Want more micro-businesses? Kick the mega-businesses out!
Lord Young’s report on micro-businesses contained some fascinating data pointing to radical change in the UK economy:
- in 1971 there were 820,000 small businesses in the UK; by 2000 there were 3.5 million
- since 2008, over half a million new businesses have been established
- 95.5% of all businesses are micro-businesses (with less than nine employees) accounting for 32% of private sector employment and 20% of private sector turnover – this makes micro-businesses a far more important part of the economy than SMEs with between 10 and 249 employees
- most notably the number of microbusinesses has been rising inexorably since 2000 – there are 40% more of them now whereas all other sizes of business have remained static or even fallen.
This is a very big shift in the way we work and generate wealth. My guess is that it is also having a big impact on social and political attitudes.
I wonder if anyone, for example, has explored a possible link between the well-evidenced growth in hostility towards the welfare state and the rise of the micro-business. It seems at least possible that if you have much larger numbers of people working as sole traders or leading businesses that they are less likely to have sympathy for welfare claimants exhibiting no entrepreneurial spirit. It’s not so much a ‘get on your bike and find a job’ but a ‘get on the internet and start a business’ attitude that might be growing.
It could also start having a very big impact on how we understand routes to a fairer economy. Both right and left see the growth of traditional organisations in the private and public sectors as the key to more jobs which ultimately leads to greater wealth shared out more fairly. The left, of course, tends to favour a bigger role for the public sector in this while the right tends to favour the private sector.
But if millions of people are establishing their own businesses then the imperatives shift. What is required is not the expansion of the leviathans of the public or private sectors but precisely the opposite. The big players would need to be encouraged to get out of the way to allow more business activity and hence more wealth to flow to the growing ranks of micro-businesses. That might mean looking very hard at all the subsidies, regulations, legal structures and political prejudices that keep those leviathans in place.
For example, how would we bring about a micro-business revolution in banking, energy generation, transport or construction? It can’t just be through the sort of exhortation and very minor interventions Lord Young recommends. Surely the oligopolies that exist in key parts of the economy that have yet to see a micro-business revolution need to face a more forceful policy challenge.
It’s not the amount of support for SMEs that’s the problem. It’s encouraging them to make use of it.
In his speech to the conservative party conference last year, David Cameron asserted that we need to do more as a country to get behind the “doers” and the “risk-takers”. In his mind – and indeed in the minds of most people – the entrepreneurial class are like energetic Jack in the Boxes. They crave to be unleashed; to act on every opportunity, to start a business and grow it as fast and as big as possible. Ergo, all we need to do is to get out of their way and give them the occasional leg up.
This has been the narrative underpinning the many pro-entrepreneurial initiatives launched by the government over the past few years. Take, for example, the StartUp Loans scheme. Originally available only to the under 25s, the offer of a low-rate business loan of up to £5,000 (and accompanying expert advice) has just been extended to anyone up to the age of 30, and there are now calls to remove the age limit altogether.
For more mature businesses, there a multitude of new support schemes such as the Enterprise Finance Guarantee, whereby the government guarantees to secure loans from lenders to businesses typically seen too risky for a conventional loan. Myriad other mechanisms have sprung up to support businesses to grow, among them the MentorsMe mentorship service, the GrowthAccelerator initiative and the various National Insurance holidays.
Put simply, the support for entrepreneurs clearly isn’t lacking. Indeed, many of the schemes are highly effective. Research indicates that businesses which use support are much more likely to grow than those who spurn it. As I alluded to in my last blog post, the real problem is that businesses either aren’t willing to grow or aren’t event aware of the support that is available to them.
According to Lord Heseltine’s acclaimed report on the UK’s economic competitiveness, 29 per cent of businesses experienced more or less static growth in employment (-1 or +1 per cent) over the last 3 years. Echoing these concerns, Lord Young’s report on business growth released just yesterday cited figures showing that only a quarter of SMEs have ‘a substantive ambition to grow’. Nor is the situation improving. Fewer SMEs in 2012 said they aimed to grow than said so in 2010.
Contrary to what you might expect, the way out of this conundrum is not necessarily to expand support for entrepreneurs. In his report for the then Conservative shadow cabinet in 2008, the entrepreneur Douglas Richards lamented what he, perhaps justifiably, perceived to be a bloated enterprise support industry. He calculated that there were 3,000 government-led business support schemes in existence, costing some £2.4bn to the taxpayer (albeit at 2003 figures). The result was that entrepreneurs were left bewildered at the sheer amount of options available to them. Judging from the recent conversations we’ve had with young entrepreneurs for our own research, this is still very much a concern.
