This article concerns the state of entrepreneurship in Wales. My aim is to raise debate . But first, I am going to go off on a tangent. Please bare with me.
Matthew Winkler, the former Editor-in-Chief of Bloomberg News*, gave me two pieces of advice recently about writing a story. The first is that there is no bigger story than money. We will return to this idea later. The second piece of advice was that a story must always come from some sort of data. It needs to have some sort of empirical root.
It is data which has lead me to write this article. That is, two statistics that caught my eye, relating to the state of entrepreneurship in Wales.
The data comes from the Global Entrepreneurship Monitor (GEM). The Wales specific figures are illustrated in the graphs below and are comparative to the UK as a whole. Two key stats caught my eye:
1) Early-stage entrepreneurship (TEA) in Wales fell significantly from 7% in 2012 to 5.4% in 2013.
2) Entrepreneurial intention has fallen from 8.8% in 2012 to 3.9% in 2013.
So that’s the story. Worrying figures, which on first glance show entrepreneurship in Wales is in decline. This is at the same time as the country continues to grow and development economically.
The Big Surprise:
The number of people who see good opportunities in Wales to start a business is up from 22.6% to 28.1%. This is below the UK average of 36%, but it is a significant increase. People believe they would be able to start a business. So why don’t they? Job creation in Wales is one answer…
Challenges and Choices of the Entrepreneur:
Digital evolution has simplified many of the processes associated with launching and keeping a business.
According to Neil Cocker, a serial entrepreneur and a founder of Cardiff Start, it’s now a lot easier to get started. He recalls in the past “poring over loads of bits of paperwork associated with the legal elements of incorporation, and something known as ‘Memorandum and Articles of Association.’”
Neil has since set up a number of companies and believes “it’s getting easier all the time”. Looking to the future he sites The Government Digital Services team who “have expressed an intention to make it possible to incorporate a Limited Company within just a few clicks.” He notes the last business he incorporated “took less than 15 minutes, and this included registering the domain.” So the process now seems more straight forward? Right?
Business Wales is all about simplification too (let’s get digital, digital):
What about the running of a business? Ease of commercial transaction is always evolving and improving. We posted yesterday about Bitcoin. Could Bitcoin be the perfect currency for micropayments which would otherwise be uneconomical or impossible to send via traditional methods because of high charges?
James Hewson at Bitcoin Checker cites there being “zero set-up costs and if nobody sends you anything, you’ve lost nothing. But on the upside you open up another way of paying for your customers” and that opens up the reach of your business.
Access to different markets through digital media is also growing rapidly as Wales undergoes a digital revolution.
According to Ofcom’s Communications Market Report, tablet use, for example, is up 24% in Wales and in the last week two fifths of all shoppers bought goods or services online. 54% of people polled visited some form of social media platform each week, while 51% bank online. It is certainly the new market place.
Let’s think about what this means for the entrepreneur. Knowledge and expertise on how to use social (digital) media becomes extremely important. According to Carl Morris, a partner at Cardiff-based social-media agency NativeHQ:
“The use [of social media] is growing and it is good, effective and strategic use that will differentiate one organisation from another, but it is certainly not enough to say ‘hey!’ our organisation is on Twitter or YouTube or any different platform.”
For Carl, the key thing is identifying and engaging in clear practices linked to your business.
He outlines four stages that can help you to do this — The ‘Four Ps’.
Matt Phillips, a partner at Knight Frank in Cardiff, explained to me recently that one barrier new businesses are facing is a commercial landlord wanting assurance that they can pay the outgoings. Therefore a rental deposit may be required.
Indycube, launched by Mark Hooper five years ago, offers a way round this problem for small start-ups. They can provide a modern workspace across South Wales that also acts as a platform for small businesses to cross-pollinate and connect. They currently have 600 spaces available for anyone from a one man band to a three or four person business. It’s not necessarily a long-term solution but its a fantastic platform to get set up with.
There is no bigger story than money?
Let’s recall Mr Winkler’s advice. Is there no bigger story than money? In the context of entrepreneurship in Wales, I would have to disagree. Often the story behind entrepreneurship isn’t driven by profits or margins. It’s driven by the goal of being a‘responsible business’ and being genuinely entrepreneurial, by a passion for a product or service.
Below is an interview with Catherine Cains. Listen to her reasons for starting her business and make up your own mind. All I would say is that there is often a stronger driver than money. Is Catherine a good example of entrepreneurial spirit in Wales?
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Of course, a business operates to be profitable. It is legally required to do so. But as Rosie Sweetman, Director of Business in the Community Wales, explains, if a business cannot see beyond profit as a driver, then it’s sustainability comes in to question.
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The Age of Entrepreneurship:
The last question — Is there a lack of entrepreneurial mindset or culture in Wales? Is there a lack of skill base and education, on how to start businesses, at degree level? Is there a right age to start your own business? Perhaps not.
Cardiff University’s Enterprise Unit is starting to address this cultural deficit.
How old should you be before you start a new business?
So we have started the debate. We invite you to carry it on.