Land of Hope and Technology February 2016 | Page 13

ISSUE 1

Why we may mess it up
THE GREAT BARRIER GRIEF
The UK has many strengths, but it is more
than capable of turning those strengths into
weaknesses, of snatching defeat from the
jaws of victory.
Take as an example attitudes towards failure
To borrow words from a report published by
the European Flash Barometer Index, the
UK population has a level of ‘fear of failure’
that was almost double that in the US and
Canada.
It turned out that no less than 43 per cent
of Brits felt a business should not be set
up if there was a chance it may fail.
The same survey put that number at a mere
19 per cent for the US. In fairness, it should
be pointed out that the ratio was typically
even higher throughout much of Europe,
even so that was a pretty damning finding.
The thing about risk is that it carries a
downside. It wouldn’t be risk, now would it,
if nothing could go wrong? The business
that can never fail is a business that has
incredibly low expectations, an economy that
is allergic to risk is an economy without hope,
without any dynamism at all.
negative attitudes in the UK towards
failure discourage entrepreneurship
Take findings from PwC. In a survey carried
out earlier this decade, it found that 61
per cent of those questioned thought “that
negative attitudes in the UK towards failure
discourage entrepreneurship.” It cited an
entrepreneur as saying “In the UK, a failure is
a failure. In the US, a failure is someone who
has tried.”
It may be worth correcting a myth at this
point. In Silicon Valley, business leaders,
investors and entrepreneurs do not love
failure. No one loves failure. But there is
an acceptance that it is inevitable. Maybe
one could say an entrepreneur who has
never failed is one who has been lucky. An
entrepreneur who has failed was perhaps
made wiser and more humble by the
experience. It is not that in Silicon Valley
people love a failed entrepreneur, but they
do have more respect for such an individual,
whereas in the UK, such an individual must
battle prejudice and a tendency for people
to associate failure with loss of credibility. In
the UK, many have a problem appreciating
that business success is impossible to
predict, – if it was possible all investors would

make a fortune – that randomness plays a
role. Maybe, in the UK, the public love to
see the mighty fail, and gain schadenfreude
from seeing an entrepreneur’s dreams turn to
nightmares.
In the UK, there is also an abiding sense of
defeatism. It seems to be something in the
national characteristic to knock ourselves.
You only need to read the comments
relating to the articles referred to in the list
of references to this chapter to see this. If
a journalist dares talk up the prospects of
UK plc, suggest that we are become more
entrepreneurial, then they are met with a
chorus of derision. If more baby boomers
are turning to entrepreneurism, we are told
it is because the country is in such as poor
state that they are desperate. Millennial
entrepreneurs are naive, and there is nothing
good that comes out of Britain turning to the
world of start-ups, or so we are told.
Coupled with all that is the UK’s ability to
do its level best to lose its advantages.
This sometimes beggars belief. Take as
an example the UK’s time zone. It may

be defined by the position of the sun, but
many think it needs changing anyway. For
example, take the Daylight Saving Bill
2010/11, a private members bill which wants
to see a cross party analysis of the benefits
of moving the UK time one hour forward to
GMT+1 in winter and GMT+2 in summer.
Let’s hope those concerned wake up and see
how in making such a move the UK would in
a display of abject stupidity rob itself of a key
advantage.
Then there is the issue of raising money.
If you are a budding entrepreneur, with
nothing but a good idea, and bundles of
enthusiasm, raising money has traditionally
been incredibly difficult. This is well known.
And even admitted by the banks themselves.
Take as an example these words written
in May 2015: “Lending [for UK technology
businesses] has not been widely available
to UK businesses, whereas their US
counterparts have been able to grow rapidly
though access to debt finance.” So who
uttered those words? Were they written by
a disgruntled entrepreneur, exasperated
by failed attempts to raise money? No,
they were written by Barclays Bank. Even
banks admit that UK banking has not been
providing the services that entrepreneurs
need. Although, in fairness to Barclays, it has
now joined a growing cohort of institutions
that are trying to change that, in the case
of Barclays, via a £100 million fund set-up
for the purpose of lending to growing UK
technology firms.
Maybe the change that has seen the
likes of Barclays become a signed up
member of the entrepreneurs’ fan club,
a kind entrepreneurs’r’us, has been led
by the internet and social media. All of a
sudden we are seeing the emergence of
alternative forms of finance, including peer
to peer lending and crowd sourced funding.
Both have been made possible by new
technologies, in particular the internet, and
they are revolutionising things. For hardstrapped entrepreneurs trying to get their
new projects off the ground, times they are a
changing.

But our ability to take this wonderful
opportunity and consign it to the graveyard
has not been quelled. The UK’s financial
regulator, the FCA, has said it wants to limit
investor’s crowd sourced funding and peer
to peer lending. Unless investors can show
they are ‘sophisticated’ the FCA wants to limit
their investments into crowd sourced funding
and peer to peer projects to less than 10 per
cent of their portfolio net of property assets.
As I wrote in March 2015 “The FCA has just
inserted a massive layer of bureaucracy in
the process of crowd sourced fundi