So, to return to the challenge, if more support isn’t the solution then what is? Two answers may be found in Lord Young’s latest report. First, although not one of his most exciting proposals, the recommendation that 5 per cent of the budget of future initiatives be spent on marketing and advertising could be genuinely transformational. As he states, one of the reasons why the old Enterprise Allowance Scheme was so successful is because it had a simple message and some hard-hitting marketing that helped it to go viral. (If only something like the National Insurance holiday had this, it may not have had the disastrous take-up rates that were reported last week).
Now while this gets at the people who want to grow their business but don’t know how, it doesn’t necessarily do anything to move the many entrepreneurs who currently lack the ambition to expand. This is where the second proposal comes in. Lord Young has outlined plans for a £30m Growth Vouchers programme to find “innovative approaches to help SMEs overcome behavioural barriers to increasing growth.” The detail is notably lacking, but the intention of using behavioural science to encourage more entrepreneurs to expand their operations and take on staff is a compelling one (and something the RSA might have something to contribute to).
Neither of these proposals sound incredibly daring, but they could potentially leave a bigger mark on the growth intentions of the country’s SMEs than the rest of the report’s recommendations put together. Whatever the direction of enterprise support over the coming years, the less talk of “unleashing” and “unlocking”, the better. In the end, it’s meaningless if there’s nothing waiting to be set free.
Rewriting the script for UK manufacturing
A couple of weeks ago Matthew blogged about the need to voice a more positive case for manufacturing in the UK. He argued that we should promote not only its economic value, but also its potential social and environmental contribution.
Cognitive Behavioural Therapy teaches us how, through self-limiting beliefs and stories, we can talk ourselves into a funk. There may be many powerful forces working against a UK manufacturing revival, but a self-defeating script should not be one of them.
We should have a story that is inspiring but achievable, to work towards. Events conspired this week to suggest what that story might be, and how we at the RSA (among many others) might help it become a reality.
On Monday we launched our ‘Making at Home, Owning Abroad’ report. The research looks at the future facing the UK’s mid-sized manufacturers, and how they might adapt successfully. Dr Finbarr Livesey, the report’s lead author, spoke in the RSA’s Great Room, and we heard responses from the Business Secretary Vince Cable, and Julie Madigan, CEO of The Manufacturing Institute. You can listen here
In a nutshell, our report makes the following points:
- the economic landscape is shifting in ways that will undermine the logic of some globalised manufacturing over the next 10-15 years
- this is the result of a convergence of trends, such as rising production and transportation costs, greater automation and new production technologies, such as synthetic biology and additive manufacturing
- such convergence calls for a more concerted and active response than if we were considering only one or two trends in isolation
- the result of these changes may be a rejuvenation of regionalised and localised making, with a possible increase of c.100-200k UK manufacturing jobs
- potentially this would lead to lower trade as fewer ‘home-made’ goods crossed national boundaries, but a net positive result for the UK’s trade balance. This would result from falling imports and the acquisition of foreign productive assets, alongside continuing exports in specialist sectors
- this ‘reshoring’ could result in multiple benefits from a UK perspective including 1) an increase in manufacturing to rebalance the economy 2) a reduced trade deficit and 3) reduced greenhouse emissions from waste and transport.
In response, Vince Cable agreed that there were indeed reasons to challenge the fatalistic view of UK manufacturing. He cited anecdotal examples of reshoring and revival that provide some encouragement, along with a raft of policies – on taxation, skills, technology, finance and other things – that the Coalition are planning to cultivate the new manufacturing infrastructure over the next decade. However he was, as usual, refreshingly candid about the difficulties of forging a long-term industrial strategy in the short-term, tribal and adversarial culture of British politics.
Julie Madigan highlighted another reason for optimism: the power of consumer innovation. As production itself becomes commoditised and accessible, people will increasingly be able to hack and/or build their own products. The opportunity she argued, was to harness Britain’s natural flair for amateur tinkering, design and making with new production technologies and mainstream manufacturing. The result will be more great products making it to market.
This idea, in particular, was music to my ears….
For the past few months I’ve been talking to various makers and maker spaces, manufacturers, and other industrial innovation organisations like Nesta and the Comino Foundation about the potential to stimulate and sustain ‘new manufacturing’ through a series of regular challenge prizes. As RSA buffs will know, this was one of the main reasons the RSA was set up in the C18th, and it ran open innovation challenge prizes in various categories including manufacturing (called Premiums), until 1850. We’ve been working on trying to revive Premiums because it’s such a great (and now widely used) model for innovation and systemic change.
