Concern over ‘lost generation’ of entrepreneurs
The study raises concerns over the next generation of successful company leaders
Small business owners who were on track to scale-up and become major firms are experiencing burnout and many are ready to quit entrepreneurship altogether, according to new research.
Now there are concerns that a whole generation of entrepreneurs could be lost because of the disruption to the economy caused by the pandemic and Brexit uncertainty.
The findings, by a team led by the University of Edinburgh Business School, emerged during conversations with 130 high-growth entrepreneurs across the UK. They were asked about their wellbeing and that of their employees.
In a new report, the academics point out that as wellbeing drops within an organisation, so does productivity and creativity, while absenteeism will increase. Poor wellbeing makes it harder for firms to react to changes in the market and carry out important innovation and business development activities.
The ERICC (Entrepreneurial Resilience and Innovation during the Covid-19 Crisis) research project brings together experts from 5 British universities. This research is funded by the Economic and Social Research Council (ESRC), as part of UK Research and Innovation’s rapid response to Covid-19.
The study is based on in-depth interviews with founders in regions across the UK in sectors such as digital technology, advanced manufacturing, low-carbon, and business services. The key characteristic unifying these firms is the entrepreneurs’ ambitions and desire to build a world-beating product or service.
Dr Ben Spigel, senior lecturer in entrepreneurship at the University of Edinburgh Business School, said: “The ongoing economic uncertainty is leading to burnout, risking a lost generation of entrepreneurs.
“To work so hard and have everything you have built undone by something totally out of your control is hugely damaging. A large number of people we’ve talked with said that if their current firm fails they won’t return to entrepreneurship.
“The one thing entrepreneurs should do to improve their wellbeing is talk with other entrepreneurs. They’re all facing the same types of challenges and knowing that others are facing similar challenges helped the entrepreneurs we spoke with think about their situation differently.
“Governments should be looking to provide as much certainty as possible when it comes to how entrepreneurs can help their employees.
“The furlough scheme was praised by everyone we talked to because it allowed entrepreneurs to avoid the horrible task of laying off people in a depression.
“Now they need to support entrepreneurs by helping them secure their workspaces for when employees return and provide clear guidance on when and in what capacity people can get back together to work and talk.”
One positive discovery from the study was that many entrepreneurs expressed relief at the reduced need for strenuous business travel to meet with customers and investors or to attend trade shows.
While this has made it harder to identify new customers and to keep abreast of new developments it also means entrepreneurs spend less time away from their homes and family and less time commuting.