The UK’s support for entrepreneurship is not sufficient

The GEM study assesses each economy’s support for new and small businesses against a set of 13 ‘Entrepreneurial Framework Conditions’: 

1. Entrepreneurial finance: Is new business financing sufficient? 
2. Ease of access to entrepreneurial finance: Is funding easy to access? 
3. Governmental support and policies: Does public policy support entrepreneurship as a relevant economic issue?
4. Taxes and bureaucracy: Are taxes or regulations size-neutral, or encouraging of startups and SMEs?
5. Governmental programmes: Are quality government support programmes available?
6. School entrepreneurial education and training: Do schools introduce entrepreneurship ideas?
7. Post-school entrepreneurial education and training: Does higher education offer courses in starting a business?
8. R&D transfer: Can research be translated into new businesses?
9. Commercial and professional infrastructure: Are professional services and institutions sufficient and affordable?
10. Internal market dynamics: Are markets free, open and growing?
11. Internal market openness: Do regulations encourage or restrict entry?
12. Physical and services infrastructure: Sufficient and affordable physical resources.
13. Cultural and social norms: Is entrepreneurship encouraged and celebrated?

It assigns each economy a score for each condition between 0 (very inadequate) and 10 (very adequate), with a score of 5.0 for an individual condition considered to be ‘sufficient’. 

Those scores then contribute to the calculation of an overall score for the economy. The UK scored 5.0 or more for just five of the 13 conditions. The UK is not alone in failing to impress – while it achieved a ‘sufficient’ score on just five of the conditions assessed, that was the median among economies with per capita GDP greater than US$50,000 (approx. £39,000). 

All up, 12 high-income economies posted overall scores lower than 5.0 overall, including the UK’s 4.6.

The condition against which global performance was the poorest assessed the provision of school-level entrepreneurial education. Only five out of the 49 economies included in the study in 2023/24 scored 5.0, sufficient, or higher.

Entrepreneurial education at school level has long been a weakness – this year, six economies improved their scores on this condition by more than 25 per cent, and five economies’ scores against this condition declined by at least a quarter.

The UK scored 3.01 for availability of school-level entrepreneurial education.

Social support for women entrepreneurs was also rated unsatisfactory in 37 out of the 49 economies included in the study, while women entrepreneurs' access to resources trailed men’s access in 22 out of the 49 economies.

Just five economies offer women entrepreneurs both satisfactory social support and equitable access to resources: India, Qatar, Norway, Sweden and the United Arab Emirates.

 India was also one of only two countries, alongside the Republic of Korea, where fewer women than men said that they would not start a business based on fear of failure, despite seeing good opportunities to do so.

In all other economies, more women than men will not pursue the opportunities they identify.

The UK sits at the far end of the spectrum from India and the Republic of Korea – it posted the largest gap between the proportion of women and men saying they would not start a business because of fear of failure, despite seeing opportunity.

Still, challenges do not suppress ambition entirely. More 18-64 year olds in the UK expressed their intention to start a business than have done so in the 25-year history of the GEM research. For the second year in a row more than 10% of those who are in the ‘working age’ bracket but are not involved in any entrepreneurial activity said they intended to start a business within three years.

The UK has work to do to support these entrepreneurial individuals, who intend to start businesses, employ others and contribute to economic resilience – particularly in boosting government support and policies supporting entrepreneurship to a level deemed ‘sufficient’. The UK has slipped from 4.92, itself not considered sufficient, in 2012, to 3.66 in 2023.

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