In the programme we’ve designed, each ‘Maker’ Premium would focus on a specific product brief which would meet a social as well as commercial need. The challenge will elicit ‘maker’ prototypes using the rudiments of the new local manufacturing infrastructure (e.g. Fablabs and Hackspaces) and link them with small, medium and large manufacturers with the resources to help them refine, scale and make their product locally. Over successive waves, we aim to foster the talent, technology, resources and infrastructure to help create the kinds of beneficial changes described in the ‘Making at Home’ Report, and flagged up by Julie. This will also help to support the aims of our sister ‘Great Recovery’ Project.
We’ve got a proposal for these C21st Premiums currently circulating among potential sponsors, partners and participants (contact me if you’re interested!). I’m waiting the reaction to see if it might be a goer. Hence my delight at hearing Julie’s comments.
Trying to get these things off the ground takes time and legwork. It can all feel rather abstract until the pieces fall into place.
But then another bit of my week brought it home to me. My colleague Hilary and I visited a new potential maker space in London that the RSA are hoping to co-create and grow with other partners, just a few minutes walk down the road. Seeing the space and planning what we intend to do in our first event there suddenly made it seem very real, very immediate and very exciting. Standing in the shadow of where Charles Dickens worked as a boy in a Victorian blacking factory, talking about laser cutters and 3D printers, the idea of mini-workshops and factories like this popping up everywhere is a strangely ‘back to the future’ thought. I remembered how Vince Cable told us how ceramics was coming back to Stoke, and textiles back to the North West.
The UK’s manufacturing future will be a curious blend of the old and new. We aim to make it an inspiring, if unusual story, in the writing and the telling.
Finance for SMEs: isn’t demand part of the problem?
How challenging is it for businesses to get their hands on finance?
The reason I ask this question is because I have nagging doubts about the recurring media headlines reporting that large numbers of SMEs are being denied the necessary credit to expand, and that the only way to create employment and return to economic prosperity is to force banks to ‘get lending again’.
No doubt the government subscribes to this view. It’s why only last week they extended the Funding for Lending scheme to 2015, and revised its terms to include more generous incentives for banks to dish out loans to their business customers. And on the face of it moves such as these are understandable. Research released this week by the Business Finance Taskforce, for instance, indicate that only 45 per cent of small firms received the funding they asked for from banks. Other surveys say much the same thing.
So why the scepticism? It’s not that I don’t think firms couldn’t benefit from finance – many no doubt would. Rather it’s that large numbers of businesses don’t have the confidence and ambition to expand their operations. In other words, the problem isn’t so much supply as it is demand. As the Barclays economist, Simon Hayes, said in response to the FLS expansion, “confidence is the elusive factor.”
Yet it’s not just cautiousness among CEOs and entrepreneurs that has cut back the demand for finance. Many of the young entrepreneurs we interviewed as part of our Disrupt Inc. research told us of how they wanted to grow their business but were reticent about relying on external finance, in part because they thought they could achieve their ambitions slowly but surely on minimum costs. Savings were often the preferable source of income. The same reasoning could be holding more experienced entrepreneurs back from applying for finance.
Finally, isn’t one of the biggest problems simply a lack of good ideas? When we hear stories of businesses being rejected by bank managers there can be an implicit assumption that the entrepreneur in question was entitled to the loan. But what if the business idea didn’t have any legs? It’s sounds obvious, but sometimes we have to remind ourselves that the supply of finance is dependent upon an equally good supply of feasible business propositions that deserve access to it.
Having interacted with lots of managers who run grant and equity programmes, one of the key challenges facing them is a set of poor, half-baked ideas. Indeed, it’s one of the biggest obstacles that will face the Big Society Bank. What we don’t want to see – but what is already happening in the third sector – is funding bodies giving money to ventures that have no chance of succeeding. That is neither good for the entrepreneur or the institution dishing out the capital.
So while we rightly lament cases where growing SMEs genuinely can’t get access to the funds needed to grow, create jobs and compete on the world stage, we should try and bear in mind that not everyone wants more capital, nor be in a position to use it effectively.
Sustainable communities through skill sharing
This post is by Jemima Gibbons FRSA. Follow her at @JemimaG
Tomorrow (Tuesday 30 April) the RSA in conjunction with Kingfisher plc will host a roundtable discussion looking at ways to build sustainable communities, with particular focus on skill sharing. The discussion will be chaired by Matthew Taylor, and will kick off with presentations by Ian Cheshire, Group Chief Executive of Kingfisher plc and John Compton, Manager of the Streetclub initiative. Participants will include 30 stakeholders from business, government and the third sector.
