BAROMETER IDINVEST. UK Entrepreneurship

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1 BAROMETER IDINVEST UK Entrepreneurship February 2018

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3 IT IS NO SURPRISE TO US THAT LONDON'S ENTREPRENEURIAL DNA STANDS OUT FROM THE REST OF THE UK. LONDON'S UNIQUE ECOSYSTEM, TALENT POOL AND GLOBAL OUTLOOK CONTINUES TO PROTECT UK ENTREPRENEURS FROM THE POTENTIOAL IMPACTS OF BREXIT Dan Rogers, CSO and Co-Founder of Peakon

4 FOREWORD Entrepreneurs have confirmed their position on the world stage and received recognition for the crucial role the entrepreneurial spirit plays in supporting both economic and social progress. In France this year we have welcomed President Macron s pro-business agenda and vision for a start-up nation. However, this progress masks the still significant challenges facing the next generation of entrepreneurs across Europe. Issues such as financing and economic security cannot be overlooked. We are heartened to again see such a strong entrepreneurial sentiment amongst the British people, especially amongst the younger generation, and excited to support the growth of the UK companies of the future. Christophe Baviere, CEO, and Benoist Grossmann, Managing Partner

5 TABLE OF CONTENTS INTRODUCTION AND METHODOLOGY 6 KEY FINDINGS 7 THE ENTREPRENEURIAL ENVIRONMENT 12 ENTREPRENEURIAL MOTIVATION 12 ENTREPRENEURSHIP IN THE UK BEST PLACES TO START A BUSINESS IN EUROPE UK START-UP ENVIRONMENT THE PROFILE OF THE ENTREPRENEUR ENTREPRENEURIAL STATUS SOURCES OF FINANCING SECTOR SPOTLIGHT MOTIVATIONS THE FINAL DECISION ECONOMIC CONFIDENCE IN THE UK THE BRITISH ECONOMY BRITISH ECONOMIC OUTLOOK REGIONAL OUTLOOK FOR ENTREPRENEURSHIP ECONOMIC ADVANTAGES SECTOR OUTLOOK YOUNG ENTREPRENEURS ANNEX 40 IDINVEST SENTIMENT INDEX FEBRUARY SURVEY DETAILS 41

6 INTRODUCTION AND METHODOLOGY INTRODUCTION: Idinvest Partners is pleased to share the findings of its second barometer tracking the UK s attitude towards entrepreneurship. Idinvest Partners surveyed a representative sample of the UK population to find out: Has the DNA of a UK entrepreneur changed? How strong is entrepreneurial motivation amongst the population? Are they optimistic or pessimistic in a post-brexit environment? Do they believe that Britain is still the best place to start a business? The UK version of this barometer is presented in tandem with the French Idinvest Partners Index, which has been published with Le Figaro since METHODOLOGY: Online survey carried out by Viavoice on behalf of Idinvest Partners between the 15 th and the 22 nd of January United Kingdom: Sample size of 1,500 people, plus an additional sample of 300 young people (18-29 years old), and a further additional sample of 300 people in Scotland. In total: 2,100 unique online respondents. Representation determined through the quota sampling method according to the following criteria: gender, age, respondent occupation, region

7 KEY FINDINGS The British public remains positive, despite the uncertainty on the horizon resulting from the Brexit negotiations. When we compare the results with the 2017 Barometer, there is undoubtedly a greater sense of caution, reflected in the 20% decrease in the percentage of the population motivated to start a business. However, these findings also show that would be entrepreneurs in the age group s commitment to starting a new business has not been dented and that they are demonstrating a youthful resilience and optimism. Respondents in this age category were 20% more likely to be motivated to start a business. Unsurprisingly, young respondents were also found to rate ambition and risk-tasking as more important personal values for entrepreneurs than those in the older generation. KEY FIGURES: A start up capital: 49% of Londoners are motivated to start a business, which is 16% higher than the UK as a whole 33% of the population still consider the UK as one of the best countries to start a business, down from 44% in 2017 Germany, Scandinavia and Sweden are thought of as the best locations to start a business in Europe outside of the UK 31% of the total population surveyed have a definitive plan to start a business in the next year, which means that currently almost 1 out of every 3 people living in the UK hopes to become an entrepreneur in 2018 Results show that uncertainty on the outcome of Brexit is perceived as the strongest constraint to starting a business in the UK Entrepreneurs are systematically more optimistic than the overall population on issues such as economic growth (+17%), employment (17%), purchasing power (+18%) and inflation (+) 7

