The UK is failing to provide entrepreneurs with the long-term capital needed to create the country’s own Silicon Valley, according to leading fund manager Neil Woodford.
Speaking to the BBC as part of the broadcaster’s Tech Talent coverage, Woodford argued that the UK is failing to realise the global potential of the nation’s startups, as home-grown entrepreneurs hit a brick wall of investment.
Woodford stated that while the UK has seen lots of startups flourish at the initial stages, the country is failing to help small firms kick-on and compete on a global stage.
“We have been appallingly bad at giving these minnows the long-term capital they need,” he said.
The short-termism in financial investment for startups has prevented the UK from matching the success of the Silicon Valley in the US, Woodford argued.
Woodford founded Woodford Investment Management after leaving his role as head of UK equities at Invesco Perpetua, and was awarded a CBE in 2013 for services to the economy.
Despite recent figures from the National Association of Commercial Finance Brokers (NACFB) showing a record high of £20.7bn in lending to small businesses – a year-on-year increase of 29.8 per cent – experts have argued that a more long-term approach to investment is required to help companies compete on an international level.
Tech entrepreneur and former adviser to David Cameron, Rohan Silva, highlighted the failure to provide “scale-up cash” to small UK firms as the key reason for lack of a global presence of UK enterprise.
“There is a big role for government in providing a bunch of that funding,” he told the BBC.
The comments from Woodford and Silva represent a call for investors to match the appetite for startups, particularly amongst young people.
A recent survey of 1,300 small enterprises, conducted by Company Formations MadeSimple, found a large growth in young entrepreneurs. The research showed the total number of small companies founded by people aged 35 and under to be at 280,000 – a figure that doubled between 2010 and 2015.
Research has also shown that the majority of university graduates would rather work for a startup company than work in any other industry, according to a survey of job and sector preferences by graduate recruitment company TalentPool in April.
Some 53 per cent of 1,000 respondent university leavers said that working for a young, high-growth business would be their first choice to start a career in.
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