Essay for Five Critical Essays on Growth, Future Cities Project, September 2026, edited by Austin Williams
2,577 words, excluding footnotes
Citation
Macdonald, N. (2026) ‘Growth needs entrepreneurs’, in Williams, A. (ed.) Five Critical Essays on Growth. London: TRG Publishing, pp. 33–38. Available at: https://futurecities.org.uk/publications-2/
Notes
Includes original text cut for length, including text in Britain: a nation of entrepreneurs and other text.
Introduction
‘I will back our scientists, technologists, entrepreneurs and creatives – as I have done here’, claimed anointed UK Prime Minister Andy Burnham in a speech at Manchester’s People’s History Museum in June 2026 (Burnham, 20261). It is a promising line, not least because entrepreneurship is under-appreciated in British political discourse.
In fact, the British elites never quite accepted the manufacturing and industry which grew from entrepreneurship, always looking back to the craftsman and the mercantilist, or further to the honest peasant and yeoman farmer. The “new money”, the brass, was earned from “muck”, and they disapproved. Today’s elites come from the “new class” of professional managers, in the public, private and non-governmental sectors, mucking in with the old professions, and the First and Fourth estates. They recoil from any work not focused on “symbolic analysis” or manipulating words. Though they like to be identified with things artisanal and hand-crafted, they recoil from the scale and ambition for which entrepreneurship aims.
Not one minister in now Prime Minister Burnham’s cabinet has started or run a business. Even in the cabinet of the defenestrated Labour leader Keir Starmer, only one member had ever run a business, then Secretary of State for Science, Innovation and Technology Peter Kyle. None had been involved in manufacturing.
Nevertheless, as the UK-based Entrepreneurs Network found in a 2026 survey conducted in partnership with Public First, entrepreneurs ‘play a disproportionately important role in our economy’ (Public First, 20262). The survey also revealed that ‘nearly three fifths of founders are optimistic about the year ahead for their own business’
Britain: a nation of entrepreneurs
And Britain, after all, has a strong claim to have invented the modern entrepreneurial economy.
In his book Dragons: Ten Entrepreneurs Who Built Britain, former Chief Secretary to the Treasury under Gordon Brown, Liam Byrne MP, cites an amazing cast of characters, epitomising the historic “can-do” attitude of British entrepreneurs (Byrne, 20163), including seventeenth-century ‘Atlanticist, colonialist, pirate’, Robert Rich; and East India entrepreneur Sir Thomas ‘Diamond’ Pitt.
He describes eighteenth-century Birmingham industrialist, business partner of steam engineer and inventor James Watt, and ‘Lunar Man’, Matthew Boulton; and Frankfurt-born banker, businessman and financier Nathan Mayer Rothschild.
In the late Georgian and Victorian nineteenth-century, Byrne notes Scottish-born physician, free trader, opium dealer and ‘first Taipan of China’, William Jardine; ‘Britain’s Railway King’, George Hudson; businessman, chocolate manufacturer and revolutionary in ethical enterprise, George Cadbury; the entrepreneur-imperialist Cecil Rhodes; and soap manufacturer, industrial and social reformer and philanthropist, William Lever.
And in the twentieth-century, he profiles department store and retail innovator John Spedan Lewis, who also pioneered employee mutualism.
Byrne could have included seventeenth-century entrepreneur Sir Hugh Myddelton who created the New River Company to bring fresh water to a thirsty City of London, embodying state support for entrepreneurship in being backed by James I. Or Eleanor Coade’s whose eighteenth-century artificial stone works supplied monument- and house-builders.
In the nineteenth-century, locomotive manufacturers and railway engineers George and Robert Stephenson helped transform the United Kingdom, and then the modern world; US-born Henry Wellcome invented modern pharmaceuticals in London, while Nottingham-based Jesse Boot built the “Chemists to the Nation”. And in Leeds, with his brother-in-law, Simon Marks built-up Marks and Spencer from a homewares and everyday goods vendor.
In the early twentieth-century Charles Rolls and Henry Royce built a luxury motor manufacturer while, post-War, Jewish refugee Dame Stephanie Shirley’s Freelance Programmers startup pioneered software engineering.
