SMITH & WILLIAMSON ENTERPRISE INDEX
Confidence holding steady among UK entrepreneurs
Guy Rigby considers what the latest Smith & Williamson Enterprise Index results tell us about the entrepreneurial engine of UK economic growth.
The Smith & Williamson Enterprise Index measures entrepreneurial confidence in the economy. Now in its second year, the initial benchmark was set at 100.
During 2014, our Enterprise Index respondents have maintained a higher level of confidence than they felt through 2013. The Index has remained in the 105- 109 range, with a closing reading of 106.2 in the third quarter of 2014. This shows a reassuringly steady level of confidence despite the Bank of England signalling that interest rates could start to rise later this year.
Mandatory living wage and boardroom quotas unwelcome
One of this quarter's questions considered the introduction of a mandatory living wage, based on the amount an individual would need to earn to cover basic living costs. Over half of respondents believe that the introduction of a mandatory living wage would adversely affect small businesses. However, arguments in favour suggest that this would help to increase the motivation, attendance and output of employees, who would spend more buying local goods and services.
The Index also found that the majority of respondents (62%) felt that the introduction of mandatory quotas to increase the number of women in boardrooms isn't the best way forward, with 18% remaining 'on the fence' about the issue. This reinforces a growing consensus that mandatory quotas would be counter-productive, undermining the perceived competence of women in relation to future board roles.
Empowering individuals as entrepreneurs
Somewhat surprisingly, half of the Index respondents felt that the emergence of the 'Sharing Economy', evidenced by the significant increase in peer-to-peer platforms and collaborative consumption, will have an adverse effect on their businesses. More positively, however, over 70% of respondents indicated that they expect their export turnover to increase in 2014. John Longworth, Director General of the British Chamber of Commerce believes that "we need to transform the domestic mindset of those businesses by creating an environment that makes it worthwhile for them to export".
A vote for the EU
Over 60% of respondents believe that the UK is better off inside the EU. Mark Hindmarsh of Versatile Connections, said "the EU is the UK's main trading partner worth more than £400bn a year... Staying in the EU means the UK is more likely to be in a position to win new trade deals as opposed to being an independent, outside EU player". The contrary view is that the UK and the EU would remain key trading partners...