APPG for Entrepreneurship Digest: June 2023
/“None of this happened by chance,” declared Mayor of London Sadiq Khan when reflecting on the growth of the capital’s tech sector over recent years. He was addressing the opening morning of London Tech Week, which, as you’re receiving this, has for the last two and a bit days turned the Queen Elizabeth II Centre into a melting pot of entrepreneurs, investors, politicians, civil servants, journalists and many other interested punters.
We agree with the Mayor. It’s easy to look at London – streets ahead of other parts of not just the UK, but also Europe and the wider world too – and assume there’s something innately special about the city as a place to start and grow a business. But the truth is that it isn’t London that’s entrepreneurial, it’s the entrepreneurs who work there who are.
Prime Minister Rishi Sunak seemed to concur as well. Speaking just before Khan, he singled out ‘people’ as the starting point for London’s entrepreneurial success. He noted that the UK is “one of the most digitally literate societies in the world, with a higher percentage of STEM graduates than the US and 4 of world’s top 10 universities,” and that these skills are what are helping to build the UK’s strengths in fintech, creative industries, and engineering biology.
Sunak also recognised the fact that the UK is a magnet for international talent – citing research (not for the first time) from our Secretariat organisation The Entrepreneurs Network, which found that half of the 100 fastest growing businesses in the UK were set up by an immigrant. The Prime Minister also explained how reforms he helped craft, such as the High Potential Individual Visa, have paved new routes for the planet’s brightest and best to come into the country – working for innovative firms or establishing entirely new ones of their own.
Of course, people are just one ingredient in the overall recipe to achieving a truly flourishing entrepreneurial ecosystem. Others would include crucial factors such as access to capital, an enabling regulatory environment, an adequate supply of office and retail space, and decent transport networks to name but a few.
Certainly, all of these issues are things which are clear in our minds at the APPG for Entrepreneurship right now. This is the first newsletter since our last AGM, at which I’m delighted to say we added a handful of fresh MPs to our ranks. Anna Firth MP, Virendra Sharma MP, Paul Howell MP, Brendan Clarke-Smith MP and Ben Bradley MP all join as new Officers. We’re looking forward to working alongside them, and all of our Parliamentarians, to focus on the issues that matter most to the business founders in their constituencies.
For individual entrepreneurs, there’s a lot that comes down to chance. Maybe it’s happening to meet a VC who’s willing to back your idea; maybe it’s coming up with the idea in the first place. But for the entrepreneurship community as a whole, chance becomes less important, and deliberate decision-making takes precedence. The policies which get made in national and local government have tangible and significant consequences – whether for ill or good. And while no government can perfectly steer a part of the economy in exactly the direction it might wish, it can at least nudge it one way or the other. As we embark on another year of running the APPG, we’re excited to continue to campaign for changes to support entrepreneurs – and make their chances of success that little bit more certain.
Adviser Update
Our Secretariat organisation The Entrepreneurs Network will be in Parliament next week, co-hosting a breakfast event with OakNorth next Tuesday 20 June on what founders of mid-market firms need from the government. Places are limited, but click through to request to attendv.
Our friends at Beauhurst have been busy, publishing no fewer than three reports last week – including the third edition of their Top 200 UK Women-Powered Business report, another on gender and diversity in the UK tech sector, and finally one on equity investment in Wales.
In Parliament
In Topical Questions, Andrew Jones MP highlighted that in 2022: “women established more than 150,000 new companies in the UK, which is twice as many as four years ago and the highest ever, yet the number of women founding businesses remains well below that of men”, before asking: “What steps are being taken to further support female entrepreneurs?” Responding, the Minister for Women Maria Caulfield said: “We are committed to supporting female entrepreneurs, particularly in the high-growth sector. That is why we have launched the women-led high-growth enterprise taskforce, which has found that venture capital is a serious barrier. Currently, for every £1 of venture capital, 89p goes to companies led by men and only a penny to women. That is why getting access to venture capital and funding opportunities is a priority for female entrepreneurs.”
Shadow Science Minister Chi Onwurah raised the issue of late payments, saying: “every day thousands of our great British small and medium-sized enterprises are wasting precious time and money chasing late payments, at an estimated cost of £684 million a year.” In response, Business Minister Kevin Hollinrake said that she was: “absolutely right to raise the issue of late payments. I attended a roundtable yesterday as part of our payment and cash flow review consultation, which is hugely important. We have significant engagement with businesses across the piece. We are determined and ambitious to reform the rules on late payments to ensure that businesses get paid on time. We have made significant progress in recent years in our international performance, so we are not an outlier. Nevertheless, we can and shall do more. The results of the consultation will be made available shortly.”
In a debate on digital markets, Nadhim Zahawi MP said that the: “Competition and Markets Authority’s recent ruling blocking the acquisition of Activision Blizzard has made us an outlier,” before suggesting: “As we are doing in financial services, all regulators should have a remit for growth.” Replying to him was Business Minister Kevin Hollinrake, who highlighted the Smarter regulation to grow the economy policy paper, which proposes measure to: “[ensure] that Ministers, officials and others look at alternatives to regulation, rather than jumping straight to regulation, and have an earlier impact assessment of what regulation would mean for businesses’ costs, rather than just looking at other factors.” He also added that he: “absolutely [agrees] with him that the best regulator is competition – the No. 1 thing we want to drive forward – which is also the best thing for growth.”
In a Written Statement, Chancellor Jeremy Hunt detailed the Life Sciences Growth Package, in his own words, a series of “policies spanning regulation, research and development (R&D), infrastructure, skills and planning which is aimed at driving investment, growth and innovation.”