I was at two events last week that got me thinking that we need to radically think again about what we do in London.
On Tuesday the 12th March I was in Liverpool for the Global Entrepreneur Congress where an audience of 3000+ entrepreneurs heard what for me were 2 important facts:
1. That the Northwest Region of England (home to both poster boys of 1980’s deprivation Liverpool and Manchester) now has significant lower unemployment (9.3%) than London (10.2%). The fact that London is now the region with the fastest growing level of unemployment should shame us all.
2. The respected Kauffman institute repeated the research findings that almost all the new jobs created in the USA are created by companies that are less than 5 years old. This amazing fact accounts for the fact that partly through a bi-partizan effort to support entrepreneurs by all USA Federal, State and City governments the USA is now creating jobs at a rate of almost 3 million per year. More and better entrepreneur is what this fantastic presentation points out is a necessary if USA and by direct implication London, is going to create jobs.
Therefore, I was interested to hear what all the 4 major candidates for the Mayor of London had to say on the subject of job creation and entrepreneurship at the Mayoral debate organised by the London Business Board last Thursday evening. The news I am saddened to say was extremely disappointing. Not a single candidate had anything to say about tackling London’s growing unemployment. Not a single candidate said anything practical about how to enable and increase entrepreneurialism in London. Instead we were treated to the usual banter about who could best manage the TFL infrastructure, who best could control the unions, who best could ensure the police do their job of policing the streets and who can best promote London to oversee businesses.
In left me thinking, in a room of 200 so called representatives of London’s business community, if I was the only person in London that thought none of the candidates cared or had a clue on how to tackle London’s economic crisis. The questions I want answers to from the candidates for Mayor of London are:
▪ Do you care about employment in London- if so what are you going to do about it?
▪ Do you know that businesses less than 5 years old create all the net new jobs and if you do what are you promising to do to make London an entrepreneurial city?
▪ Are you ashamed that you have an agency called London Partners whose job is to attract foreign firms to set up and create jobs in London but nothing (no agency, no funding, no direct support) to encourage and enable Londoners to become entrepreneurs? Based on empirical evidence if you cared about job creation where should you put your investment? You guessed it in supporting London’s entrepreneurs, in helping them not overseas firms to de-risk their investments in this city.
▪ Are you aware that City leaders from across the world are passing laws to make it easier to start and scale a business, providing tax breaks to encourage investment, releasing unused public buildings and land and providing grants to set-up incubators for the next generation of entrepreneurs and using tax revenues to fund education and training programmes to encourage and support both young and old to give it a go and become an entrepreneur? I suspect not so if they were interested I recommend they look at the 50+ initiatives that Mayor Bloomberg of New York is pursuing in a co-ordinated programme to make New York’s economy more than Wall Street or better still look at why a country like Israel (with a population a little less than London’s) is a world leader in creating the next generation of entrepreneurs and jobs.
Today we have the release of the Experian/ BBC Local Growth report that finds London is the number 1 region for having employers in sectors (primarily business services) that have the best growth potential but is the worst performing region in England for the % of firm that could potentially export or potentially grow.
The Experian/ BBC report concludes that simply targeting sectors identified as having high growth potential, will not create the level of growth the economy needs. There are champions in every sector and the level of job creation varies in each and it is these “business Champions” that will create the vast majority of new jobs in the economy in future years.
There are several characteristics, which business champions have in common:
- Young, small companies – those less than 10 years old and with less than 50 employees
- Firms with directors showing entrepreneurial appetite and experience in other recent successful business ventures
- Involvement in some form of international activity e.g. exporting
All in all these reports and findings demonstrate that it is not surprising that London is failing to create sufficient jobs for its ever growing, predominately young population. The recent Office for National Statistics report showed that between 2002-2010 we have has a 25% increase in the number of firms in London that employ no one other than the founding directors and that this non-growth, non-employing businesses now make up 78% of all firms operating in the Capital.
So no more complacency- what we need is a Manifesto that will make London yet again the Entrepreneur dynamo for the county.