Young Entrepreneurs

Mark Prisk Excerpts

Wednesday 18th April 2012 Westminster Hall

[The Minister of State, Department for Business, Innovation and Skills (Mr Mark Prisk)]

I congratulate my hon. Friend the Member for North Swindon (Justin Tomlinson). I was not quite as successful as he was in my wheeler-dealer days. At one point, I did corner the market in Curly Wurlys, but I should perhaps cast a veil over that. It was only a couple of years ago—actually, I am teasing.

What is exciting when we engage with young people is that we immediately see their sense of inspiration when they realise they can make money by understanding the people around them, by thinking laterally and by solving problems. Those are really important skills, whether or not they go on to become the next Sir Richard Branson. I really like the market idea that my hon. Friend highlighted. I would like to have a closer look at it with him, because I think it sounds like an exciting initiative that we will want to talk to market traders and others about. The Scouts initiative is great. I was aware that the Scouts were doing that. We should not assume that it is only college and university students who do these things; often, it is the youngest students who recognise that the moment they become their own boss is important.

Before I come to the question of young enterprise, however, let me go to what for me is the heart of the broader debate. Enterprise and entrepreneurship are vital to the economy, but they also have an important social message. “It doesn’t matter what your background is or where you went to school. If you have ability, ambition and the will to work, you can be your own boss and make your own fortune,” is a really powerful message, especially for the next generation. I applaud my hon. Friend’s work because in addition to what the Government are doing, all of us as Members of Parliament have a useful role to play in encouraging young people to see the range of opportunities before them. Even if people go into a salaried career for the first 20 years of their working life, many of them will still have those opportunities in the back of their mind. If they are shown what paths there are when they are young, their chances of progressing down them will be much greater. The number of start-ups in the UK is an encouraging sign: between 2003 and 2010, the number of business start-ups was static, but last year it jumped. I look at those numbers and see an encouraging shift in people’s ambition and aspiration to start their own business.

Alongside conventional economic reforms, we have tried to ensure that people have, as my hon. Friend said, the tools to turn their dream into a reality. We started by reforming all the business information the Government provide, putting it in a usable form and making sure it is where people want it, when they want it. We are looking to develop it in an app-based form, which is especially important for young people. We then looked to establish the principle of mentoring and money through the new enterprise allowance, mirroring what the Prince’s Trust has done in the past. That is important, because it will help unemployed people to become self-employed, creating up to 40,000 new businesses.

The broader question is how to get the advice right. I am absolutely committed to the principle of good business mentoring. That is why we have replaced the 1,600 state- paid business advisers with real business people: we have not even got to the end of the first year of the Mentor Me programme and 15,000 such people are already in place and helping many others to start businesses. We want to increase their number to 26,000 this year and, yes, we aim to get to 40,000, but I want make sure we get the quality right. I have that target in my mind, but I want to make sure that I do not race for 40,000 and get the quality wrong. That is an important issue. Mentoring is absolutely fundamental.

I want to focus on helping young people in particular. I will come to the enterprise loan for young people, but I cannot talk about start-ups and enterprise without briefly mentioning the importance of being able to access finance. That will never be easy following the 2008 crisis, but we have tried to think about it in the round. We are trying to improve debt finance and ease lending, which is what the enterprise finance guarantee and the national loan guarantee scheme are about, but we also need to think about the use of the tax system, and that is what the enterprise investment scheme is about. A key measure is the development of business angels, which to my mind are the logical next step for business mentors. If we nurture the community of mentors, we are more likely to generate more business angels, so alongside the mentoring programme, we are also putting in place the co-investment fund to expand the number of business angels, so that we get an underlying network to help people to start up.

What can we do and what are we doing to help young people to turn a bright idea into a real venture? Enterprise education has real benefits. My hon. Friend mentioned the young enterprise scheme; the evidence that it and other such programmes have produced shows that in almost every case when people engage in enterprise education, the proportion who actually start up a business doubles. However, there is an added benefit: even those who do not immediately go on to start up often demonstrate a greater appreciation of those skills and are better able to fulfil their career potential, so that they may go on to become successful in a salaried career. In other words, such education helps people to reassess what they are capable of and gives them the confidence to think in the round.

We have tried to foster enterprise education across the education system. Hon. Members have all said, “Let’s not just think about universities. Let’s think about schools, colleges and universities.” That is absolutely right, and that is why we are doing work in each of those areas. We want to enable most students, wherever they are in the education system, to learn about the opportunities and practicalities while they are still in learning. In schools we have established Enterprise Village, an online resource that has been up and running for the past few months, which aims to help teachers and students to start a business in the school. The Norwegians are good at that, and have established a principle of running a business in every school. We want to foster and encourage the same here. The importance of role models at local level was rightly mentioned, and alongside the Enterprise Village programme we have established Inspiring the Future, an army of 2,500 business champions or local entrepreneurs who fulfil an ambassadorial role in a formal sense, but, more important, provide inspiration. Those two elements are very important.