Since 2010, the RSA’s Connected Communities programme has been exploring communities of place as social networks. The project team is now testing the concept of informal skills sharing as a way of connecting people based on common interests and concerns, with the belief that this may lead to more sustainable, inclusive and empowered citizen networks. Meanwhile, Kingfisher plc is implementing a new approach to doing business which seeks to create social, economic and environmental value for business and community alike: its ambition is to make a ‘Net Positive’ contribution to society. This event is part of an ongoing series led by Kingfisher plc, exploring ways of building resilient, sustainable communities.
In the business world, an increasing awareness of finite resources at global level, combined with the ongoing need to solve big social problems and the change in consumer expectations have led to a boom in revenue models based on collaborative consumption. A host of new companies has been created with a sole remit – to encourage sharing between neighbours. Such businesses include Zipcar (shared cars and vans), Gocarshare (carpooling) and Storemates (space sharing). Big corporations ignore this new space at their peril – it is no surprise that major car companies like Hertz, BMW, Ford and GM have all announced partnerships or investments in car-sharing businesses in recent years.
For nonprofits too, sustainable communities seem to be a key obsession. Initiatives like The Big Lunch (founded in 2009 by Tim Smit of the Eden Project and funded by the National Lottery), Incredible Edible (led by RSA Fellowship Councillor Pam Warhurst), The Amazings (an offshoot of London agency, Sidekick Studios) and We Will Gather (set up by social artist turned activist Dan Thompson) all seek to foster community spirit in different ways. Meanwhile, new social enterprises and charities have been created to address specific social problems at a local level – such as repurposing disused shops and office buildings (3Space) or finding voluntary activities for under-employed young people (vinspired).
Even broadcast television has got in on the act, with Hugh Fearnley-Whittingstall/ Channel 4’s Landshare and the BBC’s DIY SOS – The Big Build calling on local communities to contribute time and resources to help their neighbours.
So, is facilitated skill sharing a good way to improve local communities? And how can businesses and other organisations persuade people at grassroots level that they have their best interests at heart? Will a ‘commercial edge’ start to become apparent (or harden) in business led community-building initiatives, or will they resist forms of direct marketing to participants (StreetClub, for example, has made it clear it will never direct market to its members)? Should we be leaving people to self-organise, or is a helping hand essential? How are common needs and interests brought to the fore? How can we motivate people? And how do we ensure that help reaches those who most need it? Tomorrow’s roundtable will seek to answer these questions – and more. Follow the #NetPositve hashtag on Twitter from 12.30pm for live coverage, and look out for our roundtable review in the next few days.
The world’s most influential economic policy maker is Plato. It’s not a good thing.
One of the best aspects of the RSA is its ethos of trusting in the general public to come up with solutions to big problems. Indeed the Society’s raison d’etre for a very large part of its existence was to offer cash prizes and honours to anyone who could develop new inventions or ideas in response to challenges set by the RSA. It was by this method, for example, that the Society played a central role in revolutionising agricultural practices in the eighteenth century.
It’s a spirit which seems in short supply these days. Since the Crash, the claim that only the state and its agencies can solve our biggest economic problems has grown ever louder. As a result, the arrival of a new Governor at the Bank of England becomes a matter of the gravest importance. The Government itself is divided no less than four ways over what interventions it should make to get us back to growth. And HM Opposition’s almost entire beef with the Coalition is about the failure to intervene sufficiently to revive the economy.
The irony (not to say political narcissism) in all this is that major shifts are already underway which will entirely reshape the economy over the next few years. An RSA report published later today reveals how rapid change in the manufacturing sector promises to bring production back to the very nations that have spent the last two decades furiously out-sourcing to China and elsewhere. This will have a huge (potentially positive) impact on jobs, productivity, exports and growth over the next few years. Is this change a result of government policy? Not at all. As ever in the highly innovative economic system that the RSA did its bit to create 250 years ago, it is driven by a combination of technological change and unpredictable socio-economic phenomena – in this case rising production costs in China.
As Paul Ormerod has shown rather brilliantly in his work, the belief that state policy can have predictable effects in the face of a complex, dynamic system like the economy is largely false. The reason the delusion persists is as much the fault of Plato as of Keynes or Friedman.