In our twenty-first century one can point to entrepreneurs in old and new industries and sectors, including Anthony Bamford in industrial manufacturing and heavy equipment (JCB); Richard Branson in diverse industries; James Dyson in home appliances (Dyson); Hermann Hauser in computing (ARM); beer creator Karan Bilimoria (Cobra Beer); in hospitality, Luke Johnson (Pizza Express to Gail’s) and Simon Woodroffe (YO! Sushi and Yotel); Martha Lane Fox and Brent Hoberman in online travel (Lastminute.com); Dan and Sam Houser et al in digital gaming (Rockstar Games); in personal finance Tom Blomfield (Monzo), and Käärmann and Taavet Hinrikus (Wise); Richard Moross in bespoke printing (MOO.com); Antony and Richard Joseph in homewares and kitchen products (Joseph Joseph); or Demis Hassabis in machine learning (DeepMind).
Necessary, not sufficient
Entrepreneurship is at the root of almost every activity which produces economic growth. It was the seed of almost every commercial organisation, growing from an entrepreneurial startup. Startups are a product of what economist John Maynard Keynes called “animal spirits” (Keynes, 19364), a human drive to make a difference.
According to Harvard Business School professor Howard H. Stevenson, ‘Entrepreneurship is the pursuit of opportunity beyond resources controlled’. It is a pursuit of a desirable future. It is risk-taking. It represents a belief in one’s ability to problem-solve in order to realise an opportunity.
Of course, not all startups succeed, and while being entrepreneurial is necessary to sow the seeds of growth, it is not sufficient. There are many impediments to such growth: economic, political, and social. Not every startup becomes a business that matters. On its own, entrepreneurship is not sufficient to create sustained growth. But it is necessary.
Agency and liberation
Entrepreneurship is also the modern form of human agency, a way for people to act on the world, to express themselves, to make an impact – or to change it. In the past, this desire to “self-actualise”, to try to realise one’s potential, may have been realised through political activism, forming a music group, or starting a publication. In our victim-centred age, self-actualisation is an increasingly radical act.
Over the last few decades, entrepreneurship has become a key vehicle for agency, and entrepreneurs occupy the cultural space once held by writers, musicians, actors, and even politicians. And these figures express this clearly.
My ambition is to ‘make the world better’, as Google co-founder Larry Page puts it (Acquired, 2026^5), while Apple co-founder Steve Jobs memorably claimed the company’s goal was to ‘make a dent in the universe’ (Jobs, 19835). YO! Sushi founder Simon Woodroffe talks of a low point in his life that ended with challenge himself to a five-mile run through Hyde Park. He concluded that, ‘if I can do that, I can do anything’ (Saturday Live, 20266).
The value of entrepreneurship – at least a source of income and wealth creation one can better control – is even greater in an era of increasingly insecure formal employment. Not least for recent graduates, who compete for increasingly scarce internships and graduate jobs, vacancies for which, according to one graduate employment portal, have fallen to a sixth of their 2017 level (BBC News, 20267).
Entrepreneurship can also be a viable alternative for those who may fall into the new precariat class made up of “gig economy” workers, people on Zero Hours contracts, and those hired via staffing platforms typified by Indeed and Temper.
Unlike much conventional employment, entrepreneurship is not subject to the Anglosphere’s “cult of youth”, or the lower cost of employing younger people, which push and price older employees out of the market.
More generally, there is a pervasive ennui across both commercial, governmental and ‘third sector organisations, and a growing fracture between their stated visions and the reality of working in increasingly political and socially instrumental organisations.
The challenges formally addressed by the latter are being taken up by ‘social entrepreneurs’, which uses the business models and approaches of entrepreneurship to address societal problems, some a product of lack of state capacity. Increasingly, social entrepreneurship is challenging charities and NGOs, many of which have become bloated and sclerotic.
As such, both entrepreneurship and social entrepreneurship offer a ‘third way’, a route to meaningful and effective activity and external transformation – problem-solving and growth – outside existing frameworks.
Two decades of economic stasis
The British economy has been stagnant for two decades now, since the 2008 financial crisis, and the Burnham government has rightly put growth at the centre of its programme – though it does so by looking backwards, to the ‘four decades of neoliberalism’ that, without nuance, it blames for hollowing out Britain’s industrial towns.
In the two decades of the UK economy “bumping along the bottom”, as economist Phil Mullan characterised it as far back as 2016 (Mullan, 20168), it appears that innovation realised by entrepreneurs, and globalisation, more than government – which has often had a retrogressive effect – has been the primary driver in improving people’s lives. Though government and political leadership ought to create an environment for growth, it is harder today to disagree with Steve Jobs’ stark claim from 1983, ‘I’m one of those people that think Thomas Edison and the light bulb changed the world more than Karl Marx ever did’.
