And the most painful thing about rapid business growth is…?

largeIn my experience, after interviewing hundreds of business owners, the answer would be something along the lines of: retaining the company’s positive, creative energy amid a blizzard of horrific irritations, conflicting options and rank dumb questions.

On the evening of Monday February 23, at the British Library, we’ll be putting this question – and many others – to:

Here are the full details of the next Business & IP Centre Inspiring Entrepreneurs event, as well as videos from previous events; you can follow all the action and tweet your questions on Twitter via #BLGROW

The engine room of the economy: the UK mid-market

Which are the most important UK companies? Is there one segment that contributes proportionately more than any other? Why are we so obsessed with the FTSE 100 and startups?

In 2014, as editor-in-chief at DueDil and working with Investec and The Times, I helped to launch the first Investec Mid-Market programme, which:

  1. Identified and ranked the fastest-growing UK mid-sized companies, the Investec Mid-Market 100.
  2. Created the first ever index of the ongoing health and performance of the UK mid-market, the Investec Mid-Market Index.
  3. Held the first ever Investec Mid-market Summit (which I also chaired), featuring Dunnhumby co-founder Edwina Dunn, serial entrepreneur Sherry Coutu and victorious Ryder Cup captain Paul Macginley.

Read the special Mid-Market 100 magazine, explore the Mid-Market Index and watch the Mid-Market Summit. Or enjoy The Times’ coverage.

Inspiring Entrepreneurs: the Business & IP Centre at the British Library

As the economy reorientates around entrepreneurship – more startups than ever were founded in the UK in 2014; more people than ever are self-employed – so these novice entrepreneurs require support and advice during what can be a difficult transition.

The British Library’s Business & IP Centre is probably the UK’s single most important resource for supporting growing and new businesses. Some 400,000 people have passed through the BIPC doors since it opened in 2006.

Since its formation, I’ve been an ambassador for the BIPC and chaired the BIPC’s “Inspiring Entrepreneurs” series, hosting many of the UK’s most successful entrepreneurs – including the late Dame Anita Roddick (who held one-to-one workshops at the BIPC), Lord Sugar, founder Martha Lane Fox, Cobra Beer founder Lord Bilimoria, many of the new generation of digital entrepreneurs and dozens of manufacturers, service specialists, engineers and designers.

The events are broadcast across the Business & IP Centre’s UK library network, as well as to New York Public Library and via live webcasts. The Inspiring Entrepreneurs series is now sponsored by Barclays.

You can watch many of the “Inspiring Entrepreneurs” series on BIPCTV.

Immigration and entrepreneurship: the evidence

Do migrants soak up resources or contribute to the economy they arrive in? Does the traumatic experience of migration foster a naturally entrepreneurialism or make migrants likely to turn to welfare? In March 2014, a collaboration between DueDil and the Centre for Entrepreneurs produced ground-breaking research into the number of companies founded by migrant entrepreneurs in the UK.

To calculate migrant entrepreneurship levels, we investigated the number of active UK companies whose first registered director (not company secretaries) list their nationality as non-British. The results were astonishing:  are behind one in seven of all UK companies. Their entrepreneurial activity is near double that of UK-born individuals. They are on average, eight years younger than the typical UK-born entrepreneur and, among a number of nationalities, a greater proportion of migrant women start companies than among the UK population. The report gained worldwide media coverage.

In my role as Editor-in-chief at DueDil, I co-authored Migrant Entrepreneurs: Building our Businesses, Creating our Jobs with Matt Smith and Scott Craig from the Centre for Entrepreneurs.

Young entrepreneurs are holding their nerve while their parents fear failure

One piece of data that can strike fear into the minds of government officials is the level of company formations. It may not sound like a stomach-turner, but a surge of new businesses could offer reassurance when politicians are rightly keen to see unemployment continue to fall. Right now, there’s cause for jumpiness.

While the UK saw a record-breaking 526,446 new businesses formed in 2013, our appetite for enterprise may be on the slide. The 2013 GEM Report, the definitive take on such things, shows “total entrepreneurship activity” lower in 2013 than in 2012. It seems that, as the recovery takes hold, fear of failure is rising and we Brits are becoming more risk-averse. Those “necessity” entrepreneurs, who started their own businesses during the recession, are taking flight back to the haven of a full-time job.

Similar trends are in play in the US, traditionally a hotbed of entrepreneurialism. Startup rates there have been declining for three decades. But since 2008, the number of new companies created each year has been outstripped by those dying. It’s pretty dispiriting when we’d assumed we were in a new era of enterprise.

But new research DueDil is releasing today with Enterprise Nation shows an entrepreneurial outperformance by one section of society: the young.

We looked at the number of company formations in 2006, just before the recession, versus 2013, and found that the number of founders who were younger than 35 rose from 145,104 to 247,049 in the period. That’s a 70 per cent rise. The male to female split for 2013 company founders was 74 to 26 per cent. Business and management consultancy, IT, architecture, restaurants, mail-order retail, and “artistic & literary creation” are the favoured sectors for this new generation of entrepreneurs. Notably, more and more young people are also launching companies on their own, rather than with partners or co-founders.