Plato’s great achievement was to place truth-seeking at the absolute heart of human life. More questionable, although clearly worthy of debate, was his claim that there is an absolute, pristine truth out there just waiting to be discovered. Downright abysmal, however, was his argument that those who had ‘discovered’ that truth were the most qualified to rule: a perspective that has led to all sorts of damaging elitism and autocracy.
And yet it’s this spirit that informs our policy more now than it has done in decades. In central banks, economists pull their monetary levers based on their models and (usually flawed) forecasts as an expectant, largely passive public looks on. While in government, economic analyses and views have an overwhelming influence on policy today. If you doubt this look at the way the discovery of a single data error in a single economics paper became a global news event a couple of weeks ago.
This is truly the age of the philosopher kings. We are increasingly ruled by people who believe they have some superior technical insight into the workings of our world which qualifies them to manage the whole thing. Again, if you doubt this, read this very recent post by the high priest of Keynesian economists (although this is a delusion that afflicts the Friedmanite right as much as the Keynesian left).
I’m struggling now to write a concluding paragraph. That’s because questioning the Platonic perspective means it is much harder to come to clear, simple conclusions. By contrast a Platonic view of the world inevitably leads you to strong recommendations: my analysis shows the world has this form, so do what I say. One very significant reason why it remains (albeit unconsciously) popular with governments and leaders who always have to be seen to be doing something.
Suffice it to say, however, that the economy itself will keep on developing and shifting in highly unpredictable and radical ways (with nudges from independent bodies like the RSA) while the policy makers maintain their increasingly intense cycle of activity always linked but never quite connecting in the ways they claim with that economic change. The economy, given enough time, has a way of making the politics and even the economists ultimately something of a sideshow.
‘Demonopolisation’: Thatcherism as though entrepreneurs really mattered
A poll found last week that only 26% believed public utilities were best run by private companies answerable to shareholders. Fully 61% thought they were better off located in the public sector.
This is a pretty resounding ‘no’ to the policy that came to define Thatcherism. It should also give the Government some pause given they are now planning another round of privatisation (£).
I think it is fair to assume that one key element behind the public hostility must be that those public utilities now in private hands are dominated by a small handful of companies that are disliked and distrusted. Firms that are seen as treating their customers as cash cows and offering poor service rarely win widespread public affection.
Despite the rhetoric of popular capitalism, Thatcher was better at delivering the capitalism part than the popular part
The problem originates back in the 1980s themselves when privatisation was delivered in such a way as to effectively replace public sector monopolies with private sector oligopolies. Despite the rhetoric of popular capitalism, the Thatcher era was much better at delivering the capitalism part than the popular part. Privatisation as it turned out was really a gift to a select group of big businesses rather than to a wider group of entrepreneurs and the general public. If the above poll is anything to go by, the result (as one might expect of an oligopolistic situation) is services delivered by organisations that are barely less remote from their customers’ interests than the public sector leviathans they replaced.
Given that harnessing the enormous power of popular innovation, enterprise and competition is a sound route to better products and services, the key question must be: can privatisation be done in a different way to prevent the rise of oligopolies and monopolies?
The Big Four Monopolies
We could do much worse here than look to the great nineteenth century opponent of monopoly, Benjamin Tucker. Tucker identified four areas of deeply embedded (and almost unquestioned) state-led practices that he felt kept business big in size but small in number and which effectively prevented a wider flourishing of entrepreneurialism and thus a fairer distribution of wealth and power.
Benjamin Tucker: Opponent of monopoly
The ‘Big Four’ for Tucker were:
- the protection offered to big banks through strict controls over who can issue currency and credit;
- the protection offered to big landowners by the enforcement of titles of ownership even if the owner has no link nor interest beyond the rent they can secure from the land;
- the protection offered to domestic companies through tariffs and subsidies;
- the protection offered to holders of intellectual property through patent and copyright law.
Others have noted that Tucker’s list is probably too short but nevertheless it is remarkable to note that (with the possible exception of tariffs), state intervention in these areas is as active now as it was when Tucker was writing in the 1880s. Were he alive today, Tucker would probably argue that it is hardly a surprise that we still face huge problems in relation to the use of and access to credit, real estate and, increasingly, intellectual property given that regulation ensures that the playing field is still skewed towards bigger, established and wealthier organisations rather than the smaller entrepreneur.
Demonopolisation
This actually directs the eye to another flagship policy of Thatcher – deregulation. For while some in Government may obsess about labour market and workplace regulation, they actually ignore the deeply embedded laws and rules that protect oligopolies and which do far more to prevent market entry, diversity and competition and ultimately undermine the potential benefits of privatisation.
