Julie Devonshire OBE, director of the Entrepreneurship Institute at King’s College London, explores what is preventing the UK from producing globally-recognised tech entrepreneurs such as Mark Zuckerberg.
All nations want to produce a Zuckerberg of their very own but so few have. America seems especially good at it and has gained materially from big entrepreneurial successes. Britain could gain too so why can’t we produce a Zuckerberg?
Firstly, Britain can, and has previously. Richard Branson is at least one such example. Perhaps Branson’s wealth is not quite in the same super-league as the founders of Apple, Google, Amazon, Facebook and Microsoft – but the extent of his entrepreneurial achievements, and the notoriety of his endeavour is equally as famous.
What this highlights, however, is how remarkably rare entrepreneurial success at this global level is. The term sometimes used to describe these industry titans is “Lions”.
What’s holding us back?
So why in recent history has Britain produced few ‘Entrepreneurial Lions’ and America produced several? Is it simply a mathematical correlation proportionate to relative populations? That probably provides some of the answer, but there are many other factors that are holding back UK entrepreneurs from realising their fullest potential. It could be argued that the economic context in the UK now systematically disincentives them from doing so. It’s a commonly held belief that British entrepreneurs exit earlier than their international counterparts, possibly too early, with economic, social and fiscal reasons often sited.
One of America’s incredible strengths is its enthusiasm and celebration of people who succeed in business. No one is immune to the positive motivation that this acknowledgement generates. Perhaps this supports entrepreneurial longevity. Perhaps Brits are too ready to ‘dis’ success where Americans simply applaud.
America is not the only nation to hold big ambitions. Much closer to home observations have been made that entrepreneurs in Ireland are engineered from the outset to think about how best to target a global audience. This may be due to the constrained size of the domestic Irish market. Irish entrepreneurs pursue a globalised market with aggression and tenacity whilst official data shows that 49% of UK small businesses don’t yet even have a website, which is the first step to being found beyond their immediate locality.
Commercial success at the Facebook level is extraordinarily difficult to achieve. One thing that unites companies like Facebook and Amazon is the enduring influence of their founders. The pre-requisite of this influence is that the founders stay the course of the journey together with the company that they founded.
What makes the duration of active founder participation so challenging to sustain here in the UK? Why do so many British entrepreneurs when presented with an alternative, almost all opt to exit? Are the quantity and severity of challenges that our entrepreneurs face on their journey greater than those faced by other entrepreneurs around the world? Wouldn’t it be economically advantageous for Britain to do something about this?
Taxation of entrepreneurial success, in Britain, is unfathomably complicated, demanding expensive expert guidance. Taxation actively motivates premature exit not sustained scaleup. Government procurement is oblivious to maximising accreditation and the realisation of scaleup potential. Growth investment, especially private equity, is engineered to encourage exiting. Regulation is often a cause of industry speculation, doubt and destabilisation. Political uncertainty, both here at home and also internationally (eg Brexit) further undermines confidence.
In the UK, it is inevitable that successful founders will be presented with an opportunity to exit at some point along their journey. Good entrepreneurs commonly know that past performance is not necessarily a reliable indicator of future success. Given all the uncertainty in which they operate, who can blame them for not wanting to cash-in their success and thereby securitise their personal good fortune. And enjoy a bit of free time, or the possibility of starting afresh with another new venture.
All of which are anecdotal observations gleaned from the UK entrepreneurial ecosystem. There’s long been a debate whether entrepreneurialism is nature or nurture. At King’s we are planning to undertake research in the area of neuroscience to truly understand for the first time what is going on inside the brains of successful entrepreneurs. Perhaps this will shine some much-needed scientific light on the important opportunity of how best to create more Zuckerbergs for Britain, and for the world.