Why We Need More Entrepreneurs

Article excerpt

A NEW government and another set of policy initiatives to foster enterprise and entrepreneurship. The clear implication is that the UK needs more entrepreneurs, and if not, why change?

Inevitably this leads to a series of questions which attempt to uncover the causes of a lack of enterprise; most of these focus on the availability of capital. I must confess that I have no precise idea where the UK ranks in a world league of entrepreneurial activity, but I am a believer in the notion that entrepreneurs are critically important to the economic well-being of the UK, and in this sense you can never have too many.

Further, I believe that any debate which focuses on one factor alone - such as capital, regulation or tax - will be arid and ultimately unproductive.

Is there a shortage of entrepreneurs in the UK? International comparisons suggest that on most measures (job creation, adoption of new technology, patent registration, new company formations) the US probably leads the world. It is, however, more difficult to compose an accurate international league table to benchmark the UK against its peers.

To be frank, I think we should be less concerned with bench- marking and give more regard to running an ever more entrepreneurial economy.

Here I should confess to a vested interest; the key success factor of any venture capital fund is a manager's ability to put his fund's capital to work alongside great entrepreneurs. In essence, the more outstanding businessmen/women I can back, the better my returns, and the happier my clients (corporate pension plans) will be, and hence the greater the amount of funding they will allocate to venture capital.

Putting aside this rather parochial view, entrepreneurship does matter. As our environment is subject to a constant stream of externally and internally generated shocks or movements, our society must be able to adapt itself quickly, or else we simply become victims of events.

Entrepreneurs are the first people to read the straws in the wind, to identify new patterns of demand, and to identify new methods of making or delivering goods and services. Their activity is both the product of change and a driver of change. For example, in response to the spiralling costs of healthcare, several entrepreneurial-minded managers and companies have introduced novel methods of drug design, managing the R&D process (Clinical Research Organisations), and delivering healthcare (e.g. home i.v. therapy).

Entrepreneurs have a wonderful record of achievement. The great enterprises of today are almost, without exception, built on the foundations created from the vision, talent and drive of entrepreneurs. For example, the great retailers such as Walmart and Marks & Spencer, the major oil companies such as BP, and the leading consumer electronics business, Sony, are all founded by entrepreneurs of vision and energy.

A similar entrepreneurial thread weaves its way through the application of technology. For example, the widespread use of low- cost computing comes to us courtesy of Intel, Microsoft, ARM and Psion, all of which are the recent creation of a handful of pioneers.

The thread does not end here. Consider the part played by charitable foundations, endowed by entrepreneurs in providing money to finance original research, to promote the arts and to deal with social problems. Examples that spring to mind include The Wellcome Trust, The Gatsby Foundation, The Rockfeller Foundation and the Howard Hughes Foundation. This thread of enterprise has in act been woven into a thick and comforting blanket.

So where might we find areas for improvement? I would suggest that we look at our people, our culture, the opportunities available to us and the supply of capital. They are all inter-related and should be considered as a whole.

Most new wealth and employment-creating enterprise over the next decade will depend on people with a deep understanding of science and technology, and a talent for applying it to meet the current and future needs of the market. …