Difficulty obtaining finance and a general skills shortage risk undermining Britain’s start-up revolution, the Institute of Directors has warned today.
The first ever survey of the IoD 99 network – a group of more than 650 entrepreneurs under the age of 35, running businesses in every part of the country and every sector of the economy – has confirmed that finding skilled employees and accessing scale-up finance are the most important issues for Britain’s start-ups.
Worryingly, two-fifths (42 per cent) of the entrepreneurs surveyed said they have trouble hiring people with the right skills, and 39 per cent cite difficulty accessing finance as a potential barrier to growth.
More than half (53 per cent) said that money from family members had been instrumental in getting their business off the ground, while 56 per cent had used personal unsecured finance, like credit cards, and a further 45 per cent had used money from friends.
Jimmy McLoughlin, deputy head of policy at the IoD, said: “The start-up revolution has taken hold in Britain like nowhere else in Europe. With so many young, exciting and cutting-edge businesses having popped up in recent years, it is vital to harness their potential and create the next raft of world-leading companies. Finding people with the right skills, and tapping into the right mix of finance will be the biggest factors in achieving scale-up success. For start-ups, overcoming these obstacles can be the difference between success and failure.
“It is a worry, therefore, that so many start-ups struggle to hire skilled employees. The push to teach children digital skills, like programming, at school is part of the long-term solution, but we must remember that start-ups face skills shortages now. Therefore, it is crucial that Britain’s immigration system is as open and easy to navigate as possible.”