Over those decades, many UK businesses and corporations have been kept artificially alive as “zombie companies”, propped up by state subsidy, regulated protected markets, state-enabled rent-seeking, or just considered “too big to fail”. Classically, the free market’s drive to “creative destruction” (Schumpeter, 19429), characterised over a century ago by Austrian economist Joseph Schumpeter, would free up the people, capital goods, resources and investment which new businesses need to grow. However, in the right conditions, and for some organisations, an entrepreneurial approach could also be turned inward – as intrapreneurship – dynamising those organisations from within and saving them from their Schumpeterian fate.
Entrepreneurship in the age of AI
Entrepreneurship is also key to creating new sectors and industries, not least those made possible by “general purpose technologies” (GPTs), discoveries and developments – such as steam power, electrification, and plastics – which can be used to transform many areas of economic and societal activity. The category of GPTs, formalised by Elhanan Helpman (Helpman, 199810), and by Timothy F. Bresnahan and Manuel Trajtenberg (Bresnahan and Trajtenberg, 199511), building on the work of late nineteenth century economist Alfred Marshall (Marshall, 189012), also encompasses information and communication technologies, key to the last half-century of growth in the West. And, of course, most recently it characterises machine learning, or ‘artificial intelligence’ as it has become known.
As well as entrepreneurs’ role in realising the potential of this new GPT, entrepreneurship is one of the few activities that is enhanced, rather than threatened, by artificial intelligence. This has driven the rise of the “solopreneur”, a category the Centre for Policy Studies suggests the UK government is significantly undercounting in the UK economy. As former director of the centre-right UK think tank, Robert Colvile, put it in The Times, ‘if there is an AI-driven boom in micro-entrepreneurs, setting up as sole traders from their bedrooms, it will be happening in precisely this official blind spot’ (Colvile, 202613). Colvile cites George Mason University economist Tyler Cowen, who argues that the future will be shaped by what he calls “AI maniacs”, which Colville summarises as ‘bright, awkward people who dive headfirst into the technology and end up inventing, destroying or transforming entire industries by accident’.
“I’m from the Government, and I’m here to help”
President Reagan’s line about the nine most terrifying words in the English language remains the right frame here (Reagan, 198614). In a Public First study for The Entrepreneurs Network, cited earlier, 60% of respondents agreed that ‘taxation levels are punitive and actively discourage people from wanting to earn more themselves’.
The regulatory burden on startups is real and cumulative, and has increased further under the Labour administration elected in 2024, with the cost of employment driven up by higher Employers’ National Insurance rates, and with a substantially increased Minimum Wage. Labour also passed the 2025 Employment Rights Act, which introduces Statutory Sick Pay and Family Leave (after childbirth) from day one, and many other constraints and costs.
Moreover, recruitment for startups and growing “scale-ups” is further constrained by Right to Work checks, health and safety risk assessment, the requirement for workplace pensions, opaque structuring of holiday entitlement pay, and the onerous quarterly reporting required by HMRC’s recent Making Tax Digital programme.
Given how globalised the talent pool for startups has become, these “red tape and taxation” challenges are exacerbated. And the talent pool is now shallower as a result of the implementation of Brexit, rises in the minimum salary threshold for Skilled Worker visas, and an increase in the Immigration Skills Charge.
On the positive side of the government ledger are the Scale-up Visa, the Global Talent Visa framework, and the Graduate Route, as well as the investment-encouraging Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS), both dating to 1994, and R&D Tax Credits scheme, introduced in 2000.
Can government agencies actually help?
HM Government sponsors Innovate UK, under the lugubrious UK Research and Innovation (UKRI), bunkered in Swindon, to “back the nation’s most promising deep tech businesses in the UK’s priority sectors”.
However, historically the agency has tended to act as a state support for established – some perhaps “zombified” – companies. As all modern bureaucracies do, it lacks the confidence to defend its expertise and judgement, and seeks to create a “level playing field”.
Nevertheless, Innovate UK finds ways to favour what is considers to be reliable – but often not innovative – partners to fund, and to fund repeatedly to reduce risk. It is also liable to manipulation by smart startups which secure multiple rounds of funding without ever testing the market with a commercial product or service.
