UK’s hidden innovators could add over £15 billion to UK economy by 2012

Entrepreneurial self belief delivered through better mentoring and support is key to untapping economic potential in olderpreneurs, Black Minority and Ethnic and disabled community

April 11 2008 New research conducted by Cass Business School’s Centre for New Technologies, Innovation and Entrepreneurship (CENTIVE) sponsored by Microsoft, has revealed that a latent pool of hidden innovators could potentially add a staggering £15 Billion to the UK economy by 2012 if the right conditions were created according to the latest government figures.

The report, which combined in depth statistical research with qualitative case study analysis, was conducted over a six month period. It examined how we might unlock the barriers and pathways to entrepreneurial innovation in three important groups, recognised for their entrepreneurial potential:

- “Olderpreneurs” (those aged over 50)

- Black Minority and Ethnic (BME)

- People with a disability (including dyslexia)

Older entrepreneurs, ‘olderpreneurs’ could contribute an increased 17% of the potential uplift to the UK economy by 2012 and will be key to capitalising on this innovation opportunity as the size of this group expands over the next four years. With a wealth of experience and insight built up over their careers, this group has the highest rate of business success and longevity, with over 70% of startups lasting more than three years, compared with 28% for younger entrepreneurs. Moreover, with those over 55 set to account for a third of the UK population by 2025, older entrepreneurs are well placed to tap into the fast-growing potential marketplace through their shared experiences and understanding, the report reveals.

One of the report’s key findings is that entrepreneurial self-confidence is a critical issue for all the hidden innovator groups and a major barrier in pursuing an entrepreneurial path. However, it also reveals that this self-confidence can be nurtured if there is a culture of entrepreneurship to support it. Some of the critical steps to creating that culture are:

- Policy makers should be urged to provide equivalent support to the over 50s as they do to younger people - younger entrepreneurs need investment and support but that should be balanced against support for other parts of the entrepreneurial ecosystem

- Business support services must take diversity seriously - understanding barriers and helping to break them down

- Government should strive to change the image of entrepreneurship - make business ownership a mainstream ambition

- Encourage improvement as well as innovation - a successful and sustainable business doesn’t have to be completely unique

- Provide tailored encouragement and support - the right mentoring can have a dramatic effect on business success

Gordon Frazer, Managing Director, Microsoft UK, commented: “Technology, and software in particular, is an extremely powerful tool which enables innovation and entrepreneurialism. It provides a platform on which new ideas can be built, it breaks down barriers to entry for new businesses and allows access to markets far beyond traditional boundaries. It appears that as a nation, we’re currently only focussed on supporting a relatively small part of the UK when it comes to entrepreneurial and innovative potential. By tapping into the knowledge and passion of all our communities we can both drive economic growth and help to create a culture of successful start ups and growing businesses. We are passionate about helping the UK to become a nation of successful business owners.”

Julie Logan, Professor of Entrepreneurship at Cass Business School’s Centre for New Technologies, Innovation and Entrepreneurship (CENTIVE) and one of the report authors, said: “This report shows that in the UK we have a tremendous opportunity to capitalise on the rich pool of entrepreneurial and innovative talent that is held by groups in society that has previously been underutilised. There are some things that we can be doing to tap into this potential. This is as simple as helping to build entrepreneurial self confidence through better business mentoring and support. Faced with increasing global competition, part of the solution must be to make better use of the pools of talent already in existence and this means a renewed focus on what the older generation, disabled and BME communities can add to the economy.”

Trevor Baylis, inventor of the ClockWork Radio, said: “We need to create a culture in the UK which encourages and nurtures innovation across all groups in society. This is especially true for the older generation who have built up experience during their careers which enables them to identify and act on business ideas quickly and effectively. It seems to me that chance favours the prepared mind and I see some of the best innovations coming from this group. But we can help our olderpreneurs further by making sure that appropriate support and advice networks are in place so that great ideas become a reality.”

For the disabled community, the report reveals that technology has presented new opportunities to pursue entrepreneurial paths - whether by enabling better access to information or underpinning the business model, technology has fundamentally changed the way in which disabled people can innovate. Other key findings for the disabled community include:

- People with a disability are deterred from investigating the entrepreneurial path even though their enterprises are more likely to survive

o Between 15% and 20% of visually-impaired people investigating a business start-up actually start their business (in line with industry norm) o But they achieve a 95% sustainability rate after 3 years

- The education system is failing to recognise the entrepreneurial and innovation talent of disabled community

- Dyslexic innovators have increased levels of entrepreneurial ability and tend to be more creative with better than average skills in oral communication, delegation and problem-solving

The UK’s Black Minority and Ethnic (BME) group also has the potential to make a significant impact to the UK economy through greater levels of innovation and entrepreneurship. The report highlights that if the group’s innovative potential can be unleashed, an extra £10.6 Billion in economic uplift could be generated. Case study analysis reveals that strong community networks help to nurture entrepreneurial self-belief and ideas in this group and that technology has had a significant role in driving these communities through developments in social networking and online communication. The report also shows that technology has been one of the most important factors in making the entrepreneurial path more achievable and more accessible by breaking down barriers to entry and opening new markets. Other key findings include:

- BME businesses are evolving from traditional sectors like clothing and retailing with a new generation focusing on IT and business services.

- Ethnic minority new entrepreneurial activity is higher than in the white population and particularly marked among the younger, 18-34 age group.

- Indian entrepreneurs signal the business potential of the UK’s fast growing ethnic population

- Networking ability and international outlook gives the BME community an automatic entrepreneurial head start

The report was launched at the Cass Business School today. Representatives from the government funded enterprise organisation Make Your Mark, DEMOS and PRIME contributed to a lively discussion about how to achieve the ambitions expressed in the report. The event was chaired by Rebecca Harding, founder of the Global Entrepreneurship Monitor (GEM) study. She commented; “The UK has a strong track record of entrepreneurship and in many respects leads the enterprise field in Europe. But this report highlights the fantastic opportunity we have to unlock further innovation potential. It’s clear that these groups have some unique qualities that make them particularly good entrepreneurs and excellent innovators, who can add a great deal to the UK economy.”

ends

Additional Quote: Shriti Vadera, Parliamentary Under-Secretary of State for Business and Competitiveness, BERR. "This report recognises that in order to remain competitive, the UK economy needs to unlock the entrepreneurial talents of everyone - older people who have the experience to start businesses, women who comprise a significant source of the "enterprise gap" relative to the U.S., and certain ethnic minority communities and disabled people who are under represented in enterprise. Our recent enterprise strategy targets measures at these and other groups to help them start and grow innovative and profitable businesses. No country can afford to ignore the latent talents of anyone if it is to succeed in a fiercely competitive globalised economy."

Notes to editors: *The potential £15 billion uplift in entrepreneurial activity is based on recently released figures in the 2008 HM Treasury and BERR Report ‘Enterprise: Unlocking the UK’s talent’ which indicates that business survival rates are significantly higher than a decade ago - 92% of new VAT registered firms are still registered after one year and Make your Mark figures for BME businesses. For the purposes of the academic study within the report ‘Unlocking the Potential of the UK’s Hidden Innovators’ a potential uplift of £9 billion is a conservative estimate based on historical trends.

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