Britain didn’t get any less entrepreneurial in 2008, according to Aston Business School’s latest Global Entrepreneurship Monitor. Its annual survey (of 32,000 people in the UK) found that around 5.5% of working adults were starting and running new businesses, which is more or less the same as the previous year. However, there was a noticeable drop in the number of people who thought there would be good opportunities for start-ups in the coming six months: from 35% to 27% of those surveyed. And that was before the banking crisis…
At first glance, these results paint a rather bizarre picture: they suggest people are eagerly setting sail in their own ships, with very little expectation that they’ll actually float. It’s a bit like the Grot shop experiment in Reggie Perrin’s classic sitcom, in which our hero decided to stock his shop with stuff that nobody would want to buy. Admirable entrepreneurial derring-do, but you have to question the business sense.
However, in practice the situation is more complicated. Since it takes a bit of time to get a fledgling business off the ground, most of this 5.5% will have committed to entrepreneurial life well before the financial crisis really hit (although you might argue that they should have seen it coming even then). The really notable figure is that drop in optimism, which is incidentally the fourth-largest of any rich country surveyed – only economic basket cases Iceland, Ireland and Spain were gloomier.
And to make matters worse, this survey was carried out between May and September last year. Since this means most of the answers were given before the collapse of Lehman Brothers and the global turmoil that ensued, the conclusions are arguably a bit out of date. Even back in 2008, just 7% of Brits expected to start a business in the next three years (compared to 12% of Americans and a whopping one-third of people in India and China). So we’d love to know how people would answer the same questions now – chances are that people will be much less optimistic about the opportunities that are currently out there.
On the other hand, it’s equally not impossible that more people may end up throwing themselves into start-ups. Given the current state of the job market, there’ll certainly be more people with the opportunity to have a go – now they don’t have a nice safe job to rely on, perhaps they’ll be more willing to embark on that personal venture. And even if the odds seem stacked against them, they shouldn’t give up hope. Just look at Reggie Perrin – his Grot shop turned out to be a smash hit…
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