Tuesday, July 26, 2005

Is the UK's enterprise policy and practice better than the USA's?

I was at an interesting seminar yesterday by someone who is heavily involved in enterprise and entrepreneurship policy and practice in the USA.

Several issues stand out for me that tend to counter some of the mythology around entrepreneurship in the USA amongst other things:

- Enterprise development as a serious strand of economic development and regeneration is relatively recent - especially for State and city governments. Most tended to rely on business attraction and retention.

- There's not many universities any good at spin-outs in the US - he could only think of 2! same in UK I think. Despite its policy promotion, universities are crap at acting entrepreneurially and perhaps should be avoided. I was involved in one initiative in Scotland which aimed to assist technology and innovation start-ups and totally avoided universities as they were detrimental to success!

- The Federal Government is pulling out of economic development - halving the budget to £3 billion and consolidating all programs into one budget to be given to States. The Small Business Administration is being cut back too.

- Interestingly research points to many young people indicating that entrepreneurship is the preferred option over working for someone in the US.
However, enterprise education is hugely under resourced and under developed.

- Many US States are experimenting in enterprise support. Some weaknesses are that funding is short term (one-off programmes), ambitions are very high, and there may be a lack of stability or pragmatism.

- Good work in US on equity funding and Angel networks - seems to be a conducive climate to this, and public sector can help by pulling together angels or assisting SMEs to become investment ready.

- Like many European counterparts - US states are poor at tracking the performance of their business base and interventions

A big impression I got was that the US government at a Federal level is not particularly pro business or pro-enterprise and has no particular agenda or policy. Additionally, the issue of local and state taxation now seems to be a small influence on business location decision.

Overall, the US guy suggested that the way forward is for the public sector to pull out of direct delivery but play more of a role in information, pulling together networks and formalising support or the interface for support, and perhaps incentivising or subsidising private sector advice a bit.

One striking thing was that he thought that US entrepreneurialism is heavily dependent on immigrants, and post 9/11, immigration policy is not doing so well at retaining entrepreneurial people.


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