8 REGIONAL FOCUS Londoners are 11% more optimistic about the UK s entrepreneurship prospects in comparison to Europe than the rest of the UK Southern England is most pessimistic about the UK s prospect for entrepreneurship in comparison to Europe London was voted as the best place to start a business in 2 years time, closely followed by Central, Southern and Northern England Northern Ireland and Wales were voted as the least promising locations to start a business in 2 years time 57% of respondents from London are either optimistic or very optimistic about the 12 month outlook for the British economy 59% of respondents from Scotland are either pessimistic or strongly pessimistic about the 12 month outlook for the British economy THE BRITISH ECONOMY IN Results show that uncertainty on the outcome of Brexit is perceived as the strongest constraint to starting a business in the UK Overall, 49% of the population are optimistic about the the 12 month outlook for British economy compared to 57% in 2017 However, 68% of those respondents who were motivated to start a business are either optimistic or strongly optimistic about the 12 month outlook for British Economy More broadly, the top two concerns for the UK population on the economic outlook for the UK are inflation and economic growth

9 YOUNG BRITISH ENTREPRENEURS Compared with the general population of entrepreneurs, UK entrepreneurs between 18 and 29 show some particularities. 80% of young would be entrepreneurs believe that their generation have unique strengths and skills. These specific strengths are identified as: - A better knowledge of new technologies and digital practices; - A better knowledge of consumer trends; - A strong drive for autonomy and flexibility. 53% of them believe it is easier for them to set up a business than it was for previous generations 76% of young people motivated to start a business and living in London say it is easier to set up their project compared with older generations THE FUNDING CHALLENGE The challenge of funding remains at the core of UK entrepreneurs concerns. For 37% of those surveyed, financing needs is the main issue affecting their final decision on whether to launch their company. When confronted with a variety of funding sources, the UK still focuses primarily on traditional sources such as: personal savings (49%); one or more bank loans (27%); public sector assistance (23%). 9

10 THE PROFILE OF A BRITISH ENTREPRENEUR 31% of those interested in starting a business already have a concrete plan to execute the project in the next coming year (2% more than 2017). In comparison with the last survey, the motivations behind entrepreneurship have slightly changed over the last twelve months. While financial success and expected increase in income were the first motivations in 2017, this time these financial motivations arrive in second place, behind a set of motivations linked with the desire to be free and independent and to develop an idea for a product or business with potential. Overall, in two years time, the sectors considered most attractive and promising for entrepreneurs across all age groups in the UK are set to be: Science and technology; Information and communication (with a focus on young entrepreneurs); Finance and insurance; Manufacturing, energy, water and mining (with a focus on young entrepreneurs); 10 Real estate (with a focus on young entrepreneurs).

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12 THE ENTREPRENEURIAL ENVIRONMENT ENTREPRENEURIAL MOTIVATION IF YOU HAD THE OPPORTUNITY, WOULD YOU START YOUR OWN BUSINESS? 2017 Reminder*: 41% NO NO ANSWER 33% 61% 6% 12 YES 2017 Reminder: 53% 53% of young people (18-29) are motivated to start their own business (+ 20 points more than the total population) 49% of people living in London are motivated to start their own business 28% of people living in Scotland are motivated to start their own business *THE FIRST UK IDINVEST BAROMETER WAS CONDUCTED IN FEBRUARY 2017 AMONG 1,500 RESPONDENTS.

13 AGE AND EXPERIENCE AT THIS MOMENT, IF YOU HAD THE OPPORTUNITY, WOULD YOU BE MOTIVATED TO START YOUR OWN BUSINESS? years 52% years years 65+ years 38% 23% 16% AT WHAT AGE DO YOU THINK THAT YOU WOULD BE MOST LIKELY ABLE TO START YOUR OWN BUSINESS? 62% Between 15 and 40 years UK POPULATION 33% 2% 28% 32% 18% 15% Above 40 years 5% years years years years 50+ years No answer 1% 4% years years 63% years UNDER 30s 32% years 99 % of respondents aged between 18 and 29 believe that it is possible before they reach % of respondents aged between 18 and 29 believe that it is possible before they reach 30 SAMPLE: PERCENTAGE OF RESPONDENTS MOTIVATED TO START THEIR OWN BUSINESS BY AGE 13

