Evidence based policy on entrepreneurship in the UK Ian Kay, 5 December 2006 Small Business Service (SBS), an agency of the DTI

EVIDENCE BASED POLICY ON ENTREPRENEURSHIP IN THE UK UK / England DTI sets some laws which apply to all 60 million people in UK; but within DTI, SBS only sets entrepreneurship policy for the 50 million in England Entrepreneurship policy outside England is set by: Scottish Executive Welsh Assembly Government Department of Trade, Enterprise and Investment Northern Ireland

EVIDENCE BASED POLICY ON ENTREPRENEURSHIP IN THE UK How will we measure success? Statisticians, researchers and economists discussed with our customers who decide government policy: What does success look like? How will we know if we are achieving our goals?

EVIDENCE BASED POLICY ON ENTREPRENEURSHIP IN THE UK Where will we get the data from? Productivity of small businesses Office for National Statistics Annual Business Inquiry Gap between male and female self-employment Office for National Statistics Labour Force Survey Equity investments in early stage businesses British Venture Capital Association Businesses seeking external advice before start-up ? Businesses citing regulation as an obstacle to success ?

EVIDENCE BASED POLICY ON ENTREPRENEURSHIP IN THE UK Design new data collection Annual Small Business Survey ~8,000 telephone interviews with owner/managers of businesses from 0 to 249 employees Stratified random sampling from Dun & Bradstreet, weighted to represent UK SMEs Can split by industry, employment, geography, turnover, age, if part-time, sex, ethnicity, disability, urban / rural, rich / poor district

EVIDENCE BASED POLICY ON ENTREPRENEURSHIP IN THE UK An offer to share survey results How many people do you currently employ? How many did you employ 12 months ago? How many do you expect to employ in 12 months time? Does your business sell outside the UK? Do you aim to grow your business? Why / why not? Have you tried to obtain finance? How much? What for? Did you have a difficulties? Questionnaires and results at Over 200 questions Is your business a family-owned business?

EVIDENCE BASED POLICY ON ENTREPRENEURSHIP IN THE UK Problems we still face: Longitudinal or cross-sectional? Cross-sectional survey better at measuring absolute value? Longitudinal survey better at measuring change? Longitudinal surveys can contaminate some measures If two surveys ask the same person Have you used this website, the second survey will show higher usage

EVIDENCE BASED POLICY ON ENTREPRENEURSHIP IN THE UK Problems we still face: Discontinuities Contractor introduced helpful wording to focus the mind of the interviewee But this made previous results inconsistent

EVIDENCE BASED POLICY ON ENTREPRENEURSHIP IN THE UK Problems we still face: Overall assessment Which is better: Increasing the proportion of businesses seeking advice from 60% to 65%; or increasing the proportion of businesses that innovate from 30% to 35%? Perhaps economic growth is the only thing that counts as success – but this takes time

EVIDENCE BASED POLICY ON ENTREPRENEURSHIP IN THE UK Ian Kay Assistant Statistician DTI Small Business Service +44 (0)