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The power of threeTogether, governments, entrepreneurs and
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The EY G20 Entrepreneurship Barometer 2013
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United Kingdom at a glance
Compared with many other G20 countries, the environment for entrepreneurs in the UK is afavorable one. New and growing ventures operate on a solid foundation of business-friendlyregulations, generous tax subsidies, good availability of skills from a solid education systemand the countrys dynamic nancial markets. All of this gives the country an edge and has led
to high levels of new business activity, relative to many other G20 economies.
Given the UKs difculties in tackling its high rate of
unemployment and low economic growth, supporting the growth
of fast-growing and innovative businesses is vital. Overall,entrepreneurial businesses account for 99.9% of all businesses in
the UK, and 59.1% of all employment, according to the Federation
of Small Businesses.1Crucially, these smaller businesses account
for two-thirds of all the new jobs created in the UK in an average
year, according to the University of Nottingham, which highlights
why it is important to foster and support their growth.2Of course,
few of these companies are the innovation-led high-tech start-ups
that gather the most headlines, but rapidly expanding companies
that deliver real and sustainable growth across a range of
sectors often dubbed the gazelles are what count most here.
The underlying preconditions for bolstering the UKs
entrepreneurial ecosystem are already well established.
For example, 71% of local entrepreneurs say that the countrys
culture is supportive of their efforts. Across the G20, only in
Japan is entrepreneurship encouraged more as a career choice.However, there is no room for complacency. British entrepreneurs
still face several tough challenges, especially in relation to funding.
The latest gures from the Bank of England suggest that bank
lending to smaller ventures contracted in 2012.3In the survey,
about three in four UK entrepreneurs reported that access to
bank loans has deteriorated over the past three years. Just 22%
feel that access to funding in the UK is easy, falling to just 11% for
those aged under 40. Despite the UKs nancial sophistication,
there are clear challenges in securing funding.
Furthermore, there are signs that the ongoing economic downturn
has led to a dip in the UKs performance on various innovation
Iain Wilkie
Strategic Growth MarketsLeader, UK&I, EY
Bjrn Conway
Government & Public SectorLeader, UK&I, EY
Solid entrepreneurial ecosystem butconcerns in some key areas
Key facts
Overall Barometer ranking Quartile 1
Population 63 million
GNI per capita (PPP) US$35,800
GDP growth 0.3%
Exports as % GDP 32.5%
Source: The World Bank, 2012
1 Small Business Statistics, Federation of Small Businesses website, fsb.org.uk, accessed 16 June 2013.
2 Small rms driving UK job creation, University of Nottingham website, nottingham.ac.uk, accessed 22 June 2013.
3 Bank of England, Trends in Lending: July 2013(Bank of England, 2013).
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Weaknesses
While access to funding is strong in the aggregate, efforts
to increase funding to small businesses have struggled.
Despite high levels of spending on education, there are
weaknesses in tertiary enrollment and in second-level
vocational education.
Asked whether coordinated support has been improving
or deteriorating, UK entrepreneurs are among the most
pessimistic in the G20.
Opportunities
The UKs strength as an innovation center gives it a strong
position in high value-added industries.
There is scope to boost direct support for exporters. In
2010, the UKs export credit agency provided nancial
support totaling 2.9b, almost none of which wentto entrepreneurial businesses. Its German equivalent
provided 32.5b, with 73% going to entrepreneurial
businesses, according to UK think tank Civitas.4
Threats
A growing number of indicators show signs of economic
recovery, but domestic demand may be fragile for some
time, particularly as real earnings have been falling for
ve years.5
Uncertainty continues to hang over the Eurozone,
a pivotal export market for the UK, although, moreencouragingly, the local UK economy appears to be
improving.
Strengths
The UK provides a business-friendly regulatory
framework and a tax system that is broadly supportive of
entrepreneurship.
The country boasts one of the strongest innovation
cultures in the G20, with high levels of R&D spending and
employment.
The nancial services sector is one of Europes largest,
and entrepreneurs enjoy solid access to growth and
expansion capital.
indicators, including the number of patents registered each year.
