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entrepreneurial spirit is currently booming in Britain.
According to a study by the London Business School, one in
every 30 adults is trying to start a business, a higher figure
than any other European country.
Information technology is
the most obvious area of rapid industrial development, but
other sectors have also flourished in recent times, a good
example being food and drink where a plethora of new
businesses - such as sushi bars, juice bars and coffee houses
- are opening on High Streets across the country.
However, Britain is still
some way behind North America, where one person in every 15 is
attempting to set up business. Studies have suggested
that there is a direct link between a country's rate of new
business start-ups and its economic growth and, in an effort
to capitalise on this, the Government has introduced a range
of measures designed to encourage an "enterprise
culture".
Government
Funding
One such measure is
the introduction of a $50 million
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aimed at providing venture capital for small, high-risk
companies. The money will be spread among regional
development agencies and it is hoped that the public finance
will encourage private firms and individuals to invest in more
start-up companies than is currently the case.
The Government also plans to
encourage innovation in business. £200 million of
National Lottery money has been set aside to help inventors
turn their ideas into squanders some £160 million per year in
potential profits by failing to exploit its inventions, but
the Government hopes that by distributing an annual £10
million of the fund to promising inventors much of this waste
will be prevented.
Pension
Funds
In another measure
designed to help entrepreneurs, the Government has urged
pension funds to increase their investment in start-up
companies. Only 1% of British pension fund assets are
currently invested in venture capital, compared to a figure of
5% in the USA. Leading pension
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have already given their support to the Government's call for
wider investment in new businesses, which they claim will
benefit both the economy and returns for pensioners.
Bankruptcy Laws
The Government is
also considering proposals for changes to bankruptcy
laws. In a radical new system, the law would distinguish
between "culpable" bankrupts - those who
deliberately set out to deceive - and responsible risk takers
who have invested in their own companies, only to fail due to
reasons beyond their control. Those in the latter
category would be allowed to retain up to £20,000 to aid them
in their new life, perhaps to put down a deposit on a new
home. The proposals aim to encourage enterprise and
risk-taking.
Clearly, Britain is
increasingly becoming a fertile environment for entrepreneurs
and innovation in business. If you are considering
starting a new company or if you wish to assess the health of
your business in the face of increased competitiveness, please
do not hesitate to contact us for advice.
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