Tucker’s approach suggests that the focus of any policy to spread the benefits of the free market into previously restricted areas should be on the dismantling of the legal structures that protect monopolies and oligopolies wherever they appear not primarily on the mere shifting of ownership from the taxpayer to shareholder. Demonopolisation rather than privatisation should be the goal.
Put another way, it is hardly worth privatising if such a process does not go hand-in-hand with a wider effort to challenge the legal and financial eco-system that favours big, established businesses over the small.
As the references to a long-dead political writer reveal, this is hardly a new area. But it seems to me to have added resonance today. If we are potentially on the brink of an entrepreneurial (or maybe I should say ‘venturist’) revolution driven by radically lowered costs for start-ups then to repeat the mistakes of previous privatisations would be less forgivable now than it ever was.
Has enterprise education fallen out of fashion?
In this guest blog, Tom Ravenscroft describes how the organisation he founded, Enabling Enterprise, is working hard to take enterprise education to the next level. Click here to find out more about their activities. Follow Enabling Enterprise on Twitter: @enablingent
The challenge
Enterprise education is not new or exciting. It appears less fashionable than five years ago, but the need for it is greater than ever before.
My personal engagement with enterprise education began as a new secondary school teacher in Hackney, East London in 2007. With my colleagues, I was deeply worried by the lack of basic skills demonstrated by many of our students – students who, at the age of 15 or 16, were unable to work in pairs, organise themselves to complete work, or speak in front of their peers in class. Coupled with their limited experience of the working world, it felt an abdication of responsibility to send them out into the real world so ill-equipped.
And the challenge certainly wasn’t just in my classroom: at the beginning of 2013, youth unemployment grew to over 20%, whilst the chorus of business concern about the employability of our school leavers only grows.
So, what’s gone wrong?
I didn’t mean to leave teaching to run a social enterprise. And a cursory glance might suggest that this is already a crowded field – why not just take up some of what is already out there?
I set up Enabling Enterprise in 2009 because I felt that there was a gap: for bringing enterprise education into the classroom, and side-stepping the false dichotomy between teaching knowledge and teaching skills.
There are some brilliant organisations out there, driven by the belief that enterprise education can and should contribute a vital element to children’s education. But one of the challenges is that schools sometimes acquire enterprise education programmes as they would collect badges – with variety being the most important thing.
And there is a danger of mistaking what is most glamorous for what is most effective.
An approach
At Enabling Enterprise we have been grappling with exactly these three problems over the last four years: How can enterprise become a real core part of the curriculum? How do we ensure that we’re not just another “badge” for schools? How do we make the development of enterprise skills as rigorous as acquiring knowledge?
Enterprise in the classroom:
We believe that effective teaching and learning, and the broader development of students’ skills, world experiences and aspirations go hand in hand.
To make this a reality, we partner with 25 top businesses including PwC, IBM and UBS to create year-long courses that teachers can deliver in their own classrooms, in the form of “lesson-time projects”. These projects focus on “learning by doing” – developing English skills through writing an anthology, learning Maths through a construction challenge, or learning about IT by creating their own web-based start-up.
Outside of the classroom, students have the opportunity to visit a business partner each term, meeting employees and linking their projects to the “real world”.
The model has been designed to be highly scalable by mobilising and equipping teachers to embed practical learning and skills development rather than trying to lead on all the delivery work ourselves. The result is that 4 years since our inception, we are working with 19,000 students across 130 schools.
Starting early
The second challenge, is that to move beyond just being a “badge” we need to have a coherent and systematic approach to encouraging enterprise from a young age.
There is a natural tendency to bundle up “enterprise” with “employability”, CVs and job applications. But there is growing evidence that by working from the age of 6, students develop the resilience and social skills that provide the foundation to their future success, twelve years later.
So we design programmes that systematically embed enterprise projects, complemented by business trips and challenge days, for students from Year 1 through to Year 13. At the beginning, the focus is on basic social skills and resilience. As they progress, the projects become more ambitious – fundraising, designing new toys, or running a café. By secondary school, students work on longer-term, structured projects like setting up a small business or a social enterprise by the sixth form.
Measuring the impact
Finally, to make it matter, you have to measure it: We have put a lot of energy into creating a framework for assessing progress towards our mission that is as robust an assessment as any other learning. To do this, we have worked with employers including Freshfields and UBS to identify what students need by way of skills and experiences at the point they leave school. This highlighted eight skill areas, including teamwork, resilience, presentation, leadership and personal organisation.
