SUPPORTING DIGITAL STARTUPS
The latest to do this is Coadec, which has been established as a non-profit organisation to support digital start-ups in the UK, a sector that has the potential to make a huge difference in the future.
The UK is the fastest growing digital nation in the G20 and this part of the economy will to be worth over 12 per cent of GDP by 2016. In addition, the UK applications industry developing smartphones and tablets is alone forecasted to grow by 800 per cent over the next ten years to £31 billion.
New developments such as ‘Silicon Roundabout’ in London where 15,000 new firms have been established in the last few years are already being seen as rivalling other hotspots such as Silicon Valley for entrepreneurial potential.
Their manifesto is a fascinating document, not least because political parties have largely dismissed the concerns of new businesses when it comes to developing their economic policies in the past. But with hundreds of thousands of new businesses being set up every year and all net new jobs in the economy created by firms less than five years old, they are unlikely to be ignored in the future.
Not surprisingly, the top priority for digital start-ups is access to funding.
As we all know, entrepreneurs need funding in order to start and grow their businesses and, as various reports have shown, this has been in short supply in recent years.
One of the key recommendations is for all political parties to commit to keeping the enterprise investment schemes that currently offer significant tax benefits to attract investors in early stage businesses. In particular, the seed investment scheme, introduced in 2012, has been enormously successful, helping to bring in over £135 million in investment for over 1600 UK businesses.
There is also a call for larger firms to be given tax reliefs to invest in smaller firms. Whilst this is the norm in the USA, it has never taken off here in the UK. Given that there is an estimated £440 billion sitting on the balance sheets of our biggest businesses, means a real opportunity is being lost to support new exciting opportunities emerging from the start-up scene.
Another key issue for fast growing start-ups is access to talent, as skilled developers, engineers and designers are the lifeblood which ensure that such businesses are not only set up, but are able to scale up effectively.
One area that needs urgent reform is that which relates to post-study work visas for science, technology and engineering graduates. Current restrictions means that fewer non-EU students can stay in this country to either start-up their new businesses or to work for such ventures. According to the report, the number of overseas students studying computer science has fallen by 38 per cent since 2010 and with many skills shortages expected in the IT sector over the next few years, there is a danger that the UK will simply not have the people to take advantage of the opportunities in the market-place.
But it is not only overseas talent that is important and it is critical that more is done to support skills development across the UK itself. This includes making serious investments in schools to deliver computing science at all age groups, as well as supporting initiatives such as code clubs for those looking to learn new skills.
It is also important that the UK Government, whatever its political colours in May next year, continues to support investment in the infrastructure that is vital to ensuring that we continue to grow as a digital economy.
Too often, the UK has been behind the curve when it comes to providing the type of infrastructure that is needed and it is important that a longer-term view is adopted that specifically takes into account the needs of digital businesses rather than the potential suppliers of such services.
Civil servants and politicians are not the font of all wisdom when it comes to economic matters and I hope this manifesto will be the first of many from the private sector. Certainly, we need to have more involvement by entrepreneurs in determining the type of policies that can make a real difference to the UK economy and that interventions are developed that actually have a positive effect on the growth of the business community.