Should the Government support the startup economy?
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Should the government be responsible for supporting the startup economy?

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Published 16/11/2018

Should the government be responsible for supporting the startup economy?

The short answer is no. Innovation and market disrupting technology is likely to come from the ground up but the UK Government should be responsible for lowering the barriers which may restrict startups. 

In collaboration with Tech Nation, Theresa May has spoken of the government’s support for the digital sector, both as a whole and in terms of how the benefits that it brings can be distributed across the UK.

Ranging from advice and support through to grants and R&D tax credits the government certainly has plenty to offer startups including recent proposals which are intended to prevent larger businesses blocking their suppliers from securing invoice financing. 

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But should the government be going to all this effort? Tech Nation reports that the UK digital sector drives a turnover of £170bn, while supporting some 2.1 million jobs – can the industry do more to promote innovation themselves? 
The tech economy does come in for criticism with the financial benefits of the current digital revolution are unquestionably concentrated in the hands of relatively few; corporate structuring frequently works to minimise tax liabilities; and making processes dramatically more efficient can, of course, come at the cost of many other jobs.

Juliet Eccleston, Co-Founder of professional recommendation platform AnyGood? argues that diverse hiring is critical for startup success – and that it perhaps also delivers a unique benefit. “If you have people in your business who may have been constrained in some way in their life, they will have a unique perspective on how to tackle challenges,” she says. “They will already think differently. They have the key skill of working out how to achieve something that is incredibly difficult. All too often, I see roles being advertised for people with set industry experience, when in fact not only is it not needed for the role, it would be of benefit for someone to come in with fresh, new thinking.”

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The real drive for innovation, though, remains with the individual, says Neelendra Nath, startup advisor and mentor, and Founder and CEO of Innovitas. “For all the support available, the first tough step – to take the decision to be an entrepreneur – is solely on the strength of the individual and not on the systematic support that is provided,” he says. After all, the government can lower barriers – but change has to come from the ground up. 

Neelendra sees investment as an important priority. “Investing in startups and entrepreneurs is an essential investment in the future,” he says. “Some of the greatest and most life-changing products have been put out by innovative startups and, in many ways, we know that corporates can’t really be relied upon to bring such innovation to the market.”

In our first piece on digital entrepreneurship, we explored the levers driving the economy and the availability of funding in today’s marketplace.

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