14 ENTREPRENEURSHIP IN THE UK COMPARED WITH OTHER MAJOR EUROPEAN ECONOMIES SUCH AS FRANCE, GERMANY OR ITALY, DO YOU BELIEVE THE UK IS PERCEIVED AS ONE OF THE BEST COUNTRIES TO START A BUSINESS INTERNATIONALLY? 2017 Reminder: 44% THE UK IS ONE OF THE BEST COUNTRIES TO START A BUSINESS 2017 Reminder: 29% NEITHER BETTER NOR WORSE NO ANSWER 33% 22% 32% 13% 52% among people motivated to start their own business (+19 points) 35% of young people between 18 and 29 years old (+2 points) THE UK IS NOT PERCEIVED AS ONE OF THE BEST COUNTRIES TO START A BUSINESS 2017 Reminder: 17% 14

15 ENTREPRENEURSHIP IN THE UK (REGIONAL BREAKDOWN) COMPARED WITH OTHER MAJOR EUROPEAN ECONOMIES SUCH AS FRANCE, GERMANY OR ITALY, DO YOU BELIEVE THE UK IS PERCEIVED AS ONE OF THE BEST COUNTRIES TO START A BUSINESS INTERNATIONALLY? UK 2018 Total population NO ANSWER 33% 22% 32% 13% ONE OF THE BEST COUNTRIES TO START A BUSINESS NOT ONE OF THE BEST COUNTRIES TO START A BUSINESS NEITHER BETTER NOR WORSE London 44% 15% 28% 13% Central 34% 24% 30% North. England 31% South. England Scotland 28% 29% 21% 23% 30% 33% 38% 29% 15% 11% 15

16 BEST PLACES TO START A BUSINESS IN EUROPE OF THE FOLLOWING COUNTRIES, WHICH ONE(S) DO YOU BELIEVE HAS THE BEST REPUTATION TO START A BUSINESS? UK TOTAL POPULATION PEOPLE MOTIVATED TO START A BUSINESS GERMANY 39% 38% SWITZERLAND 21%21% 24% SWEDEN DENMARK NORWAY 19% 20% 14% 17% 13% 14% FRANCE 16% IRELAND LUXEMBOURG SPAIN NO ANSWER 11% 8% 11% 5% 8% 21% of respondents aged consider France to be one of the best countries to start a business (+9 points) 19% 27% 16

17 BEST PLACES TO START A DIGITAL BUSINESS IN EUROPE OF THE FOLLOWING COUNTRIES, WHICH DO YOU THINK HAS THE BEST REPUTATION TO START A BUSINESS IN THE DIGITAL SECTOR? UK TOTAL POPULATION PEOPLE MOTIVATED TO START A BUSINESS GERMANY 30% 32% SWITZERLAND 21%16% 19% SWEDEN IRELAND DENMARK 14% 11% 14% 9% FRANCE 8% 13% NORWAY LUXEMBOURG SPAIN NO ANSWER 8% 7% 8% 4% 8% 16% of respondents aged consider France as the best countries to start a business in the digital sector (+9 points) 28% 39% 17

18 FOCUS ON GERMANY WHY DO YOU BELIEVE THAT GERMANY HAS THE BEST REPUTATION TO START A BUSINESS? UK TOTAL POPULATION PEOPLE MOTIVATED TO START A BUSINESS THE NATIONAL ECONOMIC ENVIRONMENT THE SIZE OF GERMANY'S INTERNAL MARKET AND THE GERMAN SPEAKING AREA THE CURRENT GOVERNMENT'S ECONOMIC POLICY UNCERTAINTY ON THE OUTCOME OF BREXIT 21% 42% 47% 21%41% 40% 32% 33% 30% RELIABILITY OF LEGAL FRAMEWORK AND JURISDICTION 20% 25% THE GLOBAL GEOPOLITICAL ENVIRONMENT 20% 22% THE CURRENT FUNDING ENVIRONMENT THE SPEED OF ACTION OF PUBLIC AUTHORITIES THE OUTLOOK WITHIN THE TARGET SECTOR OF YOUR BUSINESS NO ANSWER 16% 22% 13% 8% 11% 4% 1% 18

19 FOCUS ON GERMANY WHY DO YOU THINK THAT GERMANY HAS THE BEST REPUTATION TO START A BUSINESS IN THE DIGITAL SECTOR? UK TOTAL POPULATION PEOPLE MOTIVATED TO START A BUSINESS GERMANY IS VERY WELL POSITIONED IN THE AREA OF EMERGING DIGITAL TALENT GERMANY IS A GOOD PLACE TO START AND GROW A COMPANY IN GENERAL DIGITAL INFRASTRUCTURE GERMANY IS A GOOD STARTING POINT FOR INTERNATIONAL EXPANSION SPECIALISATION OF GERMANY IN THE IT SECTOR INVESTMENTS IN DIGITAL TECHNOLOGIES ATTRACTIVENESS FOR FOREIGN COMPANIES IT RESEARCH SPENDING 31% 30% 21%29% 28% 25% 26% 30% 26% 22% 22% 23% 22% 18% 20% 20% 37% THE SPEED OF ACTION OF PUBLIC AUTHORITIES RELIABILITY OF LEGAL FRAMEWORK AND JURISDICTION PUBLIC SUBSIDY/PROMOTION PROGRAMMES OTHER/NO ANSWER 2% 4% 9% 9% 9% 9% 6% 19