Close attention will need to be paid to ensure that this trend
is reversed. Nevertheless, the country remains an innovation
leader, with spending and employment on research and
development (R&D) both coming in well above the G20 average.As bets the countrys strong history of discovery, output of
scientic and technical journal articles is also high, at more than
double the G20 average.
SWOT analysis
An innovation leader, but with room for
improvement on nance and educationThe UK provides its entrepreneurs with a well-developed
ecosystem that continues to evolve in line with efforts to move
more new business activity up the value chain. The country has a
strong innovation base, and new tax incentives aim to boost the
commercialization of R&D in the country. From a tax perspective,
the UK is one of the few countries in the G20 that is actively
lowering its corporate tax rate in order to stimulate business
activity. However, access to funding for local ventures is cited
as an ongoing concern by entrepreneurs, in particular for small
businesses or those started up by younger owners.
Make your voice heard
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01
2
3
4
5
6
7
8
UK
Mature economies G20 average
Coordina
tedsu
pport
Educ
ationan
d
training
Taxa
ndregu
lation
Entrep
rene
ursh
ip
cultu
re
Access
tofund
ing
UKs pillar scores compared to mature G20 economies average
Source: EY G20 Entrepreneurship Barometer 2013
4 Proactive export policies needed to target critical emerging markets, Civitas website,
civitas.org.uk, accessed 27 June 2013.
5 B Maule and A Pugh, Do Ination Expectations currently pose a risk to the economy,
Quarterly Bullettin 2013 Q2 Vol 52 No 2(Bank of England, 2013).
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What to watch for
Efforts to boost business lending intensify,
but clear challenges remain
At a headline level, in terms of how accessible funding is for
entrepreneurial ventures, the UK appears to perform well in the
EY G20 Entrepreneurship Barometer 2013. However, with the
economy yet to emerge convincingly from a protracted downturn,
long-standing concerns about the ow of credit to start-up
businesses remain.
On some measures, the UK does well in terms of providing capital
for early stage businesses. For example, The World Economic Forum
rates access to venture capital as 3.4, on a scale from 1=impossible,
to 7=very easy, which compares well to a G20 average of 3.0. But
on access to seed and start-up funding for earlier-stage businesses
more generally, the situation is less positive, with weaker results
reported in the Barometer in areas such as public aid and family
funding.
For later stages of business expansion, banks are typically a key
source of funding. Indeed, given the disproportionate reliance of
smaller businesses on bank lending, much of the policy attention
has been focused in this area. In 2012, the UK Government and theBank of England launched the Funding for Lending scheme (FLS).6
The scheme works by providing cheap funding to banks that commit
to increase their lending.
According to the latest UK lending data, despite the introduction
of the FLS, net bank lending to small businesses fell in 2012 and in
the rst three months of 2013.7This doesnt take account of FLS
revisions in 2013, which sharply increased the incentives for lending
to entrepreneurial businesses, but it highlights that the ow of bank
credit is weaker to large enterprises than to smaller ones. In the EYG20 Entrepreneurship Barometer 2013, 75% of entrepreneurs in
the UK say that access to bank loans had deteriorated over the past
three years, compared with just 11% who say it has improved.
The Bank of England has suggested that one factor in the dip in
small business lending in 2012 might have been an increase albeit
from a relatively low base of the availability of alternative sources
of nance, such as peer-to-peer lending, crowdfunding, angel
investors, venture capital and private equity houses.8
These and other potential alternatives ought to be a focus of
ongoing policy attention, particularly given how crucial the
availability of equity capital is to high-growth businesses. As well as
being a source of funding, a frequent benet of equity funding isthat it is often provided by investors who have specic expertise that
they can contribute to the business.
