The global race for startups
This March, the Global Entrepreneurship Congress in Moscow once more brought together startups, investors and policymakers from all around the world.
Naturally, you look out for how other countries are approaching entrepreneurship. While the UK is busy thinking about its global race against the world, many other countries are focused on winning the race to attract global entrepreneurial talent.
Why does attracting global talent matter?
Attracting global talent is not just a way to tackle the UK's skill shortage. Highly skilled immigrants also drive economic growth and entrepreneurship. A recent study by DueDil and CFE suggested that 'hyper productive' migrant entrepreneurs create one in seven UK companies and show almost twice as high levels of entrepreneurship than UK-born individuals. Among tech startups around London's Silicon Roundabout, up to a quarter were founded by those born outside the UK. Last but not least, migrants bring a strong appetite for risk, which is a key ingredient for successful startup ecosystems and is often said to be lacking in the UK.
How good is the UK at attracting global talent?
The UK is not particularly good at attracting foreign talent. In fact, current immigration policy is one of the main barriers for UK tech startups to grow. A survey across London’s Tech City has shown that skill shortage is stopping more than 77% of startups from scaling; in comparison, only 33% reported access to finance being a major issue. The 'Tier 1 Exceptional Talent Visa', introduced this month, is at least a step in the right direction to channel more talent from the global market into UK firms.
But starting a business in the UK - if you are not British or European- remains difficult. For example, to even be considered for the necessary 'Tier 1 Visa', founders must already have access to at least £50,000 in seed investment. The UK government pledge to cut net migration, supported by 77% of the public, is even further discouraging foreign entrepreneurs from coming to the UK.
Which countries should the UK learn from?
Other countries, such as Chile, have their arms wide open.
The Startup Chile initiative is an impressive attempt by an entrepreneurial state to attract talent by massively stripping down legal barriers for foreign entrepreneurs. Founders, no matter where their startup incorporated, are guaranteed a one year visa, a bank account with $40.000 seed investment and a social security number – all within 24 hours!
Startup Chile received over 10,000 applications last year, with one third coming from entrepreneurs based in Europe. Now even referred to as “Chilicon Valley”, Chile is increasingly becoming an attractive place for innovative startups and investors. According to Nicolas Shea, founder of Startup Chile, the success recipe is simple: “You have to go to the persons who sign the visas”.
In short, countries are increasingly using competitive immigration regimes to attract talent and bolster their national competitiveness. At the moment, the UK hosts leading startup ecosystems such as London. But, partly driven by enlightened immigraton policies for entrepreneurs, other countries are catching up fast.
In the global race for talent, where will the UK finish?
With closed borders, certainly not in pole position.