20 UK START-UP ENVIRONMENT FOR THE FOLLOWING ITEMS, WOULD YOU SAY THAT THEY CURRENTLY REPRESENT MORE AN ADVANTAGE OR MORE A CONSTRAINT TO START A BUSINESS IN THE UK? ADVANTAGE CONSTRAINT NO ANSWER PEOPLE MOTIVATED TO CREATE A BUSINESS UNDER 30S The national economic environment ADV. CON. ADV. CON. 36% 47% 17% 54% 36% 41% 44% The current government s economic policy 30% 51% 19% 47% 40% 35% 47% The current funding environment 28% 50% 22% 44% 45% 37% 47% The global geopolitical environment 32% 43% 25% 49% 37% 40% 38% The European economic outlook 31% 51% 18% 46% 44% 38% 45% 20 Uncertainty on the outcome of Brexit 20% 32% 65% The outlook within your business's target sector SAMPLE: 1,500 RESPONDENTS 33% 35% People motivated to create a business and under 30s are systematically more positive 15% 33% 53% 57% 28% SAMPLE: 498 RESPONDENTS 26% 43% 62% 34% SAMPLE: 617 RESPONDENTS

21 UK START-UP ENVIRONMENT FOR FOLLOWING ITEMS, WOULD YOU SAY THAT THEY CURRENTLY REPRESENT MORE AN ADVANTAGE OR MORE A CONSTRAINT TO START A BUSINESS IN THE UK? (AMONG PEOPLE MOTIVATED TO CREATE A BUSINESS) ADVANTAGE CONSTRAINT NO ANSWER REMINDER 2017 The national economic environment ADV. CON. 54% 36% +3 10% 55% 33% The current government s economic policy 47% 40% 13% 49% 38% The current funding environment 44% 45% +5 11% 44% 40% The global geopolitical environment 49% +3 37% 14% 46% 42% The European economic outlook 46% % 10% 36% 53% Uncertainty on the outcome of Brexit 33% 57% The outlook within your business's target sector 53% +8 28% 19% 10% 29% 45% 59% 30% 21

22 THE PROFILE OF THE ENTREPRENEUR ENTREPRENEURIAL STATUS DO YOU CURRENTLY HAVE A CONCRETE PLAN TO START YOUR OWN BUSINESS THAT YOU INTEND TO CARRY OUT IN THE COMING YEAR? 2017 Reminder: 65% +2 NO 31% 65% NO ANSWER 4% 22 YES 2017 Reminder: 29% 40% of young people (18-29) who are motivated to start their own business already HAVE a concrete plan to launch their project (+9 points) 46% of people living in London who are motivated to start their own business already HAVE a concrete plan to launch their project (+15 points) SAMPLE : PEOPLE MOTIVATED TO START A BUSINESS

23 SOURCES OF FINANCING WHAT SOURCES OF FINANCING WOULD YOU HOPE TO ACCESS IN ORDER TO START YOUR OWN BUSINESS? ALL ENTREPRENEURS YOUNG ENTREPRENEURS (18-29 YEARS) YOUR PERSONAL SAVINGS 49% 50% ONE OR MORE BANK LOANS GRANT FUNDING 27% 29% 20% 23% CROWDFUNDING PRIVATE EQUITY FUNDS 13% 18% CONTRIBUTIONS FROM YOUR RELATIVES PUBLIC SECTOR ASSISTANCE NOT SURE AT THIS TIME OTHERS/NO ANSWER 6% 3% 17% 10% 15% 16% 13% SAMPLE : PEOPLE MOTIVATED TO START A BUSINESS Respondents aged between 18 and 29 are more inclined to use private equity funds (+6 points), contributions from relatives (+5 points), and public sector assistance (+5 points) 23