72%of entrepreneurs in
the UK think that
access to funding is
difcult
2.4bNet drop in bank lending
in Q4, 2012, following
introduction of new Funding
for Lending scheme9
Recent trends in net lending to UK small- and medium-sizedenterprises (in GBP billion)
2Q11
3Q11
4Q11
1Q12
2Q12
3Q12
4Q12
1Q13
-2.5
-2.0
-1.5
-1.0
-0.5
0.0
Source: Bank of England, 2013
Proportion of entrepreneurs citing improvement across access
to funding instruments
IPO
Bank loans
Bank loans
Private equity
Suppliers
Customers
Venture capital
Angels
Family
Public aid
Microfinance
Angels
Crowdfunding
3.6%
10.9%
10.9%
23.6%
7.3%
21.8%
9.0%
32.7%
23.6%
25.4%
29.0%
32.7%
41.8%
Expansion
Growth
Start-up
Seed
Source: EY G20 Entrepreneurship Barometer 2013
6 R Churm and A Radia, The Funding for Lending Scheme, Quarterly Review2012 Q4Vol 52 No 2(Bank of England, 2012).
7 Ibid. ft 68 Ibid. ft 79 Lending drops in Q4 despite Funding for Lending scheme Financial Planner website,
nancialplanneronline.co.uk, accessed 27 July 2013.
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How the government is helping
The Patent Box
This is a tax incentive designed
to encourage increased
commercialization of innovation in
the UK. It provides a preferential
10% rate of corporation tax for
any business prots that can
be attributed to patents. Thisincentivizes the commercial
exploitation of patents in the UK,
while the Governments R&D Tax
Credit provides incentives for
businesses to carry out R&D in the
country.
Launch date: 2013
Most relevant pillars:
entrepreneurship culture, tax and
regulation
Funding for Lending
The Government launched the
Funding for Lending scheme with
the aim of boosting bank lending
to small businesses. Under the
scheme, banks can access cheap
funding if they commit to increase
their lending. The scheme runsuntil the end of 2015, and was
revised in 2013 to increase the
incentives for lending.
Launch date: 2012
Most relevant pillar: access to
funding
Regional Growth Fund
The Regional Growth Fund (RGF)
provides public funding to support
growth-focused projects and
programs that are also tapping
private sources of investment.
The RGF operates in England until
2016, with a total fund value of2.6b ($4.0b) and a minimum bid
threshold of 1m ($1.5m).
Launch date: 2011
Most relevant pillar: access to
funding
Key insight:more than the sum of its parts
Scott Button, Co-Founder and CEO, Unruly Media, UK
Unruly Media works with leading brands to deliver their social
video advertising campaigns. Since it was founded, it has
operated in Londons agship technology cluster the so-
called Tech City. Co-Founder and group CEO Scott Button
stresses the importance of entrepreneurial ecosystems.
Unruly Media has been operating out of Silicon Roundabout(now rebranded as Tech City) since it was founded in 2006.Over that time, CEO Scott Button believes that this niche start-
up ecosystem has gone from strength to strength.
The term Silicon Roundabout was a bit of a joke initially, but ithas done very well in terms of fostering a sense of communityamong entrepreneurs here, with sharing and exchange ofpeople and ideas, he explains. The district has expandedrapidly in recent years. In early 2013, there were an estimated300 start-up companies there,10and as recently as 2010 therewere only 85.11
Button believes that Unruly Media has benetted considerablyfrom being located alongside so many similar businesses.There is no doubt we have learnt from other high-tech
entrepreneurs here. Having the company of other people facingthe same challenges staves off loneliness. It has also stoppedus making mistakes as we have grown. As you scale you faceall sorts of organizational and management issues that youvenever had to deal with before. You can bring in new seniormanagers to deal with that, but being here has let us tap intosome of the same experience, a bit like the benet you get fromhaving experienced investors work with your business.
In December 2012, the British Government committed50m to regenerate Silicon Roundabout into Europes largestindoor civic space equipped, among other things, withstate-of-the-art 3D-printing technology.12Button believesthat the government should play a continuing role in thetech ecosystems development. They can raise the prole ofTech City and help develop a sense of identity for high-techentrepreneurs. It just doesnt have the same kind of status inthe UK yet that it does in the US. We need top talent drawn toentrepreneurship, hungry for success.
10 Tech City: the magic roundabout, The Guardian website, theguardian.com, accessed 2 July
2013.
11 Londons Silicon Roundabout,Wired website, wired.co.uk, accessed 29 June 2013.
12 Londons moment: The tech cluster in the east of Britains capital is on a roll, Wired website,
wired.co.uk, accessed 29 June 2013.