We have also thought about those who are struggling on the edge of the school system, and we were delighted to support the Premier League Enterprise Academy, a good programme that uses the draw of premier league clubs to get young people engaged in the process of entrepreneurship. We should not ignore a fact that I discovered by accident a few years ago, which is that many entrepreneurs struggled at school far more than the average student. Routinely, if I were to ask a group of entrepreneurs whether they had dyslexia or significant problems at school, about 40% would put up their hand. Whether that is because entrepreneurs are wired differently, or because the struggle at school made them entrepreneurial, I do not know. I do know that we need to think about that side of people’s learning alongside the conventional academic route.

My hon. Friend the Member for North Swindon took us on a wonderful trek through his educational and entrepreneurial career, and he rightly highlighted his university experience. I am a few years older than he is, and when I was at university the clubs, societies and networks were not oriented towards business—and I was doing a vocational degree. I felt strongly that we needed significantly to expand opportunity during learning, regardless of the subject students were taking—so not going down the exclusive business school route, but saying, “I don’t care whether you are studying land management or classics: you have the opportunity to be part of an entrepreneurial network on campus.” While my party was in opposition, I came across the nascent National Association of College and University Entrepreneurs, which in government we have been able to turn into a formal charitable group. This year we will put more than £1 million into NACUE, to make sure that the number of entrepreneurial clubs goes up from 40 or 50 to 90 during this Parliament. That is important, because they are not just clubs: they are the focal point for setting up competitions and other entrepreneurial opportunities, and for bringing in the other things that universities can do, such as establishing incubators, which has rightly been highlighted. I have seen that for myself at the university of Hertfordshire, where a youngster in his first term started a photography business. He has a space there and is studying, learning and earning. That is a wonderful combination, and, my golly, he is a mature and capable young man.

We want to make sure that alongside such programmes we build other networks, because where entrepreneurship really flourishes is where people group together and then bring in people with the business finance. It may involve academics, who have an invention that they are not sure how to commercialise. That fusion—whether in silicon valley or, indeed, Boston—lets people really make things happen. That is why we have actively been supporting such programmes as StartUp Britain, involving people who are dynamic, engaged, and of the relevant age group. They see universities as a place in which to put their business, although they may be well past the university stage. What I think of as a sort of entrepreneurial ecosystem is bringing finance, invention and the entrepreneur together. That is where we find the best opportunity.

We also wanted with NACUE to think not just about our friends at universities, but about the many people at further education colleges. We should not ignore the fact that if we help young people to gain a trade or craft that is crucial to the economy and to their ability to earn, we need also to ensure they know how to be self-employed in those trades and crafts. That is why, partly at the behest of Doug Richard, who bent my ear on the subject, we have also given NACUE the task of rolling out entrepreneur clubs to about 160 campuses by the end of this Parliament, so that we will be dealing with schools, universities and colleges.

My hon. Friend mentioned finance, which is important. It is especially challenging for young people. When I was a mentor for the Prince’s Trust, I learned that the combination that we often see in the context of micro-loans—money and a little grey hair—is the mix that helps a business to succeed, especially over a two or three-year period. We wanted to get the infrastructure ready on college campuses and so on, and then think about the finance side, and that is why we announced in the Budget a £10 million programme, to which my hon. Friend alluded, to provide enterprise loans to 18 to 24-year-olds. In a sense that mirrors what is available in the market for other entrepreneurs, but it is an exciting concept because it will provide the means to take a nice idea that needs to be tested in the market through to a business plan, and then on to becoming a real business. I can tell the House that we will start the pilot next month, and this morning I had a meeting with many of the private sector partners who want to participate. I am particularly grateful to Lord Young, who has been leading on the matter and advising the Prime Minister and the Government. He has brought real enthusiasm and energy to the work.

On a broader point, my hon. Friend mentioned the need to engage lots of people, and I have always taken the view that the Government’s job is not to try to run all this. If we did try, we would do it badly. We want to create the environment in which a thousand flowers can indeed bloom in the entrepreneurial community. That is the nature of entrepreneurs. Some will fail, and some will not. Some will bloom and go to great heights, and others will nearly disappear but come back next year. That is fine. That is why, to celebrate entrepreneurship, we have taken the concept we inherited of the global entrepreneurship week—it started in this country and now encompasses more than 120 countries—and set the ambition of having an entrepreneurial week every week. I have got together all the different entrepreneurial partners in Young Enterprise and beyond to produce something that is more focused and that builds on the things that Young Enterprise, the Prince’s Trust and many others already do. That is what StartUp Britain is doing, in part, through the year-long calendar it has just launched, which shows people the fantastic array of events taking place in this country. We are the most entrepreneurial country in Europe, but I want us to be the most entrepreneurial country in the world. We have to make sure that we help young people in that process.

I am excited by the ideas that my hon. Friend suggested. In a way they reflect the broader activity that is going on in many of our constituencies. Entrepreneurship is a positive message for young people. Our job is to enable all students, whatever stage they are at in their school or university career, to get access to the right information, advice and networks, so that they can take their bright idea and turn it into a successful business for the future.