Why the government's latest scheme to encourage start-ups will lead to generation of failed entrepreneurs...

The current government seems to have a somewhat lopsided approach to encouraging entrepreneurship – while making speeches about how much they admire and how much they want to support people to set up their own businesses, legislation and policies are passed that make it harder for small businesses to be able to afford to employ people, for local authorities to be able to offer rate relief, and tax regimes that favour large international corporations over local enterprises...

 

But its their latest initiative that perhaps gives me cause to be most concerned – not because it affects 'us' (people currently setting up new enterprises), but our children: the next generation of entrepreneurs...

As a parent, I'm constantly trying to make sure my boys are best equipped to get on in the world, and develop resilience to be able to deal with the inevitable adversity and set-backs that we all face. Part of this is about appreciating the true value of money, and the need to earn it. But the governments' latest scheme is to offer primary school children 'loans' of £5 to set up their own businesses as a means to help them learn about being an entrepreneur – all well and admirable on the face of it, as it will offer some children an opportunity they might not otherwise have enjoyed, but there are 2 key issues with this that make me upset:

1)      in the 1980's, there was a short-lived scheme that gave unemployed people small grants to set up their own businesses as a means to move out of unemployment: 30 years on, and this government policy has so impacted the collective consciousness that most people I meet who are thinking of setting up their own enterprise expect that they're automatically entitled to such a hand-out without having to do anything to merit it – if this is the legacy of a scheme targeting unemployed adults, then this £5 'loan' will surely engender at least the next generation of entrepreneurs to expect that there'll always be government cash to help them out and so become less resilient...

2)      what about all the work of encouraging entrepreneurship amongst school children of all ages that already takes place through national bodies such as Young Enterprise and Live Unltd? Their approaches seem to work very well without the need to be offering 'financial incentives' to participants, and are based on developing long-term supportive relationships – much more beneficial to any enterprise than a quick cash hand-out...

 

If government really is serious about encouraging entrepreneurship amongst children, then it needs to make some more informed choices about how it does this: investing in existing, proven national programmes rather than wasting money on new schemes and managing them would be a good start; teaching financial literacy from an earlier age would be good too – I can't tell you how much I despair when start-ups I'm walking alongside deliberately avoid wanting to understand how the money in their enterprise is working and as a result, many I haven't been able to 'win over' have subsequently gone bankrupt, racking up greater personal debt and making people unemployed, and yet could easily have been prevented but for their being more comfortable with some basic financial literacy...

So – the government’s latest great idea to stimulate and encourage business growth and entrepreneurship seems to not only be doomed to fail (like so many before it), but will so do in such a way that it'll drag down the next generation and limit the future potential of our children.