Start-Up, Scale Up: A reason to believe a vibrant economy can return.
Observations on the publication of Labour's independent Start-Up, Scale-Up Report on 8 December 2022. Full report HERE.
A vibrant economy is underpinned by a dynamic culture of innovation and flexible structures that support entrepreneurs with sources of investment capital, knowledge-flow and market opportunities. As a previous national Entrepreneur of the Year, I have seen first hand how ideas can be supported to become reality, how start up businesses can successfully scale and how both profits and improvements to lives can be created together.
Britain has traditionally punched above its weight in such vibrant-ness, blessed with plentiful entrepreneurs, great ideas and an infrastructure to support sustainable growth. Only in recent years things have slowed down. Britain has become less dynamic.
Whether it’s in the absolute number of small businesses or scale up IPOs, or the relative number of patents and patient capital invested - we are going backwards and no longer building on our natural competitive advantages. Global economics may be partially responsible for the absolute figures, but the relative figures must squarely be attributed to an unstable, business-confidence sapping government that is out of ideas to help entrepreneurs thrive. Be that through creating uncertainty in export opportunities, unsecure supply chains and reduced labour availability. Difficulties each traced back to political decisions, competencies and choices.
There is cause to be optimistic however in finding ideas for government lean-in to deliver support for Britain’s exceptional entrepreneurial talent and broad culture of dynamism. That optimism was boosted this week by the publication of the independent report ‘Start-Up, Scale-Up’, led by Lord O’Neill and commissioned by the Shadow Chancellor and the Labour Party. It was issued today and contains a treasure trove of ideas and opportunities of how government can super-charge sustainable economic growth through entrepreneurial innovation. Its goal is to encourage and support start up and scale up business to thrive.
The report is the culmination of six months’ work by its authors as they invited discussion, engagement, ideas and challenge from Britain’s entrepreneurs to understand what is possible. They listened at round table discussions, read submission ideas and brainstormed and hacked possibilities with a wide landscape of experts and people living the entrepreneurial experience. Their report challenges Labour to build dynamism into the country’s economic ecosystem. Labour seems very much to be up to that challenge, with strong commitment to adopt the report’s recommendations.
Those recommendations are deep and wide. Its core points, those that will unleash the biggest vibrancy, relate to capital availability, regional and minority inclusion, fiscal measures and in supporting commercialising the incredible research and knowledge talent inside British universities. The headline proposals include:
- Removing barriers to institutional investment in high growth firms.
- Helping make innovation born in universities become a reality; and
- Giving the British Business Bank real independence to allow it to bring in more investment into the economy.
Its detail recommends that a Labour government helps unlock institutional investment and patient capital by building engagement and understanding between institutional investors and Venture Capital firms. It calls for a transformation of the British Business Bank to ensure it has the level of independence, remit and aspiration it needs to succeed, as well as the ability to leverage external funds to amplify its work. It further calls for it to use its support to foster clusters around groups of universities to drive growth and investment across the whole of the UK. And it recommends ways for government to help translate world-leading British research into growth through publishing annual dashboards of universities’ offers to spinouts. Further recommending that all universities offer a range of options for spinout founders to choose from, including an option where the university keeps a relatively small stake of equity. It also highlights how important the fiscal incentive schemes, such as SEIS, EIS and R&D Tax Relief, are to unlocking investment and growth, and how they can be enhanced and protected.
I have paid close attention to Lord O’Neil’s work in recent months, because I wear three hats in this space. As the founder of one of the UK’s profile start up and scale up successes, I had ideas to contribute and experiences to share with the authors. As Chancellor of a leading British university, one that has global standard excellence in its research, spinning out successful businesses has been something I have been addressing. As a supporter of the Labour Party and active in evolving its offer as the party of business, I know that the proposition of a Green Prosperity Plan, a partnership approach to economic success, the creation of a National Wealth Fund and an ecosystem whereby Britain is the best place to start and grow a business is popular and beginning to resonate. I am uplifted by the report’s tone, I am confident Labour is astute enough to adopt the key recommendations and I know it is competent to ensure that its manifesto, when it comes, will give confidence to Britain’s entrepreneurs. That will bring the opportunity to once again create a vibrant, dynamic economy.