A new generation of entrepreneurs who will play a role in Britain’s future economic growth and prosperity is emerging with a little help from family and friends, according to a report from Global Entrepreneurship Monitor, written by Dr Jonathan Levie of Strathclyde, and Professor Mark Hart of Aston Business School.
The Global Entrepreneurship Monitor (GEM) UK 2010 report found that, overall, a recovery of entrepreneurial attitudes and intentions to 2008 levels was evident in the UK in 2010 after a slight dip in 2009. Nine out of ten start-up and new entrepreneurs in the UK in 2010 were opportunity-driven, findings show, which was higher than in most G7 nations, including the US.
GEM research also found that around half of early-stage entrepreneurs in the UK thought that starting a business was less difficult than a year ago, up from around a third in 2009. Similarly 38% of established business managers in the UK thought that starting a business was less difficult than a year ago, up from 24% in 2009.
Professor Hart said, "Entrepreneurship is more important now than ever. While early stage entrepreneurial activity has not changed much for many years, last year saw a recovery in people’s entrepreneurial attitudes, intentions and aspirations after a dip in 2009."
However, the climate for funding start-ups remained difficult in 2010, with some evidence of increased risk aversion among all types of funders including firm founders.
This adjustment to the new, more risk-averse funding climate, according to Dr Levie of the Hunter Centre for Entrepreneurship, was reflected in, "…an increased reliance by start-up entrepreneurs on 'love money' – cash from close friends and family. We also found that twice as many people reported being informal investors in start-up businesses in our 2010 survey than in any previous year. Love money, coupled with ambition and desire to succeed, has enabled many emerging entrepreneurs to combat the financial crisis."
The report also revealed some differences in entrepreneurial activity across the home nations of the UK. For the second year running, early-stage entrepreneurial activity in Scotland was less than two-thirds of the English rate, while Northern Ireland had the lowest ration of female to male early-stage entrepreneurial activity.
The GEM UK Report 2010 surveyed more than 10,000 people in the four home nations of the UK. Global Entrepreneurship Monitor (www.gemconsortium.org) is the largest and most comprehensive international study of its kind of entrepreneurial attitudes, activities and aspirations.