And, of course, Innovate UK has drunk the “Kool-Aid” of sustainability, the circular economy, and climate change. It requires startups it supports to limit their ambitions for fear of “impacting the planet”. Yet not one of these political narratives has been endorsed by UK voters, and they are inimical to the growth they want and need to see.
Instead, it should adopt a model where funding is based on ‘getting out there’ to see who is doing viable work in entrepreneurship and allow more discretion in how funding is granted and managed. And, of course, should drop the “sustainababble” and adopt a human-centred view of growth and the future.
Whither Labour
Though the Burnham administration talks a good talk about “good growth in every postcode”, there is a flaw at the heart of its ideology. The modern Labour Party represents a class of professionals, managers, state bureaucrats and employees, and all of those who administer the state, or benefit from its tax and revenue-raising powers and its financial largesse. This “new class” sees business – and entrepreneurs – as a competing class, to be dominated and exploited for revenue.
Having, in opposition, supported an “earlier, harder and longer” Lockdown of business and citizens, the first Labour administration, led by Keir Starmer, increased the legal and employment costs of doing business, raised costs with energy policies, and regulated business in all sorts of ways. Then it gave them money back, ensuring that the state – more than the customer – is the patron of business. The Burnham administration looks set to continue this approach, for instance with the hospitality industry. This is about state control, not enabling growth.
As such, it may be the ideology of a successor government to Labour’s – Reform or otherwise – which is truly able to unlock the potential of Entrepreneurship.
Conclusion
Entrepreneurship is a necessary but not sufficient element of growth. And despite the fetish for “the new new thing”, not everything called entrepreneurship is such. Beyond facilitating – or not impeding – startups, UK government should be considering how startups become scale-ups, then mature companies, internationalise and acquire other companies. The latter challenge is one of the most commented on in the study of the economics of post-War business and is as much a function of the ambition, culture and political leadership of the United Kingdom as of specific factors.
Entrepreneurship is one of the keys to growth, of job creation, and of the self-actualisation of individuals. These growing trends should be harnessed for growth. And those who want to see growth should be entrepreneurial about how they proceed.
Nico Macdonald, adjunct professor in Entrepreneurship Studies and convenor of BIG POTATOES: The London Manifesto for Innovation
References
- Burnham, A. (2026) Speech at the People’s History Museum, Manchester, 29 June. ↩︎
- Public First (2026) Survey for The Entrepreneurs Network, May–June. ↩︎
- Byrne, L. (2016) Dragons: Ten Entrepreneurs Who Built Britain. London: Head of Zeus. ↩︎
- Keynes, J.M. (1936) The General Theory of Employment, Interest and Money. London: Macmillan. ↩︎
- Jobs, S. (1983) Talk given at the International Design Conference, Aspen. ↩︎
- Saturday Live (2026) ‘Danny Robins, Sushi, Family Secrets, and the Inheritance Tracks of Nat Sciver-Brunt’ (includes interview with Simon Woodroffe), BBC Radio 4, 13 June. Available at: https://www.bbc.co.uk/programmes/m002xnrh ↩︎
- BBC News (2026) ‘Graduate job vacancies drop by almost 50% in a year, survey suggests’, BBC News, 24 August. Available at: https://www.bbc.co.uk/news/articles/crerd8l3pw5o ↩︎
- Mullan, P. (2016) ‘Economic sloth: stop blaming it on Brexit’, spiked, 24 November. Available at: https://www.spiked-online.com/2016/11/24/economic-sloth-stop-blaming-it-on-brexit/ ↩︎
- Schumpeter, J.A. (1942) Capitalism, Socialism and Democracy. New York: Harper & Brothers. ↩︎
- Helpman, E. (ed.) (1998) General Purpose Technologies and Economic Growth. Cambridge, MA: MIT Press. ↩︎
- Bresnahan, T.F. and Trajtenberg, M. (1995) ‘General purpose technologies “Engines of growth”?’, Journal of Econometrics, 65(1), pp. 83–108. ↩︎
- Marshall, A. (1890) Principles of Economics. London: Macmillan. ↩︎
- Colvile, R. (2026) ‘There’s a business boom that no one seems to have noticed’, The Times, 11 July. Available at: https://www.thetimes.com/comment/columnists/article/theres-a-business-boom-that-no-one-seems-to-have-noticed-677lbjkxz ↩︎
- Reagan, R. (1986) The President’s News Conference, 12 August. Ronald Reagan Presidential Library. Available at: https://www.reaganlibrary.gov/archives/speech/presidents-news-conference-23 ↩︎