Business opportunities are like buses…
“Business opportunities are like buses, there’s always another one coming,” said Sir Richard Branson. But entrepreneurship in Wales has received little attention over recent years: the emphasis has been on using resources to attract inward investors – large companies with the capability of employing a vast amount of people at one time.
Yet small businesses create the majority of new jobs – 64 per cent of the 2.5 million new jobs created in the U.S. in the boom of the late 1990s were in small firms. And throughout the 1980s, America’s top 500 companies shed more than five million jobs while the US as a whole added 34 million new jobs. Most of these came, of course, from small businesses.
These statistics are very impressive, but when compared with such statistics for Wales we can see that small businesses are even more important for jobs. For instance, 97 per cent of all businesses in Wales employ less than 20 people, and 94 per cent employ less than 10.
And small businesses account for nearly 50 per cent of employment outside the public sector. Also, it has been estimated that as much as one-third of the differences in national economic growth are due to differences in entrepreneurial activity. It follows logically from this that small businesses and their ability to create such wealth and employment should be given more importance.
But in Wales, business risk-taking has been ranked alongside gambling. If it succeeds, fine: but failures are not the subject of polite conversation. This puts many of us off starting our own ventures, due to the stigma we have to live with if we get things wrong.
In America, the situation is so very different. As many as nine out of every 100 US adults are right now trying to start businesses of their own. This is because of a culture that strongly encourages and supports self-enterprise.
Americans generally favour self-starters and the independent spirit that underpins their success. Business failures are not considered a personal failure and many consider ‘not to have tried’ as a personal weakness. Successful entrepreneurs are not only accepted, but are considered ‘champions of industry’ and presented as role models for others.
Americans accept and respect entrepreneurs: some business failures are expected and they are considered a normal part of the process. It is also interesting to note that US women are responsible for more than a third of all start-up efforts.
But more fundamentally, the American population generally do not expect the government to provide for their well-being. Also, they are likely to accept differences in standards of living. Within that fundamental cultural tradition, Americans are more likely than people in other countries to recognise opportunities for start-ups and to be motivated to pursue those opportunities through the creation of a new venture.
The Americans realise that while not every high school graduate has the capacity or desire for higher education, almost everybody has the potential to start a new business. The average high school graduate may not start a fast-growth, high-technology company, but he or she can start a landscaping business, a retail business or some other venture that will employ other people and contribute to economic adaptation.
As such, they realise that it is critical to provide at least the basic instruction to ensure that these future entrepreneurs have the understanding of and a certain level of proficiency in the skills necessary to implement and manage a business.
In Wales we need begin respecting wealth creators in the same way as the US. True entrepreneurs have one thing in common: they are willing to bet money, time and commitment in the belief that they can create new wealth out of risk. It is high time we started looking at this as a creative activity in its own right, and not some sort of anti-social behaviour.