UK ENTREPRENEURS FARING WELL IN GLOBAL ECONOMIC DOWNTURN

12 Dec 2002 10:45 AM

New statistics show Yorkshire women on top but losing to Essex man

UK entrepreneurs are faring well in the face of global recession, according to a new survey co-funded by the DTI published today.

The Global Entrepreneurship Monitor (GEM) 2002, a worldwide survey of entrepreneurial activity, questioned 20,000 last year in the UK alone - representing the largest single study of entrepreneurial activity in the world.

Key findings show that:

- though entrepreneurial activity is down worldwide, Britain is faring well in the economic downturn - of the G8 countries, only the US and Canada fared better than the UK in reduction of total entrepreneurial activity;

- the gap between male and female entrepreneurship has narrowed in the last year by nearly 40 per cent - but the gap is still wider than the global average with men in the UK twice as likely to set up in business as women;

- job creation by small businesses is strong in the UK - it's estimated that 55 per cent of start-up businesses each create up to 11 jobs; and

- entrepreneurial skills are up - 43 per cent of people feel they have the appropriate skills to start a business compared with 40 per cent last year.

The gender picture varies by region. Women are leading men in entrepreneurial activity in one region, Yorkshire and the Humber. However, in the East of England, levels of entrepreneurship among men are nearly 10 times higher than among women.

Entrepreneurial Men (%) Women (%)
activity

East Midlands 5.6 3.1
East 11.1 1.3
London 7.2 3.9
North East 4.4 1.3
North West 8.3 1.5
Northern Ireland 5.1 1.4
Scotland 5.1 3.5
South East 7.8 2.8
South West 7.1 2.7
Wales 4.6 2.5
West Midlands 6.3 3.3
Yorkshire & Humberside 3.0 4.8
UK 6.7 2.8

Trade and Industry Secretary Patricia Hewitt said:

"Despite the world economic downturn, this survey shows that the UK is still a great place to start and run a business. People are more aware than before of entrepreneurial opportunities and positive about the effect of those opportunities.

"I'm pleased that the gap between male and female start-ups is narrowing, but there is still much more we need to do when men in the UK are twice as likely to set up a business than women. The Government is determined to help encourage even more women to start up in business.

"We need to eliminate the barriers that remain, be it access to finance or to childcare or business networks. If women started new businesses at the same rate as men, we would have more than 100,000 extra new businesses every year."

The research also produced interesting findings on the level of ethnic minority entrepreneurship:

- Asian people are twice as likely to be involved in start-ups than their white counterparts, while Caribbean people are three times as likely and Africans nearly five times as likely to be involved than white people; and

- Caribbean women are the most entrepreneurial of all British females.

Patricia Hewitt added:

"The new data shows that people from ethnic minority communities make a large and important contribution to the entrepreneurial spirit of our country. This finding is particularly welcome. Our role as government must be to ensure that individuals from minority backgrounds who want to start their own business are supported in doing so."

The report also revealed a strong regional dimension to
entrepreneurial activity:

- the South East has the most favourable climate for entrepreneurial activity, employment and job creation for start-up businesses and also has the best profile for job creation in the next five years;

- the East of England has the highest index for entrepreneurship at 6.1 per cent;

- the East Midlands has the highest proportion of business angels, with London a close second;

- the East of England, London and the South East has the highest proportion of independent start-ups;

- the Northwest has the strongest environment for job creation through owner- management businesses; and

- Northern Ireland has the highest proportion of new technology owner- managers at 15.2 per cent of the total.

Patricia Hewitt continued:

"Increasingly support for entrepreneurs needs to be delivered regionally. There are outstanding start-ups and high growth businesses in every region of the UK but still persistent gaps in the business birth rates between regions. By bringing RDAs, Business Link and the Learning and Skills Councils closer together we aim to make every region an enterprise success story."

Notes to editors:

1. The Global Entrepreneurship Monitor started in 1999. Now in its fourth year, the project involves 120 researchers working in 37 countries. Taken together, the 37 countries that form the basis of GEM 2002 account for 92% of world GDP and two-thirds of the global population. GEM therefore constitutes the largest global research project in entrepreneurship currently being undertaken anywhere in the world. The GEM Global report was published on 13 November 2002.

2. Many of the countries taking part in GEM Global also produce their own individual country report. This year GEM UK will be the largest study of entrepreneurship ever undertaken in the UK, with a sample of around 20,000 adults across England, Wales, Scotland and Northern Ireland as well as interviews with national 'experts'. Sponsors include SBS, Barclays, The Work Foundation, Ernst & Young and RDAs. The GEM UK project is managed by Dr Rebecca Harding of London Business School.

3. The initial survey was of 16,000 adults and was conducted during May 2002. In addition, raw data from two identical surveys conducted during 2002 by Barclays was added in to the sample of adults.

