City AM | October 2024
A new report indicates that many aspiring entrepreneurs in the UK feel doomed to fail even before starting their businesses. The courage to leave a secure job for entrepreneurship is often overshadowed by a heightened fear of failure, which is 20% higher in the UK than the global average. Over the past two decades, the share of people citing fear as a barrier to starting a business has increased by 60%, revealing a growing reluctance to take risks.
Cultural factors play a significant role in this fear, contrasting sharply with the US, where the “American dream” encourages entrepreneurial aspirations. Only five UK universities rank among the top 100 for producing successful entrepreneurs, compared to ten in California. Concerns about reputational damage also deter potential business owners. Additionally, the economic climate, impacted by the aftermath of the Covid pandemic and geopolitical tensions, contributes to this uncertainty.
The upcoming Budget threatens to further suppress the entrepreneurial spirit, particularly with the anticipated removal of Business Assets Disposal Relief (BADR). High interest rates and limited access to financing force aspiring entrepreneurs to rely more on personal funds, amplifying their fears of financial loss. Despite political pledges to support small businesses, historical government actions have often fallen short, as seen during the pandemic when many self-employed individuals received no support due to administrative failures. To cultivate a robust entrepreneurial culture, the government must implement concrete measures to empower entrepreneurs and establish Britain as a global hub for innovation and business growth.
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