24 SECTOR SPOTLIGHT IN WHICH INDUSTRY SECTOR WOULD YOU BE INTERESTED IN STARTING YOUR BUSINESS? WHOLESALE AND RETAIL TRADE ARTS, ENTERTAINMENT AND LEISURE ACTIVITIES 24% 23% HOTELS AND RESTAURANTS INFORMATION AND COMMUNICATION 16% 15% REAL ESTATE ACTIVITIES SCIENCE AND TECHNOLOGY ACTIVITIES EDUCATION, HEALTHCARE AND SOCIAL ACTION 9% 24 BUILDING AND CONSTRUCTION FINANCIAL AND INSURANCE ACTIVITIES TRANSPORTATION FARMING, FISHING, FORESTRY AND LOGGING MANUFACTURING, ENERGY, WATER AND MINING INDUSTRY NO ANSWER 3% 5% 5% 6% 7% 8% 9% SAMPLE : PEOPLE MOTIVATED TO START A BUSINESS Young UK entrepreneurs aged between 18 and 29 are more inclined to have an interest in hotels and restaurants (+4 points) and financial and insurance activities (+5 points)

25 MOTIVATION: LONG-TERM FACTORS WHY DO YOU WANT TO START YOUR OWN BUSINESS? ALL ENTREPRENEURS YOUNG ENTREPRENEURS (18-29 YEARS) BE FREE AND INDEPENDENT FINANCIAL SUCCESS TO MAKE BETTER USE OF YOUR SKILLS AND CREATIVITY PERSONAL AND PROFESSIONAL GROWTH TO CHALLENGE YOURSELF AND BE EXPOSED TO NEW EXPERIENCES BRING AN IDEA OR VISION TO LIFE DO SOMETHING DIFFERENT OR CHANGE THINGS PASS SOMETHING ON TO FUTURE GENERATIONS TO MAKE A DIFFERENCE TO SOCIETY A CHANGE IN WORKPLACE OR WORK SITUATION INNOVATE IN YOUR SECTOR LEAD PEOPLE OR TEAMS WORK IN A CLOSE KNIT TEAM NO ANSWER 5% 5% 3% 1% 7% 11% 6% 9% 13% 14% 11% 18% 20% 19% 17% 18% 20% 17% 30% 28% 24% 25% 31% SAMPLE: PEOPLE MOTIVATED TO START THEIR OWN BUSINESS 36% 40% 45% Young entrepreneurs are more likely to be motivated by financial success (+6 points), personal and professional growth (+6 points), and to make a difference to society (+5 points) 25

26 MOTIVATION: SHORT-TERM FACTORS WHAT ARE THE REASONS THAT LED YOU TO PLAN TO START YOUR OWN BUSINESS? (ALL ENTREPRENEURS) 26 AN IDEA FOR A PRODUCT OR BUSINESS WITH POTENTIAL EXPECTED INCREASE IN INCOME PROFESSIONAL EXPERIENCE OPTIMISING YOUR TIME EFFECTIVELY AND PRODUCTIVITY DECIDED TO CHANGE PROFESSIONS UNEMPLOYMENT ANTICIPATION OF A GOOD RETURN RECEIVED ENCOURAGEMENT TARGET MARKET DEMONSTRATES POTENTIAL A FAVOURABLE ECONOMIC CLIMATE AN EFFECTIVE AND SUPPORTIVE NETWORK RAISED THE REQUIRED AMOUNT OF CAPITAL MAKING PERSONAL SACRIFICES NOT AN IMMEDIATE CONCERN IDENTIFIED A TRUSTED TEAM OF PEOPLE STRATEGIC INFORMATION PROVIDE A COMPETITIVE ADVANTAGE THE NECESSARY ADMINISTRATIVE PROCEDURES SEEM SIMPLE RECEIVED ASSISTANCE FROM A SPECIALISED ORGANISATION OBTAINED A BANK LOAN ON FAVOURABLE TERMS NO ANSWER 15% 15% 14% 13% 11% 10% 10% 7% 7% 6% 5% 5% 4% 3% 3% 14% 18% SAMPLE: PEOPLE MOTIVATED TO START THEIR OWN BUSINESS 20% 24%

27 MOTIVATION: SHORT-TERM FACTORS WHAT ARE THE REASONS THAT LED YOU TO PLAN TO START YOUR OWN BUSINESS? YOUNG ENTREPRENEURS (18-29 YEARS) EXPECTED INCREASE IN INCOME OPTIMISING YOUR TIME EFFECTIVELY AND PRODUCTIVITY AN IDEA FOR A PRODUCT OR BUSINESS WITH POTENTIAL PROFESSIONAL EXPERIENCE UNEMPLOYMENT DECIDED TO CHANGE PROFESSIONS ANTICIPATION OF A GOOD RETURN RECEIVED ENCOURAGEMENT TARGET MARKET DEMONSTRATES POTENTIAL RAISED THE REQUIRED AMOUNT OF CAPITAL A FAVOURABLE ECONOMIC CLIMATE AN EFFECTIVE AND SUPPORTIVE NETWORK IDENTIFIED A TRUSTED TEAM OF PEOPLE STRATEGIC INFORMATION PROVIDES COMPETITIVE ADVANTAGE THE NECESSARY ADMINISTRATIVE PROCEDURES SEEM SIMPLE RECEIVED ASSISTANCE FROM A SPECIALISED ORGANISATION OBTAINED A BANK LOAN ON FAVOURABLE TERMS MAKING PERSONAL SACRIFICES NOT AN IMMEDIATE CONCERN NO ANSWER 13% 13% 13% 11% 10% 9% 9% 7% 7% 6% 6% 5% 4% 8% SAMPLE: PEOPLE MOTIVATED TO START THEIR OWN BUSINESS 16% 16% 22% 21% 20% 27

