The last couple of weeks has seen a spat of media reports bemoaning the lack of support for UK entrepreneurs. But are such criticisms really valid?
The BBC has been running a series looking at Tech Britain, its conclusion: we are lousy at funding.
It zoomed in on six tech entrepreneurs who chose to leave the UK and migrate to Silicon Valley. It lamented the lack of long-term thinking in the UK, interviewed one entrepreneur who said that in the US if you were presenting to investors you got laughed off the stage if you had no plan for international expansion, but in the UK you got laughed off the stage if you did.
Meanwhile, the UK’s leading investor, Neil Woodford, made much the same argument. Discussing the problems faced by start-ups he said: “We have been appallingly bad at giving those minnows the long-term capital they need.”
Neither Mr Woodford nor the gist of the BBC thread of recent weeks is wrong. But neither is it the full story.
The truth is: the UK is much better than it used to be, and it is improving. Yes, more money is invested into start-ups in the US than in the UK, and by a long way, but then the US economy is bigger than the UK economy, and by a long way.
Okay, as a proportion of GDP, US investment into start-ups is higher than in the UK. But the gap has been closing. In recent years, the penny has dropped, and there has been a concerted effort to do something about it.
Back in 2012, the UK was ranked as the 12th most entrepreneurial country in the world, by 2015, it was in fourth place. It has slipped a few points since then, but it has been overtaken by small economies, such as Sweden, Iceland and Denmark, within the G7, only the US is considered to be more entrepreneurial.
Perhaps charged by the exceptionally good tax breaks available to investors into start-ups, the UK has seen an explosion in the support network and funding options for entrepreneurs – from accelerators, incubators and an extraordinary increase in the number of co-working spaces.
According to a report from Telefonica, there are roughly a similar number of accelerators per capita in Europe as there are in the US, but within Europe, the UK has by far the highest number.
At the launch of London technology week 2015, Wikipedia co-founder Jimmy Wales said: “I meet people around London and they ask ‘when do you go back to San Francisco?’ assuming I’m here for a few days, but I live in London.
“There’s always this bit of British self-deprecation about ‘oh well, things are so great in Silicon Valley’. But I can tell you, things aren’t that great in Silicon Valley. London has all these incredible advantages of a tech scene, but it’s also a place people want to live. Nobody wants to live in Silicon Valley – it’s dreadful out there.
"London is this incredible cultural city, it’s at the crossroads of the world. In the US you have San Francisco for tech, Los Angeles for movies and Washington for politics. In London you have all these things. It’s a great place to do business.”
So sure, the UK has got problems, but they are slowly being fixed.
There is one snag. The most entrepreneurial people in the world are surely immigrants, the very act of emigrating does in itself demonstrate an entrepreneurial instinct – at least it often does. Immigrants have pumped entrepreneurial blood into the UK’s circulatory system, they have injected risk taking and an attitude to failure which is more conducive to entrepreneurial spirit. In these post-Brexit times, if we turn our backs on immigration, or in any way suggest that entrepreneurial immigrants are not wanted, then the entrepreneurial fire that has been lit in the UK may go out.
And that is a bigger threat to the UK’s start-up or indeed scale-up scene, than the continued availability of finance.
