So in this article I will be condensing the manifesto into digestible chunks for your light reading needs! The article is written by “The Entrepreneurs Network” with the aid of COADEC (Coalition for a digital economy).
Although there’s an aura of depression/uncertainty in markets and politics at the moment the statistics are promising for entrepreneurs.
- Since 2010 there’s been an increase of a third in entrepreneurs engaging in early startup activity compared to the long-run prior.
- There has been a 35% rise in high-growth businesses within the last four years.
- Investment for UK scaleup digital firms has grown by 61% (2017-2018)
The general premise for what barriers exist is: Attaining and retaining quality talent internationally, an market with incentives to support startups as they grow, with more readily available capital sources, and lastly, a more streamline set of rules and regulations to allow entrepreneurs to spend time growing, rather than becoming tangled in a network of unnecessary complexities.
Talent & Skills
Reworking and improving the variety of VISAs that are available for bringing talent into the country to help grow our business. One point is to encourage more females to build companies and be introduced into the market.
- Reintroduce a VISA similar to that of a Tier 1 General (Highly skilled foreign talent can come into the country to build a business or to work within one.).
- Reduce the salary threshold for Tier 2 VISA. This means companies with less capital for wages can still employ quality skill from abroad.
- Extension of countries eligible for Tier 5 Youth Mobility VISA or at least extending this to the EU allowing young talent to enter the market and assist our companies in growth.
- The modernisation of EMI (Enterprises management incentives) to increase the limits and offerings to a greater number of employees. EMI for those of you who don’t know is a scheme that allows (currently) 250 employees to have free share options in the company. They benefit from any rise in the share price whilst not being financially exposed with benefits from tax relief to sweeten the deal.
Access to finance
Barriers to accessing finance can often be the finishing blow to a startup in its infant stages. This prevents it maturing and becoming scale-able and beneficial to our economy.
- Tweak Tier 1 Investor VISA to reduce minimal investment which currently stands at combined total of £2M for each applicant.
- Rework advance assurance for EIS & SEIS (Enterprise Investment Scheme & Seed Enterprise Investment Scheme). If a company meets the regulations & criteria for such a scheme, then they can benefit from easier access to capital funds raised from third parties. The way it attracts these investors is by providing a tax relief to improve the lucrativeness of them investing in a highly risky investment (A startup).
- Improving the level of pension funds being utilised by adjusting the charge on these products.
- Devising a regional startup strategy to improve the development, growth and sustainability of these companies to lead to a positive impact on our economy.
- A few more points: Encourage the British Bank to provide more risk capital, easier access to Innovate UK Grants, reform R&D tax credits for a digital economy (Tax relief correlated with R&D expenditure).
Regulation is certainly a complex issue. At one point increased regulations are required but often it degenerates into a needlessly complex system. This then goes to have a detrimental affect as entrepreneurs are less likely to enter a market that has such high resistance to entry.
- Promote innovation in regulated markets by providing a sandbox regulation system across sectors.
- Reform the use of open-banking systems to improve innovation in telecoms & energy. In essence open-banking systems allow freer access to institutional data.
- Implement the Age Appropriate Design Code in a pragmatic way to safeguard people of various ages from inappropriate variables that may be dangerous.
- Additional points: Revolutionise how the Government collects, stores and shares data and gain a Data Adequacy Agreement from the EU. Protect encryption from politicised attacks. Work with startups to ensure that regulation of the technological industry does not create detrimental barriers to entry.
I have to admit this goes into a great deal of detail. In fact I had to google a variety of these terms to ensure I understood them. Hopefully this doesn’t reflect my own capabilities!
There is quite a volume of proposed changes and tweaks but what do you expect with such a complex system that is our economy that has many external factors too. My fan favourite tweak is “Promote innovation in regulated markets by providing a sandbox regulation system”
The reasoning behind this is I personally feel that with such regulations and the increasing complexities it is too easy to demotivate entrepreneurs. Baring in mind these may be individuals that have a revolutionary idea but hasn’t realised their potential to become unstoppable in their pursuit.
This undoubtedly leads to them giving up in this circumstance and feeling unfulfilled and no further in their pursuit. It’s important to provide incentives not just by providing grants or support but rather making the level of entry easier. I shall be writing three more articles delving deeper into the three key categories for changes
What are your thoughts on this, what is your favourite suggestion?