Most countries strive to encourage entrepreneurship to try and stir economic growth and create prosperity for citizens.  This desire is especially great in the wake of recessions that dampen growth and cause unemployment.

In the UK, the Covid-related recession has been exacerbated by Brexit, and research from the Global Entrepreneurship Team (GEM) highlights just how crucial entrepreneurs will be to the recovery of the UK in the coming years.

The report shows that entrepreneurs are generally mixed in their reaction to the Covid response from the government thus far, with many arguing that much more needs to be done to support startups through their journey.

“The GEM survey undertaken in the last few months of 2020 showed a sharp fall in the number of individuals in the early stages of setting up a new business compared to the pre-pandemic high in 2019,” the researchers explain.

“This is hardly surprising, but the analysis has also shown that the entrepreneurial foundations of the economy and society are still strong and these will be crucial for the recovery after the pandemic and in dealing with the ongoing economic fallout from Brexit.”

Support for growth

The report found that access to finance remains one of the key barriers to growth for entrepreneurs in the UK.  The authors argue that better tax breaks for startups could go a long way to reduce early exits, while tax incentives for recruitment could help in the crucial growth phase.

There was also a strong desire for more entrepreneurial education at school age to sit alongside better technical education.  What’s more, the respondents said that better links between academia and industry could significantly boost growth in the wake of Covid and Brexit, especially if minority communities could be better supported.

“Those ethnic-minority communities that have borne the brunt of the pandemic in terms of infection, hospitalization and sadly deaths demonstrated their resilience by maintaining their previous levels of early-stage entrepreneurial activity (TEA rate) which were significantly higher than for the non-ethnic minority population,” the researchers explain.

“Clearly, the pandemic has had no damaging impact on the level of entrepreneurial activity by immigrants and ethnic minorities although it has depressed it for life-long residents and the non-ethnic population.”