Unloved, Unwanted And Misunderstood

Ernst & Young report reveals that the UK's leading entrepreneurs feel their contributions to the UK economy are not recognised but remain upbeat about growth prospects for 2002

Despite increasing public profile and Government initiatives, 500 of the UK's leading entrepreneurs who are either Chief Executives or Finance Directors of their own companies are frustrated by the lack of an established entrepreneurial culture in the UK, according to the findings of the 2002 Ernst & Young's Enterpriser Survey performed by MORI.

Lack of recognition

64% of the respondents stated that the contributions of entrepreneurs to the UK economy were not recognised by the public. This lack of appreciation was particularly felt in the South and North of England where over 70% said their contributions to the economy were not noticed.

Low Government priority and lack of Government understanding

76% of respondents felt that entrepreneurs were a low priority or less for the Government, with 23% of replies from the South and 19% of women saying they were no priority at all. Furthermore only 15% of those surveyed thought the Government really understood what entrepreneurs want even fairly well. By contrast 27% of the entrepreneurs (and 38% of women) thought the Government had absolutely no idea about what they wanted.

Government had absolutely no idea about what they wanted

Although the Government's Enterprise Bill is due to be introduced in March 2002, Ernst & Young believe that these figures show a worrying gap between rhetoric and action as far as entrepreneurs are concerned. David Wilkinson, Head of Entrepreneurial Services at Ernst & Young explains, "entrepreneurs are disappointed with the Government for continuing on the one hand to preach the benefits of an enterprise culture in the UK, whilst on the other burdening companies with an endless litany of red tape and excess bureaucracy. It's not surprising they feel misunderstood and under represented."

A wish list for 2002 for UK entrepreneurs

When asked what the government should be doing respondents gave a wide variety of answers. 75% mentioned that cutting red tape would radically improve the entrepreneurial culture in the UK, with 52% commenting that abolishing capital gains tax would also help. David Wilkinson explains, "this supports the view that primarily, entrepreneurs want government to stand back and let them get on with their growing businesses with a minimum of interference". Reform of the Insolvency Act, which is proposed in the forthcoming legislation was also popular, particularly amongst technology companies (41%) and in London (43%).

Dot.com boom and bust stifled a flourishing entrepreneurial culture

Despite the media and public interest only 14% of the respondents to the survey felt that the dot.com boom and bust has had a positive effect on the UK's entrepreneurial culture. Particularly amongst the technology sector (64%) entrepreneurs felt that the upheavals of the last few years had actually had a negative impact on enterprise.

Back to Basics for 2002

Despite the economic uncertainty the UK entrepreneurial community is reasonably upbeat about prospects for 2002. 75% see their workforce increasing over the next 12 months, particularly among companies that are in London (80%), in the technology sector (85%) and those with a turnover of under 1635million (82%).

Companies are concentrating on doing the basics right. When asked which issues represented the greatest challenge for business in 2002, the three most popular choices were increasing market penetration (53%), managing cash flow (32%) and recruiting key personnel (30%). Despite the recent government initiatives only 2% of the respondents selected e-commerce as one of their business challenges for 2002 and less than 1% the Euro.

David Wilkinson explains, "Despite the fact that entrepreneurs are feeling the uncertainty in the economy there is a lot of optimism out there. There is still more money out there for early stage companies in the UK than at any time in the past. The best companies will always survive by doing what they always done - doing the simple things well. In an uncertain marketplace we need to think more creatively about a business environment that encourages the flair and innovation that lies at the heart of the entrepreneurial business proposition. Ernst & Young's Entrepreneur Of The Year programme aims to do just that."

Technical details

• MORI conducted a survey on behalf of Ernst & Young into the thoughts of leading UK entrepreneurs on a range of issues. These issues ranged from future funding arrangements to what in their view makes a successful entrepreneur
• A total of 479 postal self-complete questionnaires were completed with this audience
• The fieldwork was conducted 5-26 November 2001