Seven million people poised to kickstart our economy – but pleas for support ignored

5 April 2018

Posted in Product

The UK has a population of seven million latent entrepreneurs, who have advanced plans for a business but are being held back from launching, according to a national survey of 8,500 people conducted by AXA Business Insurance1.

These people account for 13 per cent of the population and are drawn from all walks of life and demographics. If these plans were realised they would massively boost the UK’s private sector economy which currently numbers 4.8 million businesses. Crucially, the survey only considered people who could articulate a concrete business idea and practical steps already taken to realise it.

UK region of people planning a business
1 London 19%
2 Wales 13%
3 North West 12%
4 North East and West Midlands 11%
5 East Midlands and Scotland 10%
6 Yorkshire and Humber, East Anglia, South East 9%
7 Northern Ireland 8%

The biggest untapped source of business activity is among the under 25’s, where 27 per cent a business idea and wish to start it. Holding them back is not concern about getting funding or lack of qualifications, but rather a feeling that business and finance skills had been ‘missed out’ during their education.

Among all demographics, six in ten of these budding entrepreneurs said they needed to acquire crucial skills or training before they could set up. Only half of them – 37 per cent – said the courses and training they need are available and accessible to them.

With formal opportunities absent, 57 per cent said they will try and gain skills online, and 37 per cent even said they would use Youtube tutorials. AXA points out that self-help may be inadequate, as startups that access formal support and skills training have a better chance of survival.

The most sought after, but least available courses were: Business Management, Marketing, Finance and Digital Skills. Expense was the top barrier to further education, followed by a lack of the right courses at local institutions. In England people were three times more likely to point to these deficiencies than in Scotland.

Just one in ten said they felt there was good startup support available to them. The exception was Wales, the UK’s fastest growing economy which has seen significant digital investment and promotion of the tech economy in recent years.  Welsh people are three times more likely to know about the available support and rate it ‘good’. Swansea was also rated top among UK cities for its startup ecosystem.

When asked who they would turn to for knowledge and advice on starting a business, just 15 per cent named a governmental, local authority, banks or other institutional sources. Instead, 19 per cent said they didn’t expect anyone to help them. Most (52 per cent) will turn to family members, particularly mum and dad.

Budding entrepreneurs aren’t taking advantage of government schemes like the British Business Bank and the Start Up Loans Company to finance their business plans either. Twenty-nine per cent will rely on their existing salary instead, rather than being able to focus on their business full-time. The biggest source of startup funding quoted was savings (56 per cent).

Top locations for startup support % saying there is good local support
1 Swansea 57%
2 Edinburgh 27%
3 Southampton 24%
4 Birmingham 17%
5 Glasgow 16%
6 London 11%
7 Leicester 10%
8 Newcastle 10%
9 Brighton 9%
10 Manchester 9%

A final, but less tangible, extinguisher of Britain’s entrepreneurial spark is societal expectations of who can and who can’t be an entrepreneur.  Almost half (46 per cent) of the people studied said they felt people would not take them seriously as an entrepreneur as they don’t fit a certain profile.

When asked to explain, a third cited things like appearance, weight, gender (female), age, class, even ethnicity – rather than anything related to talent or ability. 

The second biggest category of comments related to not having a certain persona: typically, by not being ‘aggressive’, ‘extrovert’, ‘flamboyant’, ‘ruthless’ or ‘confident’ enough.

“The UK population has an enormous pool of latent entrepreneurship, and it will be a tragedy if it goes to waste. It’s a personal tragedy for individuals who don’t realise their potential, and a national issue as the economy misses out on talent and revenue.

“This isn’t just about dreams, it’s also about economic survival. With such a rapidly changing workplace and impending challenges like automation, self-employment will become a rite of passage for future generations.

“For someone just out of university today, it’s highly likely that over the course of a forty-year career they’ll need to switch career paths several times over. The likelihood they’ll meet automation, redundancy, parenthood, life crises and other changes that put them out of the workplace for a spell is also very high.

“Lifelong learning opportunities will be crucial if this population is going to be adaptable, competitive and capable of surviving what the future will throw at us. Our study shows that at present the opportunities out there are scarce, under-funded, under-promoted and tend to involve debt.”

Gareth Howell, Managing Director, AXA Insurance UK