Wednesday, 08 August 2007 02:15
Researchers at the University of Sheffield have found that there has been little improvement in rates of entrepreneurship and enterprise development since the Labour government came to power in 1997.
The Communication Workers Union (CWU) has suspended new 24-hour postal strikes across the country due to commence at 7pm tonight.
Dr Robert Huggins and Nicholas Williams, of the University of Sheffield´s Management School, found that although the Labour government has put in place a range of policies to tackle barriers to enterprise and entrepreneurship development, business start-up rates across the UK have actually fallen since 1997, while self-employment rates are the same as in 1997.
According to the report, the Labour government has had little success in creating the required improvements in rates of entrepreneurial activity by taking an `any new business will do´ attitude to enterprise policy.
The study further found that the Labour government´s dismantling of the Training and Enterprise Council (TEC) framework, originally established by the previous Conservative government, significantly set back the progress of enterprise policy across the UK.
Recent years have seen a return to this approach with the introduction of Local Enterprise Growth Initiative. However the researchers suggest more needs to be done in order for the government to achieve its aims of closing the productivity and enterprise gap with economies such as the US.
They argue that a more focused approach to current enterprise policy is needed as well as increased support for budding entrepreneurs. They believe the key factors necessary are: long term government commitment to lower taxation, reducing the size of government, providing effective support for potential and existing entrepreneurs, and fostering enterprise in schools.
The report does state that the Labour government has put in place a number of positive measures to harness the long-term drivers of future enterprise development, particularly the cultural changes made in the education system. But the researchers believe more is needed to establish an enterprise culture in the UK.
Dr Huggins said: "Since Labour came into power in 1997 there has been an increased dependence on public sector employment. This has had a huge impact on promoting entrepreneurship. Individuals weigh-up the risks and rewards associated with wage employment and business ownership. With increased levels of public sector employment available, individuals may be less inclined to take entrepreneurial risks and choose relatively secure wage employment. However, despite the obviously important role played by the public sector, it is still largely the private sector that creates value and is the engine of growth and economic development."
"If policies are adapted to address these issues and more support is given to entrepreneurs, the UK can move towards a truly dynamic, modern and growing knowledge-based economy, which boosts productivity and creates employment and prosperity."
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