For each of these areas we then created a system of levelling that meant we could work backwards from this end goal, so that we can see quantitative progress made at each age. For example, by the end of a year on our programme we would want to see that an 18 year-old can set ambitious targets and understand the key milestones towards achieving them, whilst for an 11 year-old, we would just want them to be able to set targets with help from their teacher.
We use a combination of student self-assessment and teacher validation to level students at the beginning and end of the year, and in so doing are able to check that the projects are helping our participants progress towards successful futures.
And looking forward…
The journey for Enabling Enterprise is only beginning. While we work with about 19,000 students across 130 schools today, that pales against the challenging backdrop that millions of young people face.
But all organisations with an interest in the enterprise education of children and young people can achieve even more. We need to remember to make enterprise a key part of the curriculum, to start young and keep going, and to assess our progress rigorously and honestly.
Autism and employment: rethinking the challenges
What do you know about autism? Perhaps you’ve heard that it’s some kind of brain condition that is linked to genius. Maybe you have a vague notion that it’s caused by childhood immunisations, or affects children not adults, boys not girls. Maybe you’ve read The Curious Incident of the Dog in the Night-Time and therefore know everything there is to know.
Today is World Autism Awareness Day, so I can’t help but give the topic some attention, especially as the Action and Research Centre here at the RSA is in the early stages of planning a piece of work involving improving opportunities for people with autism.
It feels timely to mention our intention to do this work, not least because of the emphasis in UN Secretary-General Ban Ki-moon’s message to mark World Autism Awareness Day 2013: “This international attention is essential to address stigma, lack of awareness and inadequate support structures. Now is the time to work for a more inclusive society, highlight the talents of affected people and ensure opportunities for them to realize their potential”.
Now is the time to work for a more inclusive society, highlight the talents of affected people and ensure opportunities for them to realize their potential
A few facts, then. Autism is a lifelong developmental disability – on its own, it isn’t a learning disability or mental health condition, although some people with autism might also be affected by these. Autism is characterised by a ‘triad of impairments‘, which refers to difficulties with social communication, social interaction and social imagination. Importantly, it’s a spectrum condition, which means that the way the three types of impairment affect people varies, and rather than being a single fixed condition, it encompasses many different subgroups of experience.
There’s a lot that is still not known about autism – how it is caused, whether ‘cure’ is possible. There’s also a lot of controversy surrounding how these unknowns should be approached, including a growing movement that advocates for celebrating difference instead of looking for a cure. It can all get quite divisive, especially between parents who passionately believe, for example in behavioural modification therapies and those who prefer to find ways of accommodating autistic self-expression.
Until a few years ago, I didn’t know all that much about autism, and I certainly still wouldn’t profess to have much in the way of knowledge about it. But, I do have a bit of experience, as a result of having had the privilege of being an occasional support worker for children and young people with autism.
Through the independent support agency, Time Specialist Support, I’ve got to know a number of young people with autism and, for fear of descending into cliche, have learnt a huge amount as a result. Many of the important lessons haven’t been about the ‘problem of autism’ so much as the problems created by our social world and the norms we work within. Considering these things from the perspective of a child with autism throws up a gamut of frustrating and bewildering challenges, but when you look at it from the point of view of an adult, the impact of being different in an unforgiving society takes on even greater intensity.
when you look at it from the point of view of an adult, the impact of being different in an unforgiving society takes on even greater intensity
Only 15% of adults with autism have a job, although most are able and would like to work. The challenges involved in getting and doing a job are massive, but not necessarily because of the autism itself so much as the structures we take for granted as being integral and neccessary. It’s these challenges, and how employers can help diminish them that we’re interested in finding out more about at the RSA. It’s very early days, but, the Enterprise team and Social Brain Centre intend to collaborate to examine the processes of change that might need to happen in order to properly support adults with autism to work.
We are currently in early discussions with organisations interested in creating more autism-friendly work places, and helping autistic people realise their employment potential, to address the rather shocking unemployment statistics among this group. One of the options we are exploring is to run a challenge prize on this subject, combining a mixture of specialist expertise, entrepreneurial business models, design and technology.
There are a few examples of trailblazers in this area, but there are also plenty of disappointing and tokenistic attempts to employ autistic adults. As we develop our ideas and plans, we would very much welcome anecdotes, examples, comments and suggestions, so do get in touch with me or Julian Thompson.
Support for young entrepreneurs too often ‘old school’ argues new RSA/RBS report
Last week the RSA and RBS jointly launched a new report, Disrupt Inc., which looks at the changing behaviours of young entrepreneurs. Visit our Enterprise page to view the report and find out more.