4. The key indicator used in the GEM research is the Total Entrepreneurial Activity Index (TEA) which is made up of the total numbers of people involved in nascent (start-up) businesses and in new firms which have been operating for up to 42 months.

5. The full UK GEM report is available at www.gemconsortium.org

6. Case studies - photographs of all the case studies below are available from the DTI press office on 020 7215 5490.

Yorkshire & Humber

Huddersfield-based Natural Wheat Bag Co. Ltd. is run by Sue Wymer, who arrived from New Zealand with two small sons, no job prospects and no money. Whilst abroad, she had used a grain-filled bag, warmed in the microwave, which soothed her aching back following pregnancy. By trial and error she developed her own bag, financing everything herself, whilst working as a receptionist to make ends meet. Her product now is sold in outlets like The Body Shop and John Lewis, and product development has seen the concept of the Hug Me Better Bear which is linked to the NSPCC and for which The Natural Wheat Bag Company makes a donation to charity for each sold.

Contact: Sue Wymer on 01924 840 504.

Yorkshire and Humber/ethnic case study

Sheffield Northern Media graduate Tracey Schawsmidth runs film company Chocdrop Productions, making independent productions. Tracey's first film was shot over a tight 5-day schedule in June with a professional crew of 25 people. 'Killer Sound' is a comedy about a young man known as 'Music Freak' who takes a disastrous step too far in his quest to build the most powerful sound system. The film was screened and distributed by the British Film Council. Tracey is hoping to have more success in the future and is looking for stories and scripts from across the UK. Business Link South Yorkshire helped her with marketing, business planning, and market research. "Thanks to Business Link South Yorkshire, I am well on my way to forging a career out of film-making," says Tracey. "Calling 0800 073 7474 was the best move I made in terms of securing advice and assistance with setting up on my own. Chocdrop Productions will be making culturally diverse and entertaining short films for world-wide distribution."

Contact: Tracey Schawsmidth on 07961 435734.

Eastern England

Business Link Norfolk, together with the Women's Employment and Enterprise Training Unit (WEETU) based in Norwich, are working hard to make a difference to reduce the gap between male and female start-ups. Businesses they've helped include:

Alex Boardman spotted a niche in the building market and, is not only filling it, but sands back, papers and paints and, unlike many of her competitors, clears up afterwards. Alex gave up a career in fine art after a spell of bad health. While recuperating, a friend asked her to fix up and decorate his flat. Several refurbished homes later, Alex joined the WEETU course and accessed a loan for tools, setting herself up officially as 'Mrs Fixit'. Her business scope is household maintenance and repair - specialising in carpentry, glazing, tiling, joinery and painting and decorating. Some of her customers display some curiosity about a woman undertaking what they understand to be male tasks while a few seem to be waiting for a mistake. Regular work from constant word of mouth recommendations testifies that Alex doesn't like to make mistakes. Her customers, who have often left problems for years before seeking her help, do the same and the only haggle she's had over money was when a man visited a day after he'd settled the bill, to offer additional payment.

Julie Bishop runs a domestic and office cleaning service, 'Living Clean', which is unique in the UK, using only environmentally friendly products. An essential part of Julie's kit is the non polluting agent employed to clean seagull droppings from offshore oil rigs - robust stuff given that many consumers still consider green detergents to be ineffectual. Keen to extend the market of green cleaning products available in the UK (she had to order her initial stock from the USA) Julie is currently working with an industrial chemist to develop her own range based on olive, jojoba and citrus oils. The drive to start her business stemmed from the ill health of her family. Her father attributed his cancer to environmental factors and Julie's young son was hospitalised with severe asthma triggered by air pollution. Julie has six staff and two vehicles, servicing 100 clients across Norwich and South Norfolk.

Lindsay Stevenson owns the New Buckenham Bed and Breakfast, providing accommodation for visitors to both Lotus and Snetterton racetrack and also walkers - Lindsay offers pick ups and set downs for ramblers on local long distance footpaths the Angles and Peddars Ways. These initiatives are typical of Lindsay's 'can do' approach. She decided to run the Bed and Breakfast from a former fire ftation pump house, but needed set-up capital. Lindsay undertook WEETU training and accessed a loan for linens, soft furnishings and publicity. Lindsay's 'can-do' attitude stems from a backpacking tour of Africa, India, Thailand and Hong Kong. For funds en route she worked as a caterer for work crews. In Hong Kong 300 labourers wanted Chop Suey noodles so she set up a field kitchen. In South Africa the work gang demanded traditional mealie maize, completely unfamiliar to Lindsay, but she came up with the goods.

Contact: Suzy Carter, Business Link Norfolk on 08457 218 218 for more details on the above East of England case studies.

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