Recession Fails to Deter Start-ups
The number of newly established business owners and those trying to start a business increased between 2002 and 2009, despite the recession, the Global Entrepreneurship Monitor has found.
The report from the Hunter Centre for Entrepreneurship at Strathclyde University, which surveyed 170,000 adults globally, found that 5.8% of UK adults were either starting a business or running a firm less than 42 months old in mid-2009. This compared with 5.5% in 2007 and 5.4% in 2002.
“It’s surprising that new business has been maintained, but in the recession a lot of people lost their jobs and took the chance to create their own business,”
said report author, Jonathan Levie.
“Another factor is that resources are relatively cheap, so there are buildings available at low rental costs and more job-seekers around so you can build a good team. Throughout history we’ve found recessions can be good times for innovative businesses.”
The global survey also revealed the UK’s entrepreneurial position internationally. It found that while start-up rates in the US fell by more than two % between 2002 and 2009, the overall percentage of the population running or starting new businesses was still higher than in the UK.
National Federation of Enterprise Agencies chief executive, George Derbyshire, said that there are more entrepreneurs in the US because the people are less risk averse than in the UK.
“People are more tolerant of risk over there. They have a different attitude to failure — if it doesn’t work, they get up and give it another go. The obstacle to many entrepreneurs here is the red tape and regulation that they perceive will hold them back, and the Government has made a commitment to resolve that.”
“British people tend to be cautious in their attitudes — for example, they may have concerns about starting a business in the current environment. However, those that are actually serious about it are starting up in very healthy numbers and I expect this to continue.”
The report also highlighted that business experts in the UK rated their country’s cultural support of entrepreneurship less highly than their American counterparts.
Commenting on the research, business minister, Mark Prisk, said:
“The Government is well aware of the challenge it faces to raise enterprise awareness and start-up activity in the UK. We will meet this challenge by making this decade the most entrepreneurial and dynamic in our history. This ambition demands a coherent and comprehensive strategy for enterprise.”