Lord Young report urges focus on micro businesses

Growing micro businesses is crucial to economic growth and UK prosperity.

Today we saw the publication of Lord Young’s second report for the Prime Minister, this time focusing on small firms, Growing your business: a report on growing micro businesses (Lord Young, May 2013).

We should take heart that record numbers of people are starting their own business, technology is clearly helping to reduce barriers to start-ups and perhaps more importantly the psychological barrier many faced previously is being overcome.

Yet of the 4.8million firms in the UK three-quarters are sole traders without employees. The support which government can provide, and the conditions which can be set to help just some of these firms take on their first employees will be crucial to help tackle unemployment and help to deliver growth.

Lord Young is right to highlight the role that mentoring, business schools, start-up loans and better publicity for existing initiatives can all have in helping micro businesses to grow. The recommendation to remove the age cap to access start-up loans (currently 18-24) may provide an opportunity to plenty of individuals to begin and grow their firm.

The report also touches on the importance of entrepreneurship, and argues that if the United Kingdom were as entrepreneurial as the United State we would have nearly a million more firms.

What role can be played by universities?

Of course entrepreneurship is notoriously difficult to measure, and for very good reason. It is as much about culture, spirit and mentality as it is about the financial and regulatory conditions that allow a small business to thrive. It’s been well documented that many more graduates leaving US universities head off to set up their own firms, compared to more conservative minded UK graduates.

Our universities can certainly play an important role in giving students access to individuals leading businesses from successful start-ups through to large multi-nationals, as well as recognising entrepreneurship as a legitimate graduate career.