But there were differing views of problems that need to be addressed. Mike Cherry, chair of the Federation of Small Businesses, spoke of the need for government to ‘reduce the cost to business of doing business’ — though he praised the Chancellor’s reform of business rates for smaller ventures. Tech investor Julie Meyer of Ariadne Capital entered a passionate plea for lower taxes: ‘half the monthly cost of running my business goes straight to the government’. E-publishing entrepreneur Matthew Lynn was less concerned: ‘To be honest, with corporation tax going down to 17 per cent, the system’s quite friendly.’
A common concern was shortage of skills, particularly in the digital sphere but also in financial literacy. Russ Shaw of Tech London Advocates described how 40 per cent of tech start-ups in London struggle with the capital’s tech talent shortage, having to recruit internationally for the staff they need to grow. Indeed, if the city is to remain a global tech powerhouse, it will need to rely on the continuing ‘tech talent pipeline’ from Europe.
Angela Eagle MP agreed that ‘what we teach is out of date’; Gemma Godfrey of online wealth manager Moo.La spoke of the need to place higher value on vocational and technical training, and the importance of placements to give youngsters an idea of business. Paul Lindley, founder and chairman of baby food success brand, Ella’s Kitchen, spoke of a UK education system designed largely to get kids through exams when it should be teaching versatility and willingness to take risks.
Besides ideas, skills and risk appetite, ambitious start-ups need capital — another area in which the UK has room for improvement. Serial entrepreneur and PinkNews founder Benjamin Cohen described how much easier he found it to raise venture capital in the US. Others spoke of traditional UK investors as both risk-averse and short-termist, compared to a more upbeat long-term approach in the US; it was acknowledged, too, that UK entrepreneurs need to learn to sell themselves better in investor pitches.
What’s in short supply — the table agreed — is ‘patient capital’, combined with more sophisticated networks and clusters. And of course there’s a bigger role for banks, not generally as sources of debt finance for start-ups but in ‘relationship banking’ that understands the needs of small business customers. NatWest’s relationship with Entrepreneurial Spark explained Alison Rose is just one example of how the bank is trying to address those challenges.
Overall, the mood was optimistic: entrepreneurs ‘working without rules or boundaries’ are ‘the lifeblood of capitalism’, said one diner; put simply, ‘they make things better’, said another. And though there are gaps to be addressed, the UK is rapidly getting better at making entrepreneurs.
This dinner was organised by The Spectator in association with NatWest. This article was sponsored by NatWest.
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