With the economy stagnating, living standards falling and levels of unemployment stubbornly high in some areas, it is little wonder that building an ‘aspiration nation’ has become one of the central underpinnings of this government’s policy agenda. As David Cameron put it at the 2012 Conservative Party conference, “Aspiration is the engine of progress. Countries rise when they allow their people to rise. In this world where brains matter more, where technologies shape our lives, where no-one is owed a living … the most powerful natural resource we have is our people.”
This ‘exhortation for aspiration’ has been matched by practical steps to help more people start up and run their own business. A significant amount of enterprise support has been directed at young people in particular, around 1 million of whom are still without work. Among other initiatives, the government and its partners have helped to establish the StartUp Britain and Business in You campaigns, the StartUp Loans scheme, the Enterprise Finance Guarantee scheme and the MentorsMe programme. We are also witnessing the growth of many non-state enterprise support initiatives, particularly within universities.
The question is, are these initiatives actually working? At first glance, it seems that perhaps they are. The number of young people in the early stages of planning a venture has increased sharply over the past couple of years. The graph below, put together for an RBS report by the Professors Mark Hart and Jonathan Levie, show that early-stage entrepreneurial activity among young people is at its highest level in more than 10 years. It is now almost equal to the rate among the older generation.
Look more closely, however, and we can see that there are at least 2 key issues still blighting the landscape of young enterprise in the UK. The first is that there remains a large gap between the number of young people who say they wish to start a business and the number who are actually doing so. While 10 per cent say they wish to start their own venture, only 3 per cent are making the leap. The second issue is that many of those who do create a business cease trading not long afterwards. One estimate is that a third of young entrepreneurs drop out within a year of starting up, compared to 1 in 10 of those over 30.
Anyone seeking to stimulate young enterprise in the UK therefore needs to think long and hard about how these kinds of hurdles can be overcome. It is of some concern then that our latest report, Disrupt Inc., reveals that many enterprise support initiatives may not be up to the task. Informed by conversations with dozens of young entrepreneurs, our findings indicate that much of the support today tends to be grounded too heavily in supporting one ‘type’ of young entrepreneur at the expense of other types who follow less conventional, but increasingly popular, routes to start-up.
The level of debate over the availability of start-up finance, for instance, disregards the large proportion of young entrepreneurs who are reluctant to rely on loans, and who would prefer to grow their business slowly but surely on a shoe string budget. Likewise, the deafening noise about the importance of having experienced mentors distracts us from supporting all those young people who prefer informal assistance from peers. More generally, the language and imagery of entrepreneurship used by some in the government and media may inadvertently put it on a pedestal and serve to discourage young people from starting a business.
If we want to help more young people start and run successful businesses then we need to begin recognising the wide variety of entrepreneurial journeys that they take. Without challenging crude stereotypes and reengineering enterprise support to cater for this new reality, we run the risk of wasting the potential of thousands of would-be young entrepreneurs.
Twitter feed of #theRSA- RT @theRSAorg: #thersa Matthew: A responsible society. An enterprising economy. New leadership for new times. http://t.co/skprQaTqCn May 21, 2013 buddhall (Budd Hall)
- RT @theRSAorg: #thersa Matthew: A responsible society. An enterprising economy. New leadership for new times. http://t.co/skprQaTqCn May 21, 2013 Beth_Pen (Beth Pen)
- #thersa Matthew: A responsible society. An enterprising economy. New leadership for new times. http://t.co/skprQaTqCn May 21, 2013 theRSAorg (The RSA)
- RT @Liz_CarnegieUK @theRSAorg #thersa blog Big Idea: Cathedral Innovation Centre Unleashing religious spaces http://t.co/mNabeisgRU #FRSA May 21, 2013 vivslf (Vivs Long-Ferguson)
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Julian Thompson has been a private, public and voluntary sector researcher for over 12 years. Formerly a Director at research agency Ipsos MORI specialising in qualitative and participative research, innovation, futures, and employee engagement methods, Julian leads the Enterprise strand in the ARC team. He is interested in the enrichment of people’s working lives, social enterprise and institutional innovation.
Ben Dellot is a Researcher within the RSA Projects team and works on both the Citizen Power and Enterprise programmes. He is also a researcher to Matthew Taylor.
Anthony is co-ordinating the Independent Review of the Police Federation of England and Wales. He previously led a project on democratic stress, extremism and populism for Policy Network and projects on social attitudes for Demos and Searchlight Educational Trust. As founding Chairman of a University Technical College and Vice-Chairman of a Community College, he also has an interest in educational development and policy.