The Entrepreneurial Society

Citation

Williams, S. (1998), "The Entrepreneurial Society", International Journal of Entrepreneurial Behavior & Research, Vol. 4 No. 3, pp. 270-273. https://doi.org/10.1108/ijebr.1998.4.3.270.2

The aim of this book is to make the UK more entrepreneurial by making recommendations and building on the aims set out by Tony Blair in his first speech as Prime Minister. Prime Minister and authors agree that the aim is lofty and will not be easily reached, but the book is useful in that it provides a set of recommendations for several areas of activity. Interestingly, these are comprehensive and pragmatic recommendations in parts, whereas in others they are more generic and philosophical.

The first chapter raises several questions about entrepreneurship in UK society and ends by recommending that new government policy should encourage the supply of high quality new firms. This argument is founded in the belief that government support for new firms is essential if entrepreneurship and entrepreneurs are to be successful in creating the dynamic and thriving economy which is the dream of the government. This is a move away from the reports (and indeed, the government policy) of the mid‐1990s that saw “cherry‐picking” of high growth firms as the way forward. The entrepreneurial economy is seen as having the benefits of increasing prosperity, encouraging and supporting innovation, job creation, meeting the needs of a changing economy and following current changes in trend in the labour market (i.e. that the “job for life” is a thing of the past). A key aspect of this introductory chapter is the difficulty encountered when measuring or pinning down any factor connected with the entrepreneur and/or entrepreneurship ‐ even to the characteristics of the entrepreneur, which are reported in an inconclusive form. Some useful starting statistics are supplied as are some interesting comparisons between entrepreneurship in the UK and in other countries.

Government policy towards the small firms sector is reviewed in chapter 3 ‐ from the attempts at emulating the US economy by the Thatcher government of the 1980s to refocusing on growth firms by the early and mid‐1990s. Introducing the detail of government support with some encouraging reflection on the increasing collaboration between agencies for support (which is a recurring, if weak, theme of the book), the regional and international inconsistencies in support are described in some detail. Concluding in this section that policy can have a positive effect in encouraging entrepreneurship (and specifically as an option for the unemployed), increasing survival rates through stimulating better quality start‐up businesses, the variability of local schemes and the problems brought about by the single regeneration budget are discussed at length.

In reviewing the next section, I feel duty bound to declare my interest as an educator in the entrepreneurship field. Since 1995 my role has been to introduce and deliver entrepreneurship teaching throughout the university ‐ starting in our Business School then extending our teaching to reach students of art, of information and media studies and of electrical and electronic engineering. As such, for some time we (in common with colleagues at many other Scottish universities and colleges) have been striving towards the recommendations of this section and they therefore seem, on a local basis, somewhat dated. Acknowledging this, the chapter points to the ways in which the education system may help to change the negative attitudes towards entrepreneurship highlighted in the Scottish Enterprise (1993) Business Birth‐rate Report and mentioned earlier in the book. While it may be true that the education system can have a positive impact on the business birth‐rate, the pedagogy of teaching entrepreneurship is very different from traditional methods and this should have been stressed. Also, the Scottish education system has been tackled at all levels by the Centre for Enterprise Education at Jordanhill with the aim of making entrepreneurship an integral part of the system “From primary 1 to PLC”. Local schemes such as “The Skene Awards” (started by an Aberdeen based entrepreneur in the 1980s and still running and successful to date) endorse and build on work such as that by staff at the Jordanhill centre and deserve more credit than is given. Further underrepresented is the amount and quality of collaboration between entrepreneurs and the education system; for a number of reasons, entrepreneurs across Scotland are pledging large amounts of time and effort to the education system ‐ helping to create case studies about themselves and their organisations, being trained to deliver their cases effectively, delivering their cases, assessing student work, encouraging and supporting student projects, mentoring students through the start up process and so on.

This kind of commitment and underpinning is pivotal to the success of any entrepreneurship education initiative and good practice might have been emphasised and transferred to other, less successful or proactive regions of the UK. Success in entrepreneurship programmes in schools, colleges and universities, as well as those created and supported by LECs, TECs and the like in the community will help to relieve the barriers to entrepreneurship found in the workplace. The recommendations from this section are laudable if a little dated, but it is disappointing that the strengths created in the education system over the past few years are not recommended as a template for future action.

General government business support is analysed with reference to the Business Links, TECs and LECs, with the streamlining of these services being a clear theme. At present, the support available is seen to be over‐complicated in places while being difficult to access in others. The refocusing and streamlining recommended here seems logical although some of the disparity between regions might be justified by the ability of local provision to meet local needs. Perhaps a more realistic and practical solution would be for the shape and form of local provision to be more effectively communicated to potential and existing clients of the service. Communication may also be the key to strengthening the recommendations if the education system is woven in here: there is evidence that collaboration between the education system and other support agencies can yield positive benefits and while the University for Industry is mentioned, existing educational institutions can provide LECs and the like with information, potential clients and access to current research.

The themes of communication and entrepreneur support are clear in the advice for encouraging the unemployed into self employment and it is good to read an accurate analysis of the statistics relating to success and failure rates in this sector. Clear emphasis on flexible, accessible and generally available routes to self‐employment are the recommendations, along with careful and balanced evaluation of the effectiveness of the current and proposed schemes for support. It is also important that the support is provided by the right people and here again, there may be scope for rolling out the experiences of entrepreneurship educators, so the use of role models in encouraging entrepreneurship becomes more vital.

Finally, the availability of finance to new start‐ups is discussed at length in relation to government policy. This section of the book is critical because the lack of access to, rather than availability of, finance is perceived to be a barrier to business start‐up. The restrictions on access are in part seen to be caused by lack of appropriate preparation of the business plan, and in particular the financial projections by potential entrepreneurs.

This lack of preparation becomes clear when entrepreneurs approach banks for finance as it is reflected in higher lending margins (reflecting both higher failure rates and the difficulty for banks in assessing risk in new firms), funding gaps and a general requirement for collateral. Venture capitalists are a further source of finance but they tend to invest larger amounts of equity ‐ often in excess of £250,000 and management buy‐out and buy‐ins are more attractive to such investors. Seed capital firms are fewer than venture capitalists per se and this creates an equity gap for new firms. Business Angels are also a relatively rare breed in the UK and due to the largely unrecorded nature of the transactions of these informal investors, it is difficult to assess their impact on the requirement for start‐up capital.

A clear way ahead for policy in favour of finance start‐up is presented. Government policy should promote communication and collaboration between private and public sector support agencies and providers of start‐up finance. An example of this type of strategic alliance might be a bank pointing entrepreneurs in the direction of their local Business Link as a potential contact for sources of finance and/or advice. Evaluation of the Loan Guarantee scheme to ensure its continuing flexibility is recommended as are pilot versions of an Equity Guarantee Scheme.

Overall, this book provides an interesting overview of the state of entrepreneurship in the UK to date and this would be especially true for the newcomer to the concept of entrepreneurial Britain. Much entrepreneurship and related activity is included, but there is more omitted. There is a tendency to focus on apparently new ideas for progressing the state of entrepreneurship when some of these ideas have already been tried and tested ‐ some very successfully and some with only limited success. There is also a tendency to give a view of the various agencies for support as separate ‐ both philosophically and practically. A more positive way forward would be to promote the forging of strategic alliances between the enterprise companies, the sources of finance, the educational institutions, experienced entrepreneurs and so on. If this were the case, then the strands of entrepreneurship in the UK would become interwoven, rather than being quite separate as in this book. The mutual benefits that would potentially accrue from such alliances could only be of benefit to the entrepreneur, the institutions and the UK economy as a whole.