While there has been a laudable focus under David Cameron’s government on entrepreneurship, the UK has now reached a stage where the emphasis needs to shift on getting start-ups into high growth, where they can make a noticeable difference in job creation.
Entrepreneurs are life’s risk takers, and following the 2008 crash, many seized opportunities while the majority preached only challenges and crisis. Half a decade on, it is exactly these brave pioneers from the double-dip that the UK economy needs to see on the highway to high-growth.
Small businesses with ambitious growth plans typically need two ingredients they are cannot provide themselves: funding and market access. This is where both government and big business can have a role in supporting entrepreneurs who may have turned their innovation into a marketable enterprise, but often need help to get past growing pains.
The government has certainly nailed its flag to the mast in the last month, first announcing a Business Bank that is expected to provide up to £1bn of funding, and last week extending the Funding for Lending scheme,incentivising the banks to lend to entrepreneurs. Along with the Seed Enterprise Investment Scheme, which aims to do the same for individual investors, there is certainly no shortage of government impetus behind easing the flow of capital to the nation’s small businesses.
But while the levers of government can be worked to the benefit of entrepreneurs, the best help will always come from within the business community itself. Whatever the economic climate or the prevailing wisdom, money follows ideas, and the best entrepreneurs will always attract the interest of corporations who want to benefit from their innovation, and can in turn provide a highway to new markets and much-needed funding.
The benefits for David of dancing with Goliath are obvious, but there is also a significant reciprocal for the corporations. They can benefit from the innovation that is the preserve of nimble, entrepreneurial businesses, particularly when it comes to digital strategy and the latest technology.
Above all, the creation of business networks is what can drive growth and bring value to the economy as a whole. This point was brought home to me when I attended an event hosted by the Goldman Sachs 10,000 Small Businesses UK programme last week. This is a programme run by the bank, providing an intensive training scheme for small business owners, across all areas of business management.
Hearing from some of the entrepreneurs who had been through the programme was a reminder of how much growing businesses stand to benefit from the support of experienced corporates. Entrepreneurs are driven, fiercely ambitious innovators, but are also largely self-taught business people, and by their own admission in need of the confidence and language to manage the finances behind a growing enterprise.
Direct business training is definitely one way in which big can help small. But it goes beyond that - what particularly struck me about the 10,000 Small Businesses programme was the incidental networks and relationships it had succeeded in creating among its participants. Many have found new clients, suppliers and partners among their colleagues from the programme, while the general sense was that most had learned entrepreneurship does not need to be a lonely pursuit.
Being an innovator does not need to make you a sole operator; the true entrepreneur is also a consummate networker, who knows the value of the connections and expertise fellow business owners - large and small - have to offer.
The UK can ride out of this recession on a wave of small business growth, but to ensure this occurs and is sustainable in the long-term, the private sector must learn to help itself. That means big business helping small, and entrepreneurs clubbing together to share ideas and resources. The answers are often simpler than they seem, so let’s talk.
Julie Meyer is founder and CEO of Ariadne Capital and hosts the annual Follow the Entrepreneur summit.