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Access to funding
Pillar ranking: 2
UK entrepreneurs say bank credit is crucial,
but hard to obtain
The UK performs well in the EY G20 Entrepreneurship Barometer
2013 for access to funding. The country leads the G20 on the
extent of domestic credit in the private sector, with a rate as a
proportion of GDP that is more than double the G20 average.However, there are clearly challenges on the ground, with 70% of
entrepreneurs describing access to funding as difcult. Younger
entrepreneurs nd it even more difcult with just 11% considering it
easy to access funding.
At the heart of the challenge is the fact that bank lending to
entrepreneurial ventures is far more limited than it is to larger,
well-established companies. Local entrepreneurs identied bank
loans as the most important funding instrument for boosting
entrepreneurship over the long term. However, only 11% said that
access to bank loans had improved over the past three years, while
a striking 75% said it had greatly deteriorated. Access to funding
in the UK is tough. Weve got to create an ecosystem here with a
broader range of nancing options available for entrepreneurs,
argues Young Brits Networks Alex Mitchell. He advocates looking
at regional banks, using a model similar to the Sparkassen model in
Germany, as one example of how conditions might be improved.
In the absence of other formal channels of funding, new types
of funding are being made available. For example, 42% of
entrepreneurs cited improvements in crowdfunding, on the back of
a range of new platforms that have emerged in recent years, such
as Seedrs, Crowdcube and BankToTheFuture, among others.13All
this highlights the strong potential for innovation in nance in the
UK, but more progress is urgently needed. More could be done to
bolster other sources of early stage funding, such as angel investors
and venture capital rms. For example, improved tax incentives for
risk-taking equity investments, for both entrepreneurs and their
backers, especially angel investors, ought to be a priority.There are also other means of support available at a government
level, such as reforming procurement processes to make them more
workable for smaller businesses. Recommendations to this effect
have been made elsewhere, such as in Lord Youngs 2012 Make
Business Your Business report, but not enough change is yet being
seen on the ground.14
For more mature businesses, conditions are typically better, but
could still improve. For example, the volume of investment raised
through initial public offerings (IPOs) is above the G20 average, but
concerns remain. Only 4% of local entrepreneurs feel that access
to IPO nancing has improved over the past three years, while 51%
say it has deteriorated. Nevertheless, there have been positivedevelopments in other forms of funding. For example, in 2011, the
Business Growth Fund was set up with 2.5b to make long-term
equity investments.15It seeks to match any capital with experience,
advice and insight, and is focused on helping expand the rapidly
growing gazelles that are most valuable for job creation in the UK.
Access to funding United Kingdom G20 average Period
IPO market activity
IPO amount invested(% of GDP)
0.33 0.22 2009-11 average
Access to credit
Domestic credit to private sector(% of GDP)
209.5 99.0 2008-10 average
Venture capital availability (Scale of1=impossible to 7=very easy)
3.4 3.0 2009-11 average
M&A deal value (% of GDP) 5.8 3.4 2010-12 average
Sources: The World Bank, Dealogic, IMF, World Economic Forum
71%of entrepreneurs in the
UK surveyed believe that
improved access to bank
credit would improve
long-term growth in
entrepreneurship
Only 4% of local entrepreneurs
feel that access to IPO
nancing has improved over
the past three years, while
51% say it has deteriorated
Entrepeneurs view on how easy or difcult it is to access funding
Very easy
Somewhat easy
Somewhat difficult
Very difficult
Dont know or no opinion
0% 20% 40% 60% 80% 100%
Young entrepreneurs(up to 40 years old)
All entrepreneurs
Source: EY G20 Entrepreneurship Barometer 2013
13 Crowdfunding Takes Hold in the U.K. The Wall Street Journal website, online.wsj.com,accessed 21 June 2013.
14 Lord Young, Make Business Your Business: Supporting the startup and development of
small business(Crown, 2012).15 About us, Business Growth Fund website, businessgrowthfund.co.uk, accessed 14 June
2013.