28 MOTIVATION TOP 5 SHORT-TERM FACTORS ALL UK ENTREPRENEURS AN IDEA FOR A PRODUCT OR BUSINESS WITH POTENTIAL YOUNG UK ENTREPRENEURS (18-29 YEARS) EXPECTED INCREASE IN INCOME EXPECTED INCREASE IN INCOME OPTIMISING YOUR TIME EFFECTIVELY AND PRODUCTIVITY PROFESSIONAL EXPERIENCE AN IDEA FOR A PRODUCT OR BUSINESS WITH POTENTIAL OPTIMISING YOUR TIME EFFECTIVELY AND PRODUCTIVITY PROFESSIONAL EXPERIENCE 28 DECIDED TO CHANGE PROFESSIONS UNEMPLOYMENT

29 THE FINAL DECISION WHAT IS THE DECIDING FACTOR THAT STANDS BETWEEN YOUR CURRENT SITUATION AND ACTUALLY STARTING YOUR OWN BUSINESS? FINANCING NEEDS 42% A CONCRETE THOROUGH BUSINESS PLAN WILL TO SUCCEED 25% 23% THE RIGHT TIME ECONOMICALLY OR IN MY INDUSTRY A NEW IDEA OR INNOVATIVE PRODUCT TO DEVELOP THE RIGHT TIME IN MY INDUSTRY AND THE BROADER ECONOMY THE RIGHT BUSINESS PARTNER SUPPORT/ENCOURAGEMENT FROM FRIENDS AND FAMILY 17% 17% 16% 15% 15% OTHERS NO ANSWER 10% 8% TOTAL GREATER THAN 100%: MORE THAN ONE ANSWER POSSIBLE SAMPLE: PEOPLE MOTIVATED TO START THEIR OWN BUSINESS 29

30 THE FINAL DECISION REGIONAL FOCUS WHAT IS THE DECIDING FACTOR THAT STANDS BETWEEN YOUR CURRENT SITUATION AND ACTUALLY STARTING YOUR OWN BUSINESS? ALL UK ENTREPRENEURS TOP 3 DECIDING FACTORS FINANCING NEEDS A CONCRETE THOROUGH BUSINESS PLAN WILL TO SUCCEED Scotland Northern England Central Scotland Southern England FINANCING NEEDS FINANCING NEEDS FINANCING NEEDS FINANCING NEEDS FINANCING NEEDS THE RIGHT BUSINESS PARTNER A CONCRETE THOROUGH BUSINESS PLAN WILL TO SUCCEED WILL TO SUCCEED A CONCRETE THOROUGH BUSINESS PLAN A CONCRETE THOROUGH BUSINESS PLAN THE RIGHT TIME IN THE INDUSTRY A CONCRETE THOROUGH BUSINESS PLAN A CONCRETE THOROUGH BUSINESS PLAN A NEW IDEA TO DEVELOP 30

31 PERSONAL VALUES WHICH PERSONAL VALUES ARE YOU MOST ATTACHED TO? ALL ENTREPRENEURS YOUNG ENTREPRENEURS (18-29 YEARS) HARD WORK MORALITY AND ETHICS TOLERANCE AND KINDNESS DETERMINATION FREEDOM AND INDEPENDENCE TEAMWORK SELF-CONFIDENCE AMBITION MODESTY AND HUMILITY ORGANISATION RISK TAKING SHARING NO ANSWER 32% 25% 31% 27% 27% 28% 24% 18% 23% 24% 21% 20% 21% 26% 18% 19% 15% 11% 16% 9% 1% 2% SAMPLE: PEOPLE MOTIVATED TO START THEIR OWN BUSINESS 45% 43% 31

