The UK has slipped from 6th to 9th place in the 2014 Global Entrepreneurship and Development Index (GEDI), according to research by the London School of Economics and Political Science (LSE) and Imperial College.
Negative attitudes and low entrepreneurial aspirations are thought to be holding back UK entrepreneurs.
The overall UK performance in entrepreneurship is "world class." Yet, elements that make up entrepreneurship in the UK – ability, attitudes and ambition – are not as well balanced as leading US and Australian economies.
UK start up activity was seen to be innovative and backed by strong cultural support, yet the full potential of the UK entrepreneur was held back by negative attitudes and a lack of ambition -comparatively lower than in leading economies such as the US which came 1st, and Australia which ranked 2nd.
Fostering Entrepreneurial Education is Key
The answer to upping the UK entrepreneurial stakes, according to Professor Zoltan Acs of the LSE, is in increasing spending on education on entrepreneurship. He said:
“The UK ranks a solid 9th in the world and 6th in europe on the 2014 GEDI. This strong performance is supported by a competitive environment, a high level of human capital and a strong tech sector. The UK ranks higher on entrepreneurship then on global competitiveness or economic freedom globally. While it does better on gender equality then the European average it could do much better in this area. Most of this could be improved by increasing spending on entrepreneurship education.”
Data from more than 3,000 highly skilled individuals with business ideas, alongside data showing how each country supports entrepreneurial activity was use to rank each country in terms of entrepreneurial strength. 1st was the US, 2nd Australia and the UK ranked 9th - dropping three places.
Entrepreneurial Risks Hold British Back
While entrepreneurial activity in the UK was seen to be innovative, Britons were less likely to choose entrepreneurship as a career path because they had a wealth of employment options available to them. This created a reluctance to leave secure, well paid jobs for the uncertainty of starting up a business.
In the US and Australia, skilled individuals with business ideas were seen to be more likely to set up a business despite the risks. Innovative entrepreneurs were more ambitious to grow their businesses than their UK counterparts.
Entrepreneurship in the leading countries was highly valued which meant that highly skilled individuals are more likely to set up growth-oriented, high-quality businesses.
Researchers say that this type of ‘can-do’ environment provides a platform for aspiring entrepreneurs to develop a bigger network of contacts who provide support, in the form of advice even financial backing.
Professor Erkko Autio, study co-author from Imperial College Business School, said: “Although the UK is a world-leading entrepreneurial economy, our study shows that a relative lack of ambition and positive attitudes may hold the UK back from realising its full entrepreneurial potential…Enterprising people who are highly skilled should be encouraged to see setting up their own business as an exciting alternative to full-time employment. However, our report shows that many still crave the security of full-time employment.
This year’s GEDI index identifies the strengths and weaknesses of the economies of 120 countries and compares their entrepreneurial characteristics. The Index compared the experience of male and female entrepreneurs for the first time, to reflect the increasing participation and importance of women in entrepreneurship around the world.
The researchers found that the UK has fewer female entrepreneurs, relative to males, than many other countries such as Germany, the USA and Australia. They suggest that increasing female entrepreneurship could improve the UK’s performance.
All in all, negative attitudes as well as lack of ambition make UK 9th in Entrepreneur Index. Promoting entrepreneurial values and support through education is vital for improving the negative attitudes among British people who hesitate pursuing the entrepreneurial track.