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Entrepreneurship culture
Pillar ranking: 6
Strong cultural support for entrepreneurship
and innovation
The UK ranks highly among its G20 peers as a supportive place
in which to be an entrepreneur. Seventy-one percent of local
entrepreneurs agree that the UK has a culture that supports
entrepreneurship, compared to a G20 average of 57%.
A wide range of factors underpin this cultural support for UK
entrepreneurs. For example, there is broad cultural appreciation
of famous entrepreneurs such as Richard Branson, as well as from
prime-time TV shows such as the BBCs Dragons Den. The privatesector also has a role to play in promoting entrepreneurialism,
with high prole programs such as The EY Entrepreneur of the
Year, a high-prole celebration of entrepreneurial achievement
for those who are serious about business and making an
important contribution.
Across the G20, only respondents from Japan noted more
favorable attitudes toward entrepreneurship as a career
choice. However, Alex Mitchell, the co-founder of Young Brits
Network, which seeks to provide a global voice for young UK
entrepreneurs, adds that this is also being driven by the high
rates of unemployment in the UK, especially among young
people and minority groups. The nancial crisis, the lack ofjobs and opportunities, these are all forcing people to reconsider
entrepreneurship as an opportunity to get into the world of work,
and to create value for themselves, he says.
To support these efforts, though, more could be to be done to
help develop the entrepreneurship culture, for example by not
stigmatizing business failure. While initiatives such as StartUp
Britain will boost rates of new business creation, it is inevitable
that not all of these will succeed. More needs to be done
perhaps through the media to convey the fact that business
failure is often a crucial step on the way to subsequent success for
an entrepreneur. A high-prole example is Dragons Den star Peter
Jones, who had to move back in with his parents at the age of 30,before going on to become a multimillionaire entrepreneur.16
Just 13% of local entrepreneurs said that business failure is
perceived as a learning opportunity in the UK, compared to
a G20 average of 23%. Accordingly, local entrepreneurs felt
strongly that more could be done to bolster their reputation as job
creators: 62% felt this would have a positive impact on the UKs
entrepreneurship culture.
The UK has a strong reputation for innovation, which the
Government continues to encourage with new incentives,such as a preferential 10% tax rate (the Patent Box), which
was introduced in 2013 and which applies to prots that are
attributable to patents. Overall UK spending on R&D is above the
G20 average, while the number of scientic and technical journal
articles published is the third highest after Australia and Canada.
Entrepreneurship culture United Kingdom G20 average Period
R&D spending (% of GDP) 1.8 1.6 2007-09average
Scientic and technical journal
articles (per 10,000 people)
7.6 3.3 2007-09
average
Cost of resolving insolvency(% of estate)
6.0 11.8 2010-12average
Source: The World Bank
71%of local entrepreneurs
agree that the UKs culture
supports entrepreneurship
compared to a G20 average
of 57%
Only 13% of entrepreneurs in
the UK see business failure
as a learning opportunitycompared to the G20 average
of 23%
Entrepreneurs views as to which factors will have the highest impactupon entrepreneurship culture
Promotion of the role of entrepreneursin creating new jobs
Improve communication aroundentrepreneurs' success stories
Promote the career opportunitiesoffered by entrepreneurship
Government programs providingeducation, funding and profile raising
G20 focus on and support ofentrepreneurship
Promotion of the high risk/high returndynamics of entrepreneurship
Improve tolerance of business failure
High-impact
Medium-impact
0% 20% 40% 60% 80% 100%
Low-impact
Dont know or no opinion
Source: EY G20 Entrepreneurship Barometer 2013
16 Fame & Fortune: Dragons Den star Peter Jones, The Telegraph website,
telegraph.co.uk, accessed 24 June 2013.
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Tax and regulation
Pillar ranking: 4
A strong focus on business-friendly rules and
regulations, but continued progress is needed
The UKs position as fourth in the tax and regulation pillar is driven
by its strength in delivering business-friendly regulations. The costs
and time involved to start a business are both low, for example.
However, our survey responses suggest that entrepreneurs are
wary about wider regulatory trends and increases in red tape, with
just 13% saying things had improved over the last three years,
compared to 44% who said they had deteriorated.
