The UK was ranked among the top five countries for entrepreneurs in the G20. According to the EY G20 Entrepreneurship Barometer, the competitive tax system and business friendly regulation make the UK the best place to start and grow a new business in the EU.
The analysis consisted of setting each G20 country against five pillars. These pillars were: access to funding, entrepreneurship culture, tax & regulation, education & training and coordinated support. Also featuring in the top five countries for fostering entrepreneurship were Australia, Canada, South Korea and the United Sates.
Whilst mature countries provided the best ecosystems for entrepreneurship today, EY noted that rapid-growth markets are closing the gap. The organisation added that all G20 countries have opportunities to improve.
Access to funding was named as the most important area where improvements would help entrepreneurs succeed, according to the entrepreneurs surveyed. Globally 70 per cent of survey participants said that it is difficult for entrepreneurs to access funding in their country. Over half of entrepreneurs indicated that improving funding was the most effective way to accelerate entrepreneurship.
Almost half (46 per cent) of respondents that were aware of crowdfunding said that it has improved their country. This statistic suggests that entrepreneurs are seeking alternative sources of finance. Possessing a strong credit score will boost the chances of successfully receiving financial backing, whichever option is chosen, following Graydon’s tips can help achieve this. The UK scored 6.86, out of ten, for access to funding.
The entrepreneurship culture also plays a vital role in business start-ups and the overall economic environment. The UK registered a score of seven on this pillar, suggesting that laws strike a good balance between protecting creditors’ interests and offering entrepreneurs a chance. Globally just 15 per cent of entrepreneurs say their country has a culture that fully supports entrepreneurship.
Businesses can benefit from working with entrepreneurs as long as they manage the risk involved. Firms should always credit check a potential partner to ensure they are legitimate and viable. Having this information before entering into an agreement means that businesses can take preventive measures, such as taking out insurance, if necessary.
Whilst the UK has a relatively competitive tax regime, it scored 6.19 in the barometer. Some of the issues previously voiced by UK firms in regards to tax and regulation also appeared from a global point of view. For example 84 per cent of entrepreneurs want tax systems to be simplified and 38 per cent said they wanted the ability to voice their concerns on business regulations.
Effective education and training also helps entrepreneurs thrive and drive future growth. The research suggests that, although countries make significant educational investment, they are not always the educational options that foster entrepreneurship. In this regard the UK scored 5.98.
Coordinated support received the lowest score in the UK, which registered 5.19. This indicates that many UK entrepreneurs felt that disparate stakeholders, such as investors, business incubators and non-governmental organisations, are not being orchestrated for maximum effect.
Entrepreneurs can help drive the economy forward and whilst the barometer suggests the UK is doing well compared to the rest of the G20 improvements will need to be made in order for the UK to remain competitive.