Youth enterprise isn’t just a London trend. The areas that saw the biggest percentage rise in young founders were: North Ayrshire, with a 169 per cent increase between 2006 and 2013; Blaenau Gwent at 161 per cent; the Western Isles, 150 per cent; West Dunbartonshire, 144 per cent; Midlothian, 117 per cent; Merthyr Tydfil, 113 per cent; and Greater London with a 110 per cent rise. By contrast, the Northern Ireland counties of Fermanagh, Down and Armagh have seen a decline in the number of young founders through the recession.

Enterprise Nation’s Emma Jones argues that “young people are turning their interests into a way of making a living and benefiting from the freedom and flexibility that comes with being your own boss.” But might young people also turn away from entrepreneurship as the economy picks up? We may have passed a tipping point. According to UnLtd, more than 55 per cent of young people aged 16 to 25 now want to set up their own firm. Santander estimates that 80,000 UK university students run a business, and a quarter of these plan to turn it into a career when they graduate.

Will they hold their nerve? This is data worth watching.

This article was first published in City AM on September 29, 2014.

The entrepreneurial economy is taking off but we’re yet to realise its potential

At the launch of Global Entrepreneurship Week 2013, Vince Cable announced that “10 per cent of the UK workforce is engaged in entrepreneurship activity.” Then he ploughed on with his speech, leaving the audience wondering precisely what this was supposed to mean.

After decades of being politely sidelined, entrepreneurship is political and economic orthodoxy. Few question that enterprising people, of all ages, should be encouraged to start and grow their own companies; that running your own business is a sensible alternative to full-time employment; and that long-term national prosperity depends on the performance of small and mid-sized companies, not just FTSE behemoths.

But how are we performing as a nation? Is 10 per cent “entrepreneurship activity” a Manuel Pelligrini-like performance, or David Moyes? And are we matching the US’s dynamism, let alone the pent-up aspirations of the emerging economies?

The short answer is that we’re on a long-term upward curve, but driven significantly by the “necessity entrepreneurship” of the crisis years, when thousands were forced out of employment and into fending for themselves. But whether we have fully-adjusted to a new world in which economic activity is driven by individual high-performance entrepreneurs and companies, the evidence isn’t yet conclusive.

Cable’s “10 per cent entrepreneurship activity” figure was based on research into “total entrepreneurship activity” (TEA) from the 2011 UK Global Entrepreneurship Monitor (GEM) report, which identifies the proportion of working age adults who are either setting up or have been running a business for less than 42 months. In the latest numbers, released last week, the UK’s TEA slipped to 7.1 per cent. This is still, however, above the long-term 6 per cent trend.

And the true figure could be much higher. Professor Jonathan Levie of the Hunter Centre for Entrepreneurship at Strathclyde University says that the proportion of the UK working-age population who are intending to start their own business within the next three years, actively trying to start one, running a newish one, or running an established business topped 25 per cent for the first time in 2012. Add social entrepreneurs and “employee entrepreneurs” (people launching new products or services for their employers), and entrepreneurial levels would be higher still.

This passes the hunch test. Brits do seem to be catching the entrepreneurial bug and more than 500,000 new businesses were created in 2013. Young people increasingly want to start their own company. “It’s fashionable now to start your own business,” says Centre for Entrepreneurs chairman Luke Johnson.

There are signs that the economy is loosening, rebuilding around a more informal, entrepreneurial model. According to Nick Palmer of the Office for National Statistics, during the recession, many people turned part-time roles (such as providing gardening services) into fuller-time work. More and more of us participate, in a quasi-entrepreneurial way, in the “sharing economy”, using tools such as Airbnb, Storemates, Liftshare, and RentmyGarden to commercialise our domestic assets. The Royal Society of Arts’ Untapped Enterprise report reckons that 20 per cent of business owners started off by trading informally – a short-term headache for HMRC, but a healthy pipeline for the UK economy.

How is the UK set in a global context? Quite well. UK entrepreneurial activity outpaced Germany and France during the downturn, though we still lagged the US on the TEA measure in 2012 (12.7 per cent versus 7.1 per cent).

Only in Japan is entrepreneurship encouraged more as a career choice, according to EY’s G20 report on the subject. We are even, EY reckons, ahead of India and China in our entrepreneurship culture. (Mind you, it also ranks France top for entrepreneurial education and training.)

EY’s global entrepreneurial guru Maria Pinelli says Britain has all the right ingredients: access to finance, tax and regulatory climate, supportive culture, education. Add in better access to capital markets (offering opportunities to scale) and more co-ordinated support from incubators, mentors, and UK entrepreneurs will be ready to rock.

Self-belief and fear of failure remain our biggest emotional hurdles. In 2012, 43 per cent of the working age population said fear of failure would prevent them starting a business – even though these same people actually see business opportunities. The recession, says Levie, has left a profound “aftershock”. Many still crave the security of full-time employment. But in a fast-changing world, that “job security” may not feel secure for long.

First published in City AM on January 22, 2014.