From a tax perspective, however, the UK Government has
made solid progress. It has embarked on a series of cuts to the
corporation tax rate, which will come into full effect over the next
two years, but which are already sending a strongly pro-business
signal to entrepreneurs. In April 2013, the main corporation tax
rate fell from 24% to 23%. It will be cut again to 21% in 2014 and
to 20% in 2015. This will leave the UK with one of the lowest
corporate tax rates across the G20. This should make a strong
impact as local entrepreneurs prioritized cuts in the corporate tax
rate ahead of simplication of existing tax rules (a direct reversal
of sentiment in the US) as the initiative that would do most to
improve the overall tax environment in the UK.
Beyond this, the most popular tax or regulatory change the
Government could introduce to boost entrepreneurship overall
would be to improve tax incentives for innovation. Ninety-ve
percent of entrepreneurs surveyed indicated that this would have
a medium or high impact to the entrepreneurial ecosystem. The
Government has made progress in this area recently though, such
as through its Patent Box tax incentives for businesses that can
attribute prots to the exploitation of patents.
Tax and regulation United Kingdom G20 average Period
Ease of starting a business
Start-up procedures (number) 6.0 7.6 2010-12 average
Time to start a business (days) 13 22 2010-12 average
Cost to start a business (% of income per capita) 0.7 9.4 2010-12 average
Paid-in minimum capital to start a business (% of income per capita) 0.0 17.9 2010-12 average
Business regulations
Time spent on tax issues (hours) 110 347 2010-12 average
Labor market rigidity
Cost of ring (weeks of wages) 22 50 2007-09 average
Labor and tax contributions (% of commercial prots) 10.2 24.0 2012
Taxation
Total tax rate (taxes and mandatory contributions borne by the
business expressed as a share of commercial prot)
35.5 49.7 2012
Indirect tax rate (taxes collected by the company and remitted tothe tax authorities)
20.0 14.2 2012
Source: The World Bank
The UK corporation tax
rate is set to continue to
decrease moving from
23% in 2013 to 21% in
2014 before decreasing
to 20% in 2015; this
leaves the UK with one of
the lowest corporate taxrates across the G20
Development of a government agencyto assist new businesses in complyingwith tax filing requirements, 5%
Reduction of indirect taxrates,11%
Simplification of tax rulesand regulations regardingcalculation of tax liability,20%
Reduction of corporateincome tax burden,29%
Reduction of personalincome tax burden, 35%
Source: EY G20 Entrepreneurship Barometer 2013
Preferred single initiative to improve taxation
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Education and training
Pillar ranking: 6
A strong educational backdrop, but clear room
for improvement
The UK performs relatively well in terms of the education and
training aspects of its overall entrepreneurial environment. One of
the factors underpinning this performance is a high level of public
spending on education. At about 5.5% of GDP, the UK spends well
above the G20 average of 4.8% and enrollment levels are also
above average overall.
However, there is mixed evidence about the degree to which
this spending is feeding through to support the specic needs
of entrepreneurs. One measure of output is provided by the
Programme for International Student Assessment (PISA), which
measures the performance of 15-year-olds in mathematics,
reading and science. Between 2006 and 2009, the UKs 15-year-
olds dropped from 17th to 25th in reading, 24th to 28th in
mathematics and 14th to 16th in science.17
When it comes to tertiary education, the pool of skilled talent
available has risen sharply as the proportion of the UK labor force
with a degree or other tertiary-level qualication has increased up from 26% in 2000 to 37% in 2011.18But there is still room
for improvement: at 57.8%, the tertiary enrollment ratio is well
below the levels of other mature G20 economies, such as the US
(89.8%) or Australia (76.0%).19This matters, not least because the
education sector is an important source of innovation. Education
sector R&D accounts for 27.2% of total R&D in the UK, well above
the average of 22.3% across the other G20 countries.
