Think Britain is entrepreneurial? Think again, if you're to believe the latest academic ranking of entrepreneurial performance.
Britain has placed joint 14th in a new global ranking of the entrepreneurial performance of countries, behind the US (1st), Australia (2nd) and other European countries including Sweden, Switzerland, Iceland, Denmark and Belgium. (View the top ten ranking below.)
The Global Entrepreneurship and Development Index (GEDI) has been compiled by researchers from George Mason University, The University of Pécs and Imperial College Business School.
Why does the UK rank just 14th place? According to the research, the main issues that need to be addressed are encouraging individuals to invest in start-ups and giving entrepreneurs easy access to finance.
It isn't all bad for Britain, however. The UK scores 5th for its level of startup activity. This is thanks to the share of technology sector startups, the quality of the human resources in startup firms and the share of startups in areas where not many other businesses are offering similar products.
Yet Blighty remains weak in its entrepreneurial aspirations, coming 12th in Europe and 30th overall for the efforts of its early-stage entrepreneurs to introduce new products and services, develop new production processes, penetrate foreign markets, substantially increase the number of firm employees, and finance their business using venture capital.
The UK ranks in the bottom quarter globally for the number of individuals who have invested informally in other peoples’ start-ups over the past three years. Analysis suggests that the UK’s performance in this area was significantly affected by the financial crisis, although the rate of informal investment has subsequently increased.
It also ranks in the bottom quarter for the percentages of the population who personally know someone who has started a new firm; who perceive good opportunities to start a new firm in the area where they live; and who perceive entrepreneurship to be a good career choice.
According to the report's authors, access to capital for startups and SMEs in the UK continues to be a constraint. Even with recent policy initiatives to address these weaknesses, it will be crucial to examine access to finance in particular, and look at how policies might be improved/adapted.
“The good news is that there does not seem to be anything fundamentally wrong in the formal support system. The UK could significantly improve its performance through well-targeted policy measures, especially those encouraging individuals to invest in startups," says Professor Erkko Autio of Imperial College Business School.
Top ten ranking of entrepreneurial nations:
1. United States