32 ECONOMIC CONFIDENCE IN THE UK THE BRITISH ECONOMY OVER THE NEXT TWELVE MONTHS, HOW OPTIMISTIC ARE YOU ABOUT THE BRITISH ECONOMY? VERY OPTIMISTIC FAIRLY OPTIMISTIC FAIRLY PESSIMISTIC VERY PESSIMISTIC NO ANSWER UK TOTAL POPULATION OVERALL «OPTIMISTIC» 49 % 7% 42% 37% 8% 6% 55% of respondents aged 18-29) are either optimistic or very optimistic (+6 points) 57% of respondents from London are either optimistic or very optimistic (+8 points) 59% of respondents from Scotland are either pessimistic or strongly pessimistic (+14 points) In 2017, 57% of all respondents in the UK were optimistic (- 8 points in 2018 ) UK ENTREPRENEURS OVERALL «OPTIMISTIC» 68 % 32 15% 53% 24% 4% 4% 68% of UK respondents motivated to start a business are either optimistic or strongly optimistic (+ 20 points than the national average) 68% of young people motivated to start a business, in the age group, are either optimistic or very optimistic (+13 points than the rest of the UK young respondents) In 2017, 67% of all respondents in the UK that were motivated to start a business were optimistic (+1 point in 2018 )

33 BRITISH ECONOMIC OUTLOOK OVER THE NEXT SIX MONTHS, WOULD YOU SAY YOU ARE RATHER OPTIMISTIC OR PESSIMISTIC ABOUT? OPTIMISTIC PESSIMISTIC NO ANSWER UK POPULATION UK ENTREPRENEURS YOUNG ENTREPRENEURS EMPLOYMENT 44% 41% 15% 61% 32% 7% 59% 32% 9% ECONOMIC GROWTH 42% 50% 8% 59% 35% 5% 57% 35% 8% PURCHASING POWER 37% 48% 15% 55% 37% 8% 54% 34% INFLATION 29% 60% 11% 41% 50% 9% 39% 48% 13% People motivated to create a business are more optimistic about the British economy than the average respondent. Yet, there is a common negative perception regarding inflation in the next six months 33

34 REGIONAL OUTLOOK FOR ENTREPRENEURSHIP IN YOUR OPINION, IN TWO YEARS TIME, WHICH UK REGIONS WILL BE THE BEST PLACE TO START A BUSINESS? 31% 22% 26% 17% 17% 11% SCOTLAND CENTRAL NORTHERN ENGLAND LONDON SOUTHERN ENGLAND NORTHERN IRELAND / WALES NO ANSWER 34 SAMPLE: 1500 RESPONDENTS

35 ECONOMIC ADVANTAGES IN YOUR OPINION, IN TWO YEARS TIME, WHAT WILL BE THE MAIN ECONOMIC ADVANTAGES OF THE UK? UK TOTAL POPULATION PEOPLE MOTIVATED TO START A BUSINESS ENGLISH IS THE PREFERRED LANGUAGE OF BUSINESS A MORE FLEXIBLE LEGISLATION WITH BREXIT THE UK WORKFORCE: THE PRODUCTIVITY AND SKILLS OF BRITISH WORKERS THE STRONG EXPERTISE IN CERTAIN SECTORS: FINANCE, TECHNOLOGY THE CREATIVE AND INNOVATIVE FORCES IN THE COUNTRY THE COMMERCIAL AND CULTURAL RELATIONS WITH THE US AND COMMONWEALTH COUNTRIES 33% 29% 33% 29% 30% 24% 28% 21% 23% 43% 40% 38% THE ABILITY TO ATTRACT COMPANIES THROUGH A FISCAL ADVANTAGEOUS LEGISLATION OTHER / NO ANSWER 5% 11% 16% 22% TOTAL HIGHER THAN 100%, MULTIPLE ANSWERS ALLOWED 35

36 SECTOR OUTLOOK IN YOUR OPINION, IN TWO YEARS TIME, WHICH SECTORS WILL BE MOST ATTRACTIVE AND PROMISING IN THE UK? UK TOTAL POPULATION PEOPLE MOTIVATED TO START A BUSINESS 36 SCIENCE AND TECHNOLOGY INFORMATION AND COMMUNICATION FINANCIAL AND INSURANCE BUILDING AND CONSTRUCTION HOTELS AND RESTAURANTS MANUFACTURING, ENERGY, WATER, AND MINING ARTS, ENTERTAINMENT AND LEISURE FARMING, FISHING, FORESTRY AND LOGGING REAL ESTATE INDUSTRY WHOLESALE AND RETAIL TRANSPORTATION EDUCATION, HEALTHCARE, SOCIAL ACTION NO ANSWER 10% 9% 9% 8% 10% 15% 16% 13% 16% 14% 11% 14% 16% 16% 15% 16% 19% 22% 18% 18% 21% 22% TOTAL HIGHER THAN 100%, MULTIPLE ANSWERS ALLOWED 30% 31% Compared to the overall population, entrepreneurs find more promise in the manufacturing, energy, water and mining (+6 points), education, healthcare, social action (+6 points) and real estate (+5 points) sectors