In terms of sentiment on the ground, local entrepreneurs report
improvements in several aspects of education and training. About
one in two (49%) note improvements in informal networks, while
34% cite gains in specic programs at universities and business
schools. There has got to be far more real advice, awareness
and understanding of what it is to create a viable business. In the
UK there are already some great examples of entrepreneurship
ecosystems with structure support across the whole journey; the
Business Wales One Stop Shop Service covers everything from
mentoring and tendering to international trade and employment
and is a good example of what a joined up approach can look like
adds Young Brits Networks Alex Mitchell.
But more could be done to bolster education and training. In
particular, corporate engagement with both schools and start-ups
could be much stronger, which could further bolster some of the
gains being seen in areas such as vocational education.
Education and training United Kingdom G20 average Period
Public spending on education (% of GDP) 5.5 4.8 2008-10average
Secondary school enrollment (total enrollment
expressed as a percentage of the populationof ofcial secondary education age)
100.6 95.0 2008-10
average
Tertiary enrollment (total enrollmentexpressed as a percentage of the totalpopulation of the ve-year age groupfollowing on from secondary school leaving)
57.8 53.5 2008-10average
Source: The World Bank
8/10UK entrepreneurs think
students need access
to specic training to
prepare for setting up
their own ventures
Tertiary enrollment in the UK
at 57.8% does not compare aswell with other mature G20
economies, such as the US at
89.8% or Australia at 76.0%
(200810 average)
Proportion of entrepreneurs citing improvement in education and training
programs over the last three years
Informal networks
Mentoring
Specific programs at university/business schools
Entrepreneurship conferences and seminars
Coaching programs for entrepreneurs
Dedicated entrepreneurship chairs inuniversities and business schools
Vocational education in school curriculum
Corporate engagement with local schools
Corporate engagement with start-ups
Government programs supportingentrepreneurship
Training period at schools
49%
40%
35%
33%
29%
31%
29%
27%
27%
25%
13%
Source: EY G20 Entrepreneurship Barometer 2013
17 UK Schools slip down world rankings,The Guardian website, theguardian.com, accessed2 July 2013.
18 Labour force with tertiary education (% of a total), The World Bank website, data.
worldbank.org, accessed 30 June 2013.
19 School enrolment, teriary (% gross), The World Bank website, data.worldbank.org,
accessed 30 June 2013.
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Support levels appear to be slipping
From mentors and entrepreneur networks through to
incubators, coordinated support is a vital aspect of the overall
entrepreneurial ecosystem. And it is one that the UK could
pay more attention to. This is most clearly the case in relation
to business incubators. While one in two entrepreneurs
surveyed across the G20 report noted that access to business
incubators has improved over the past three years, only halfas many feel the same in the UK. This is worrying, given that
UK entrepreneurs pointed to business incubators as the top
initiative to boost the long-term growth of entrepreneurship in
the country.
According to Alex Mitchell, the co-founder of Young Brits
Network, which seeks to provide a global voice for young
UK entrepreneurs, one problem is the complicated range
of support vehicles that are available. There are a lot of
high-prole awareness building initiatives, but from direct
feedback Ive had from entrepreneurs theres a feeling that
theres almost too many, that they change too often and that
its difcult for entrepreneurs to know where to start. Whenstarting out you are going to be on a steep learning curve and
you are always going to be time poor, so there is a real need to
cut through some of the confusion and ensure information and
initiatives are easy to engage with, easy to access and, where
possible, easy to implement.
This is not to suggest that progress is not being made at all.
In the UK, 41% of entrepreneurs surveyed believe that there
has been improvement in relevant clubs and associations over
the past three years, which also rate highly as crucial aspects
of support. Nevertheless, the category as a whole is one in
which more work could be done, to ensure that activities are
aligned, easy to access and complementary. We need toencourage and support entrepreneurs. Government can play
a key role in facilitating that, helping create the conversations
and platforms for entrepreneurs to meet, speak and work
together, says Mitchell.
