“Whilst the US is globally tops in entrepreneurialism, the UK is the only European nation which approaches the US in this respect. In particular, tech-related and export-related entrepreneurialism is significantly higher in the UK than in Continental Europe;” Professor George Feiger told a business audience at the Annual Economic Breakfast of Equistone Partners Europe, the mid-market pan-European private equity investor, held in Birmingham.
However, Professor Feiger, a former lecturer of Economics at Harvard and chief executive of a $3.4 bn wealth management company, said that by US standards, business aspirations in the UK were “still too low”.
“Success is seen in very modest terms in comparison with those I have experienced in California. The continuing negative representation of business and business leaders is alienating young entrepreneurs, Young entrepreneurs do not wish to be in a society that seems not to value their aspirations. They want to succeed and they want to build big businesses. They don’t want to be in a society that seems not to value these aspirations;” he said.
Professor Feiger said that Birmingham and the West Midlands should build on its strengths as the UK's manufacturing capital recognising its traditional skills whilst also developing its information technology sectors.
"Manufacturing – designing, developing and producing new products – requires real and significant investment and that is not as readily available as the lower sums that are needed for software and hardware applications. We need to provide not only the funding but also the facilities to enable new product development," he said.
“Funding for emerging businesses is still far harder to get than in, for example, San Francisco – as is effective mentoring of people with good ideas;” Professor Feiger told the meeting.
“In short, home sweet home isn’t so bad but we really need to find ways to boost support for entrepreneurial activity.”
Equistone’s Economic Breakfast was attended by some 50 representatives of the West Midlands’ professional and financial community who also heard Professor Feiger predict that Europe’s banking sector would in the future play a smaller role in providing credit to business.
“Increasingly heavy-handed regulation by the banking sector drives transactions into the non-banking sector and into offshore jurisdictions. The banking sector provides less than 40 per cent of credit in the US economy. The percentage in Europe is falling fast and will surely approach that level within a few years. Meanwhile, there is no prospect of any global regulatory environment – so we have more and more regulation of less and less.
“We do know that debt is the great amplifier of all macroeconomic swings, which presents a number of current quandaries. For example, we know that ‘austerity’ has not worked well in the Eurozone. Will turning back on the credit taps for already indebted governments make things better or worse?” Professor Feiger asked.
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