About Business Stay-up by Chief Executive, Rob May
ABE's Chief Executive, Rob May, talks about what led to ABE being involved in this campaign.
Over the past decade, governments worldwide have used a range of policy tools to stimulate entrepreneurship as an engine for economic growth. By focusing on increasing business start-up rates in their countries, policymakers aim to shape diverse and competitive markets. There is much to applaud about the positive outcomes that have been achieved from this approach, and the thousands of entrepreneurs who are now empowered to pursue their ambitions and commercialise their talent. Innovation is flowing and dispersing faster than ever before. In the UK alone in 2017 around 70 new businesses were formed every hour.
The Business Stay-up campaign was created to address a less edifying statistic – that as many as 6 in 10 of these small businesses are confronted with early failure. It’s important to point out that many firms are simply outcompeted and a healthy level of creative destruction in the marketplace is vital to sustain a dynamic economy underpinned by innovation, value and consumer experience. But ABE believes that more can and should be done to raise the probability of small firm survival. We believe that for policymakers in the field of entrepreneurship, identifying and incentivising interventions to help businesses survive and thrive should be of the highest priority.
In collaboration with The Entrepreneurs Network, ABE commissioned research to enquire further into the causes of ‘early’ small business failure and our research has found that poor management practices can often destroy what could otherwise be a very successful firm.
Our findings, which were launched in the UK Houses of Parliament, are based on an independent analysis of 10,500 business owners across 21 countries. Our research partner, the London-based Centre for Education Economics investigated the link between the level of education, access to education and small firm survival, and the research finds that while much effort has been given to supporting start-ups, relatively little attention has been paid to factors relating to ‘business stay-up’.
To ensure that the start-up agenda does not end in failure, it is important to devise new policies to help improve entrepreneurial quality – not just quantity.
This research demonstrates the clear benefits if governments incentivise training in impactful management skills for working entrepreneurs. Through various levers such as tax reform to encourage leadership training, more firms can survive, stay-up and grow into flourishing businesses.
This research forms the touchstone for further work that ABE will be leading on, in collaboration with policymakers and education providers in the UK and around the world to develop strategies for encouraging successful, sustainable enterprises.