Britain's entrepreneurial spirit at new high but fear of failure on the rise

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More people have started or are looking to start a business than at any time in the last 10 years but those put off from going it alone due to fear of failure is also rising, new research reveals.

According to 2011 statistics from the latest Global Entrepreneurship Monitor (GEM), a highly respected annual study which surveys 10,000 people in the UK, over 20% of the working age population either expected to start a business in the next three years, were actively trying to start a business, or were running their own business.

This is the highest figure since the GEM project began in 1999.

Professor Jonathan Levie from Strathclyde Business School, who helped conduct the study, said: "After the recovery in people's entrepreneurial attitudes in 2010, we have seen a real increase in intentions and start-up attempts in 2011.

"While necessity-driven start-up attempts increased significantly, they comprised less than 15% of all start-up attempts in 2011. Even in a continued recession, most entrepreneurs in the UK start up because they spot an opportunity."

But while the figures suggest that the number of new businesses to be set up in the near future is set to increase, many wannabe entrepreneurs may not actually put their plans into action.

The study found that among those who agreed that the UK offers good startup opportunities, 41.4% said fear of failure would prevent them making the leap into entrepreneurship, up from 36% in 2010.

Women were more fearful than men with 44% saying failure put them off compared to 38.7% of males.

The increase in business start-up intention and attempts took place against a backdrop of continued decline in the use of external sources of funding of all types by start-up entrepreneurs since 2009.

Levie said: "While this reduction is understandable in the current economic climate it raises the danger of under-funded and possibly short-lived start-ups. We need to find new ways to fund start-ups – and they are starting to appear, like crowd-funding and peer-to-peer lending."

The report pointed to a particularly high increase in entrepreneurship in Wales which it said could be down to efforts by the Wales government to boost new companies.

"Since 2002, the proportion of people aged between 18 and 29 in Wales grew steadily from 3.4% in 2002 to a remarkable 9.7% in 2011," Levie added. "Is it a coincidence that the Welsh government has had a comprehensive set of entrepreneurship policies aimed at young people throughout that time period?"

Click on the link below to download the full report:

About Dan Martin

About Dan Martin

Dan Martin has 10 years experience as a journalist writing about entrepreneurs and the issues that affect them.

After three years working as a researcher for Sky News, he joined BusinessEurope.com as a reporter. This was followed by two years working as news editor for Startups.co.uk during which time Dan also contributed to Growing Business magazine. In 2006, he joined Sift Media as business editor before being promoted to editor of BusinessZone.co.uk. He also has responsibility for UK Business Forums, the UK’s most active online forums for small business entrepreneurs. In addition, Dan founded The Pitch, BusinessZone.co.uk's nationwide competition for small business owners. He host the grand finals in 2009 and 2010 in front of an audience of 300. 

As well as interviewing many entrepreneurs, Dan has written content for leading business organisations such as the Department for Business, Enterprise and Regulatory Reform, British Chambers of Commerce, Forum of Private Business, Investors in People and Business Link for London. Among the publications that have quoted Dan are The Times, Mail On Sunday, Financial Times, Personnel Today and Bristol Evening Post. His articles have also been published by publications including eGov Monitor, Virgin Express in-flight magazine and Personal Success.

Dan regularly speaks at events about small business and social media issues. Among the events he has presented at are the National Federation of Enterprise Agencies' annual conference, Learning Technologies, Publishing Expo and World of Learning. He has also chaired high profile debates featuring senior representatives from Business Link and the Federation of Small Businesses and Dragons' Den judge James Caan.

Dan was named the 10th most influential political blogger on Twitter by the Independent and won the public award for best B2B tweeter at the Golden Twits 2010. He also organised the Bristol Twestival, part of a global Twitter driven charity initiative, in February 2009 and March 2010. Volunteers from 175 cities around the world organised events using the social network. In total, $350,000 was raised for charity: water in 2009 and $500,000 for Concern in 2010. In Bristol, £1,500 and £5,600 was raised.

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