Why the Welsh government needs to adopt a truly inclusive entrepreneurship policy

When the Wales Entrepreneurship Action Plan was launched in 1999, it was the world’s first regional business strategy.

While focusing on implementing a range of programs to develop a corporate culture, increase the number of new businesses and support growing businesses, he also focused specifically on increasing participation. entrepreneurship of under-represented and disadvantaged groups such as the elderly, women, ethnic groups, minorities and young people. This is not surprising, as research has shown that the people who typically start a business are Caucasian, male, and between the ages of 30 and 49.

Fast forward two decades and the integration of business support here in Wales means that there is little help available to help increase entrepreneurial activity within these groups.

However, as a recent OECD study demonstrated, not only is this focus necessary to improve participation in business start-ups by these groups, but government support during the Covid pandemic may not have been successful. be not taken into account the challenges they face in accessing such help. In fact, one of the main criticisms of UK and Welsh government support was the lack of support for certain types of freelancers and micro, news and start-ups.

More importantly, “The Missing Entrepreneurs 2021” report suggests that adopting more inclusive entrepreneurship policies can help economies “build back better” by maximizing entrepreneurial potential among different under-represented groups.

This includes reducing disincentives to starting a business in regulatory and social protection institutions, facilitating access to finance, and building entrepreneurial skills through training, coaching and mentoring. . Emphasis should also be placed on strengthening the entrepreneurial culture and networks for these groups and on the coordination of strategies and actions for inclusive entrepreneurship.

For example, it has been estimated that 50% more people could be engaged in entrepreneurship if everyone were as active as the core group of men aged 30-49, with three quarters of these ‘missing’ entrepreneurs. being women, half are over 50 and one in eight is under 30. This could mean that an additional 10,000 new businesses would be created in Wales each year if other groups were supported.

However, this does not happen due to a series of interrelated factors, including greater difficulties in accessing finance, skills gaps, underdeveloped networks and institutional barriers such as a lack of childcare or discouraging social attitudes. For example, stereotypes and prejudices remain for people with disabilities in the workforce and income support for this group could be reduced or removed if they start a business.

In terms of access to finance, there remain unconscious investor biases that may result in women entrepreneurs receiving lower amounts of venture capital, while young people have lower levels of savings and collateral, which may result in women entrepreneurs receiving lower amounts of venture capital. makes access to external debt financing more difficult. People over 50 are less likely to have digital skills, while language challenges can prevent immigrant entrepreneurs from networking in their new business community.

It should also be noted that some of these under-represented groups have been hit hard by the Covid 19 pandemic and yet little focus has been placed on providing them additional support in any recovery plan. For example, women entrepreneurs have been disproportionately affected in 2020 and 2021, not only because their ownership is concentrated in the hardest-hit sectors, but because of demands due to increased household responsibilities as a result of the pandemic. Yet the UK or the Welsh governments have little appreciated this in their economic responses to the pandemic.

However, it is not too late to change this and there is a real opportunity for the Welsh government to adopt a truly inclusive entrepreneurship policy that would support anyone with a business idea, regardless of their background.

This could be done by offering tailor-made support to those groups who are finally tackling the prejudices within the current entrepreneurial ecosystem against the needs of diverse groups of entrepreneurs.

For example, it could increase funding for startups through its subsidiary, the Development Bank of Wales, notably by providing microfinance products that are in demand by those who face barriers in traditional financial markets, such as than women, young people and immigrants.

Along with the funding available for new businesses, Business Wales could also develop a range of tailor-made programs for different groups, especially as research shows that targeted support programs have higher participation rates, satisfaction levels higher and more positive results than general support programs. Therefore, this more targeted approach to funding, training, coaching and networking interventions could provide a solution to stimulate the entrepreneurial activity of disadvantaged groups.

We all know that new businesses create jobs, spur innovation, act as a catalyst for market disruption and are essential for the development of sustainable local economies. However, the challenge is to ensure that anyone wishing to start a business, regardless of their age, gender or place of birth, has full support to do so.

Certainly, if Wales is to become a more inclusive economy and society, then the focus needs to be on strengthening the participation in entrepreneurship of groups which are currently under-represented and who need specific support to take the first step towards starting their own business.

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