Traditional methods for supporting UK entrepreneurs are not producing enough successful innovation-based businesses. A new approach, backed by government, could ensure more successful start-ups, delivering a much-needed boost to the economy.
Successful entrepreneurs are critical to a strong UK economy. They increase the competitive offering of new products and services, contributing towards greater market efficiency. They are also agents of innovation, pushing traditional industry sectors forward and establishing new markets for growth.
Innovation-based businesses should be supported and encouraged. But the most recent study of entrepreneurship around the world, the 2006 Global Entrepreneurship Monitor, showed the UK in the bottom half of countries supporting early-stage innovation-based businesses. We are not doing enough to nurture successful, innovative start-ups.
Most small businesses fail because the people running them have good ideas but no experience or understanding of how to turn them into businesses. They lack the skills to start and run a successful company. This is not just about investing money in entrepreneurial businesses — according to the CBI the government already spends £8bn a year supporting innovation and entrepreneurship — it is about the quality of the support available to early-stage businesses.
Securing proven, valuable business support in the UK is a huge challenge for small companies. There are numerous routes available, but none is accountable and few can demonstrate a consistently reliable path to success. The system is not designed with the entrepreneur in mind; it is complicated, difficult to access and contains a confused mixture of public and private offerings.
Permanent staff at government-funded bodies such as BusinessLink, RDA-funded business incubators, and university technology transfer officers, offer low-cost or even free help but the demand is high, the supply is low, and only a fraction of the people who need support receive help. The support staff are overwhelmed, often underpaid and rarely experts in running their businesses.
The private market consists of thousands of small consultancy firms, usually just one person, with their own ideas of how to help turn ideas into businesses and entrepreneurs into businesspeople. This is a market of happy amateurs. Standards are low, regulation is minimal and success is often measured simply on the number of meetings held between mentors and entrepreneurs.
We need a system where entrepreneurs know exactly where to turn for support, safe in the knowledge that they are on a proven path to success. The same system also needs to work for investors — allowing them to feel confident that businesses developed through the process are worth further consideration and possible investment.
We must move to a more systematic approach to helping entrepreneurs that is simple to deliver, can easily be scaled to accommodate the large numbers of people who require support, and offers a prescribed and proven route to success.
Enterprise Accelerator’s own approach — The EA Process — adopts all these principles. It does not tell participants what to do to succeed. It forces them to teach themselves so they learn by doing. It takes entrepreneurs through a series of clear steps, each one helping them understand how to succeed in a different area of business planning and management. Each step produces tangible progress in the entrepreneur’s business skills, enabling them to achieve the next.
The EA Process is a comprehensive approach to business support. entrepreneurs emerge with a full set of skills to measurably advance their own business, learned and practised by fulfilling tasks essential to building and running a successful company. It is efficient, providing bespoke and measurable support to enough entrepreneurs to make a difference. This is the first example of a consistent, scalable and measurable way to prepare early-stage companies.
A recent pilot of Enterprise Accelerator’s process showed the approach to be measurably more successful than any other at preparing innovation-based businesses for success. Since the pilot, it has received the support of the DTI and National Endowment for Science, Technology and the Arts (Nesta). Nesta is now using it to help early-stage entrepreneurs as part of the Creative Pioneers programme and for its own investment portfolio.
The UK has a huge base of great ideas and innovative thinkers. We must do more to support early-stage companies or risk losing out to other nations in the race to build strong new markets and a thriving economy.
Dr John Millar is the managing director of Enterprise Accelerator
The UK must improve its poor record of support for small entrepreneurs who are vital to a strong economy, says John Millar.