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3,000 new business plans were drawn up in 2021 alone through the programme. Have we finally become the entrepreneurial society that economic strategies so desperately desire? Probably not, unfortunately. Creating a business plan (which is what the Go For It programme measures), is obviously not the same thing as starting a business or moving into self-employment, and the statistics on those indicators tell a very different story.
The number of people recorded as self-employed here has fallen dramatically, which is hardly surprising when we recall the gaps in government support during the pandemic that saw many self-employed people excluded. The National Audit Office estimates that 2.9 million were excluded from meaningful Covid-19 pandemic supports during the early stages of the pandemic supports. Some of the outworking of that is there are now 793,000 fewer self-employed people in the UK than there were at the start of the pandemic. In Northern Ireland there are approximately 35,000 fewer self-employed people now than in March 2020, leaving 101,000. Another key statistic in our entrepreneurship story is the business birth rate. This data tells a slightly different story. There were 130 fewer business births in 2020 than in 2019, a 4% decline. Encouragingly, data to the end of 2021 shows a strong recovery. 7,580 businesses started in 2021, 1,100 more than in 2020 and higher than in each of the last five years.
There is a lot to ponder in the large reduction in self-employment and in the sharp increase in business births. Is this part of the ‘Great resignation’? The ‘Great resignation’ movement is short hand for how the pandemic has jolted many people into considering their work-life balance and making changes. Perhaps more accurately described as the ‘Great reshuffle’, people are tending more towards hopping from one job to another in pursuit of a better balance or contentment. This appears to involve a cohort of people who are building what was a hobby into a business opportunity. A quick check on the ‘Go For It’ website has no shortage of start-up stories where the pandemic, or being furloughed, provided the time and space or opportunity for an idea to spark.
With entrepreneurship being such an important policy aim for government, and as the economy, hopefully, fully emerges from the pandemic, it is important to consider the merits of business support in Northern Ireland. I’m a little late to it, but a conversation last week drew my attention to the FSB and Ulster University Business School’s ‘Back to the Start-up’ report from March last year. The report points out that for the last 30 years or more, the rationale behind most enterprise policy has been to ease barriers for people that want to start a business. Cost barriers are eased through fiscal and taxation measures and various other supports are aimed at de-risking the start-up process through business plan development support and competitively priced space in the network of enterprise parks.
The Back to the Start-up report concludes that the available evidence suggests these policies have not worked - not least, because they appear to have had no meaningful effect over time on our business start-up rate compared to the UK average. However, evidence suggests that policies and methodologies designed and implemented over the past decades to increase the rate of business start-ups, relative to the UK, have been consistently less successful than planned. The aspiration to make NI ‘the best region in which to start, and grow, a business’ missed an important point. Too few people actually want to do it.
At the heart of the matter seems to be the role of societal/family influence about becoming an entrepreneur. Perhaps we are too hard wired to think our path is to finish education and get a job. I’ve noticed this at home when going through post-GCSE options with my eldest. I can’t think of one conversation or piece of material we’ve read where entrepreneurship has been mentioned. Perhaps that explains why we are consistently below the UK average in the Global Entrepreneurship Monitor when it tests if we know anyone who has started a business in the last two years or if we perceive there to be good opportunities to start a business in the next 6 months. If we really want to shift the dial on entrepreneurship, the evidence suggests that we can’t keep doing what we’ve always done. The need for a different approach seems clear, one that champions and celebrates the entrepreneurs we have, one that convinces more people that self-employment and starting your own business is a good path. Covid-19 has had a significant impact on the self-employed, reinforcing ideas that self-employment is riskier than employment. The need to create an environment that kindles an entrepreneurial spirit is greater than ever.