A study conducted by business intelligence firm Duedil in conjunction with UK Small Business Network Enterprise Nation and reported in City A.M., has revealed that the UK has seen a 70 percent increase in the number of young people aged under 35 starting their own business, from the period of 2006 to 2013. However, these entrepreneurial ‘Millennials’ face challenges. A white paper from financial services giant Ernst &Young (EY), entitled "Avoiding a Lost Generation" has identified these challenges along with imperatives to boost entrepreneurship, summarised below. The company used data from a survey of 1,500 entrepreneurs, most of whom were 40 and under and from the G20 countries, to compile its paper. Below are the key findings.
The challenges facing entrepreneurs
#1 Inadequate Training
According to the survey respondents, inadequate training is an issue. More than half of the entrepreneurs surveyed feel that entrepreneurial skills should be “specifically” taught.
#2 Difficult Access to Funding
Nearly three-quarters of the entrepreneurs believe that they need better access to funding (73 percent).
#3 Lack of a Supportive Entrepreneurial Culture
Just over half of those surveyed, (51 percent), feel that there should be more government support to create a more entrepreneurial culture.
#4 Burdensome Government Regulation
Just under a third of the respondents feel that reduced “government regulation” will accelerate entrepreneurship (29 percent).
#4 Society’s Low Tolerance of Business Failure
The entrepreneurs believe that business failure is seen as career failure, (22 percent), and a barrier to “future business prospects” (23 percent).
#5 Inadequate Incentives for Investors
A sizeable 41 percent of the entrepreneurs surveyed feel that tax incentives for investors will boost entrepreneurship.
#6 Inadequate Recognition of the Contribution of Entrepreneurs
Half of the entrepreneurs surveyed think that promoting the contribution of entrepreneurs in creating employment will have a “high impact” on entrepreneurship.
Five Imperatives to Boost Entrepreneurship:
#1 Expand the Choice of Funding Alternatives
According to the report, there is a call for access to innovative funding platforms such as microfinance and crowd funding, however, “any such funding needs to be backed up with wider support and mentorship”.
#2 Increase Mentoring and Broader Support
The report advocates a strong support “ecosystem” that includes “mentors/educators, business incubators, start-up programs, entrepreneurs’ clubs and associations. This should encourage networking and the dissemination of best practices”, enabling entrepreneurs to have access to “knowledge, opportunities and resources”. It also posits that unless entrepreneurs receive the necessary support, their efforts at entrepreneurship may fail, even if they are able to secure funding.
#3 Change the Culture to Tolerate Failure
Governments must act to promote the role of entrepreneurs in job creation, and society must become more tolerant of failure. A combination of role models, disseminating success stories, government support for education and raising the profile of entrepreneurs will improve perceptions.
#4 Target and Speed up Incentives
Governments can speed up access to funding through the following, according to the report:
- Tax incentives for investing in small businesses
- Simplified and more streamlined regulatory systems
- Tax breaks for corporate venturing
- Low Capital Gains Tax
#5 Reduce Red tape and Excessive Taxation
A third, (33 percent), of young entrepreneurs, have called for a single government agency to help them navigate the complexities of regulation. However, the report recognises that progress has been made in this area.
Why is this Study Important?
Although these findings are undoubtedly helpful to aspiring entrepreneurs, they also have pivotal significance in the area of job creation. 85 percent of new jobs in the EU are predicted to come from entrepreneurs and not the government or big corporations, so much is riding on the success of entrepreneurs. If, as the report suggests, Millennials need more support from the government and from society, in general, it is imperative that they are given it.