New analysis reveals that even though UK entrepreneurs generate £950bn in annual income, entrepreneurs in essentially the most progressive areas are struggling to entry the funding they should develop.
The variety of patents being granted by the UK Mental Property Workplace throughout the UK displays the amount of latest and progressive merchandise and applied sciences being developed throughout the nation. The report discovered that the East of England was essentially the most progressive area within the UK, with 15.4 patents granted per 100,000 adults in 2022. Different hotspots embody London, the South West and the South East, with, 11.4, 11 and 10.5 patents granted per 100,000 adults respectively.
The analysis additionally revealed that entrepreneurs within the UK are already adopting breaking edge applied sciences, together with AI. 35% of respondents to the survey acknowledged that their enterprise had already adopted AI in some capability, whereas one other 40% stated that whereas they’d not adopted AI but, they’re contemplating how to take action. The UK was recognised as a hotspot for innovation when the College of Oxford positioned it fourth within the 2023 World Innovation Index.
Modern companies struggling to scale up
Sadly, the areas the place entrepreneurs usually tend to spend money on innovation are additionally the areas the place entrepreneurial companies battle to scale up. The analysis reveals that whereas innovation within the East is prospering, the area additionally has the bottom survival price: solely 34% of companies began in 2016 have been discovered to be lively 5 years later. Equally, out of the 12 areas, London positioned eighth for enterprise survival and the South West positioned ninth, regardless of rating 2nd and third for innovation respectively.
Permitting innovation to flourish
With the intention to deal with roadblocks to development, we first must recognise the boundaries to, and drivers of, development for UK start-ups. The report maps the UK entrepreneurial economic system, defining its strengths and weaknesses, and highlighting potential areas for development.
Entry to funding could possibly be a crucial roadblock stopping progressive entrepreneurial companies from scaling up, with one fifth of entrepreneurs citing it as a prime barrier to development. Extra worryingly, in companies that are 2-3 years’ outdated, this quantity was 26%. The federal government and personal fairness trade must work collectively to create an surroundings the place entrepreneurs can extra simply entry funding for development.
Past entry to finance, development limitations embody the tax burden, which 24.25% of survey respondents stated was prone to maintain again development, and recruiting and retaining employees. 13.75% of respondents stated recruitment was a roadblock to development, whereas 12.5% stated holding employees was the issue. The UK wants to make sure that the home enterprise surroundings allows companies to develop, and that expertise is created and guarded at residence.
Jamie Roberts, Companion and Head of Investments South, YFM Fairness Companions, that commissioned the report, feedback: “As their monumental contribution reveals, entrepreneurs are the beating coronary heart of the UK economic system, and it’s crucial that the UK authorities creates an surroundings the place these enterprise can thrive. The federal government has repeatedly proven its dedication to fostering innovation within the UK, and has additionally highlighted the significance of innovation to a wholesome and rising economic system.
“Nevertheless, immediately’s analysis reveals that SMEs want higher help, significantly in the case of accessing finance to again their quite a few and various concepts. UK entrepreneurs even have a accountability to assist themselves, making certain they’re proactively trying to perceive how they will greatest entry funding, what funding is best suited for his or her enterprise, and what authorities schemes can be found to help. On this manner, we might help innovation within the UK flourish.”