37 YOUNG ENTREPRENEURS WOULD YOU AGREE THAT CURRENTLY IT IS EASIER FOR YOUNG PEOPLE TO SET UP THEIR COMPANY COMPARED WITH OLDER GENERATIONS? STRONGLY AGREE MOSTLY AGREE MOSTLY DISAGREE STRONGLY DISAGREE NO ANSWER YOUNG POPULATION (18-29) OVERALL «EASIER» 53 % 17% 36% 26% 16% 5% 62% of young people (18-29) motivated to start a business say it is easier to set up their project compared with older generations (+ 9 points) 76% of young people (18-29) motivated to start a business AND living in London say it is easier to set up their project compared with older generations (+ 23 points) 37

38 YOUNG ENTREPRENEURS DO YOU THINK YOUR GENERATION HAS THE UNIQUE STRENGTHS AND SKILLS NEEDED TO BECOME AN ENTREPRENEUR AND START THEIR OWN COMPANY? STRONGLY AGREE MOSTLY AGREE MOSTLY DISAGREE STRONGLY DISAGREE NO ANSWER YOUNG POPULATION (18-29) OVERALL «AGREE» 71 % 20% 51% 21% 5%3% 80% of young people (18-29) motivated to start a business agree that their generation has unique strengths and skills to become entrepreneurs (+ 9 points) 4 of every 5 young people in the UK motivated to start their business think that their generation has the unique strengths and skills needed to start their business 38

39 YOUNG ENTREPRENEURS WHICH ARE THEIR SPECIFIC STRENGTHS COMPARED WITH PREVIOUS GENERATIONS? A BETTER KNOWLEDGE OF NEW TECHNOLOGIES AND DIGITAL PRACTICES A BETTER KNOWLEDGE OF CONSUMER TRENDS A STRONG DRIVE FOR AUTONOMY AND FLEXIBILITY A STRONG DRIVE TO HAVE MEANINGFUL JOBS AN OPENNESS TO EMBARKING ON MULTIPLE CAREERS AN OPTIMISTIC OUTLOOK AND BELIEF THAT YOU WILL BE ABLE TO ACHIEVE SUCCESS 33% 27% 23% 20% 19% 56% NO ANSWER 2% SAMPLE: 440 YOUNG RESPONDENTS WHICH AGREE THAT THEIR GENERATION HAS UNIQUE STRENGTHS AND SKILLS NEEDED TO BECOME AN ENTREPRENEUR 39

40 ANNEX : IDINVEST SENTIMENT INDEX FEBRUARY 2018 Idinvest Sentiment Index 339 February % PERCENTAGE OF PEOPLE THAT ARE MOTIVATED TO START THEIR OWN BUSINESS X 10.3% PERCENTAGE OF UK POPULATION HAVING A DEFINITE PLAN TO START THEIR OWN BUSINESS IN THE NEXT TWELVE MONTHS 40 The Idinvest Sentiment Index is calculated by multiplying the percentage of people that are motivated to start their own business by the total percentage of UK population having a definite plan to start their own business in the next twelve months. The index allows us to build a comprehensive picture of how entrepreneurship sentiment in the UK population evolves over time ??? FEBRUARY 2017 FEBRUARY 2018 DECEMBER 2018 MAY 2019 OCTOBER 2019

41 SURVEY DETAILS GENDER Men: 51% Women: 49% AGE 18-29: 21% / 30-49: 35% / 50-64: 23% Over 65: 21% REGION N. IRELAND, SCOTLAND, WALES (QUOTA=16%) NORTHERN ENGLAND: North E. England, North W. England, Yorkshire and Humber (QUOTA=24%) CENTRAL: East Midlands, West Midlands, East of England (QUOTA=25%) LONDON: London (QUOTA=13%) SOUTH: South East England, South West England (QUOTA=22%) OCCUPATION (final recode) Senior managerial OR Intermediate managerial, administrative OR professional OR Supervisor, clerical, junior managerial, administrative or professional OR Student (QUOTA=45%) Manual worker (with industry qualifications) OR Manual worker (with no qualifications) OR Unemployed OR Retired (QUOTA=55%) 41

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