Encouraging enterprise : Britain's Graduate Enterprise Programme

ENCOURAGING ENTERPRISE: BRITAIN'S GRADUATE ENTERPRISE PROGRAM Britain may well have been the cradle of the Industrial Revolution in the nineteenth century, but British industry can hardly be accused of continuing this domination in the twentieth century, least of all in the post-World War II "information technology" revolution when Britain's position in the Organization for Economic Cooperation and Development (OECD) League Growth Table of 24 nations has slipped from second to eighteenth. The university business schools (founded first in London and Manchester in 1966 and expanding thereafter) can scarcely be held responsible for this relative decline, but perhaps because too much was initially expected from them or because of British industry's apparent continuing reluctance to undertake training and management education, the schools themselves have been continuously criticized as being too academic. (1) Far from being too "remote" in the second decade of their existence, at least, thanks to generous support from the government's training arm, the Training Agency (TA), all of the British business schools and polytechnics have been helping individuals and companies alike in the most difficult industrial area of all--start-ups and early growth. The success and range of such enterprise and small business programs have been widely commented upon by Birley (1985) and Vesper (1985) (who has also looked at U.S. activity), among others. A more recent offspring of this exciting educational and business development has been the Graduate Enterprise Program (GEP), again a Training-Agency-sponsored initiative, aided by private sector sponsorship from British Petroleum (BP), National Westminster Bank, Arthur Andersen, and the British Institute of Management, the purpose of which is to assist first-time graduates with business ideas to start their own businesses. Initiated in Scotland in 1983, the GEP was developed and launched in England in 1984. Starting in 1988, nonetheless, with national unemployment beginning to decline, this training initiative has come into question both from within government (questioning the high cost per participant for the program while measuring success only in terms of immediate new job creation), and from without (from academicians, e.g., David Storey (1987), who has claimed "that it has never been shown that the net effect of subsidizing small firms is to create more wealth in the community"). This study will attempt to evaluate the first three years of the English GEP (GEP 1, 2.3 from 1985 to 1987) experience to date by: 1. Describing the program concept and design, with flaws and successes; 2. Reviewing the program impact on student entrepreneurship; 3. Outlining the business outcomes of GEP at Cranfield. PROGRAM CONCEPT AND DESIGN The GEP program(2) owed its origin to government concern that United Kingdom (U.K.) college graduates were less interested in self-employment and small business than, for example, careers in accounting (nearly 10 percent of U.K. graduates in 1983 opted for accountancy compared with 0.3 percent for self-employment) (Careers Service Destination Survey 1983) and were less enterprising than equivalent graduates, for example, in the U.S.A. and Japan (where between 2 and 2.5 percent start their own business). (3) There was also concern with graduate unemployment, which was running at over 10 percent in the depressed employment climate of the early 1980s, and with large firms reducing their graduate intake. The average age of graduates in the first three English programs was 24, with a median age of 23. Most studies of entrepreneurship and new business creation consider the early thirties to be the more common age for launching new ventures (Birley 1989). Contrary to this, in a recent study, Dr. Christine Shaw noted that English "founders of firms in the nineteenth century, typically attained their first responsible position in their 20's or earlier (66 percent of sample). …