Coordinated support
Pillar ranking: 17
45%of local entrepreneurs feel
that business incubators
would do the most to
improve the long-term
growth of entrepreneurship
in the UK
Top ve initiatives and organizations that could most improve the
long-term growth of entrepreneurship
Business incubators
Entrepreneurial workshops/support meetings
Government start-up/other programs
Entrepreneur clubs and associations
Teaming/mentoring
45%
44%
35%
33%
33%
Source: EY G20 Entrepreneurship Barometer 2013
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Rankings table
Ranking Access to
funding
Score Entrepreneurship
culture
Score Tax and
regulation
Score Education and
training
Score Coordinated
support
Score
1 United States 7.12 United States 7.67 Saudi Arabia 6.40 France 6.58 Russia 6.23
2 United Kingdom 6.86 South Korea 7.53 Canada 6.34 Australia 6.53 Mexico 5.89
3 China 6.75 Canada 7.45 South Korea 6.34 United States 6.50 Brazil 5.87
4 Canada 6.62 Japan 7.28 United Kingdom 6.19 South Korea 6.40 Indonesia 5.84
5 Australia 6.48 Australia 7.18 South Africa 6.10 EU 6.25 India 5.76
6 South Africa 5.95 United Kingdom 7.00 Japan 6.07 United Kingdom 5.98 China 5.75
7 Japan 5.81 Germany 6.88 Germany 5.84 Germany 5.89 Turkey 5.66
8 South Korea 5.75 EU 6.07 Australia 5.75 Argentina 5.85 South Africa 5.65
9 Brazil 5.67 France 5.68 Russia 5.65 Canada 5.81 Argentina 5.64
10 Indonesia 5.53 Russia 5.05 EU 5.48 Brazil 5.78 Germany 5.53
11 India 5.48 India 4.95 Turkey 5.45 South Africa 5.67 France 5.41
12 EU 5.41 Brazil 4.88 Indonesia 5.38 Saudi Arabia 5.66 Saudi Arabia 5.39
13 Saudi Arabia 5.25 Italy 4.67 United States 5.33 Italy 5.47 EU 5.37
14 Germany 5.23 South Africa 4.33 Mexico 5.21 Russia 5.46 South Korea 5.36
15 Russia 5.04 Turkey 4.30 France 5.12 Mexico 5.32 Australia 5.31
16 France 4.74 Argentina 4.06 China 5.07 Japan 4.72 Canada 5.29
17 Turkey 4.57 Mexico 3.96 Brazil 4.83 Turkey 4.39 United Kingdom 5.19
18 Mexico 4.42 China 3.88 Italy 4.76 China 4.35 Japan 5.04
19 Italy 4.03 Indonesia 3.80 India 4.39 Indonesia 3.88 Italy 4.97
20 Argentina 3.27 Saudi Arabia 3.38 Argentina 4.31 India 3.49 United States 4.85
About the EY Entrepreneurship Barometer model
The EY G20 Entrepreneurship Barometer
2013 introduces a model for scoring countries
across the ve pillars of entrepreneurship.20
The purpose of this model is to help identify
areas of relative strength by country and where
opportunities for improvement lie.
The model is composed of qualitative
information (from our survey of more than
1,500 entrepreneurs) and quantitative data
based upon entrepreneurial conditions across
the G20 economies. For each pillar, excluding
coordinated support, this information is
weighted 50-50 between qualitative and
quantitative inputs. For coordinated support,
given a lack of quantitative indicators, this is
based solely upon the survey responses.
The advantage of integrating both the survey
results and quantitative data is the ability to
provide an assessment of the current level and
the trends in a G20 entrepreneurial ecosystem
based upon local sentiment. To this end, ofcial
statistics (for example, on the average time
taken to start a business or the tax burden)
provide a baseline for each member country.
Survey information is an important
complement to the baseline picture these
statistics provide. Entrepreneurs feedback on
the pace of improvement or deterioration in
conditions in their countrys entrepreneurship
ecosystem is incorporated in the model
alongside the hard statistics.
Full details of the Barometers methodology
can be found on page 66 in the main EY G20
Entrepreneurship Barometer 2013 report.
20 Note: As per the G20 membership, this list comprises 19 individual countries and also the European Union (EU), as an additional
member. Our rankings show the performance of each country, along with an aggregate performance for the 27 EU Member States.
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Contacts
Iain Wilkie
Strategic Growth Markets Leader,UK&I, EY
+44 207 951 3410
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Government & Public SectorLeader, UK&I, EY
+44 207 951 1749
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