Tech founders are turning away from the Tories, and into Labour’s open arms
With an MBA from Stanford and a self-professed fondness for all things tech, you’d be forgiven for assuming that the country’s entrepreneurs would have taken a natural shine to Rishi Sunak and the party he leads. Yet, according to a recent report from The Entrepreneurs Network and Mishcon de Reya that could hardly be further from the truth.
When we asked entrepreneurs whether they thought that politicians from each of the main political parties understand what their businesses need to succeed, the results made for grim reading for Conservative eyes. Just 35 percent thought Tory politicians know what their businesses require, compared to 37 percent who did not – giving a ‘net agreement’ figure of negative two percent.
To put this into context, this is the same figure that was scored by Green Party politicians; seven percentage points worse than the Liberal Democrats (+5); and a full 19 percentage points behind Labour (+17). Only politicians from the SNP (-3) fared worse among the parties we polled.
“So what?”, you might ask – and, to tell the truth, you’d be right. Almost by definition, entrepreneurs will only ever make up a sliver of the electorate. A general election is not going to be won or lost on the basis of who best appeals to them. However, what should not be overlooked is how critical entrepreneurs can be to delivering on other objectives – which very much will matter to the population at large when it comes to polling day.
Startups founded by entrepreneurs keep the economy on its toes, bringing forth original and innovative goods and services, and preventing incumbents from abusing their market position. Evidence suggests they are responsible for creating a disproportionate amount of new jobs, and are important drivers of productivity growth (also known as: the only thing that will make us meaningfully richer in the long-term). In the fields of life sciences, artificial intelligence, green tech and so on, entrepreneurship will be what solves pressing social challenges – from diseases to climate change – and improves public sector efficiency. All of these things relate closely to issues voters care about deeply, and despite all parties making more of an effort on policies to appeal to startup founders, our polling suggests more needs to be done.
The next question then becomes more about how the government can best help entrepreneurs overcome the main challenges they’re contending with. Naturally, therefore, we also asked our sample of founders what these are.
By far and away, and perhaps unsurprisingly, the “difficult economic climate” was raised by entrepreneurs as the most common risk they’re facing. After this came supply chain disruptions, and then Britain’s unfavourable tax regime. (We also found that these were precisely the same challenges founders expect to be battling a year from now.)
It’s not within the gift of a single Prime Minister to turn around this state of affairs, let alone one who hasn’t even been in the job for a full year. Economic headwinds such as weak investment and high inflation are significantly influenced by global factors beyond Sunak’s control. But at the same time, that’s not to say there isn’t anything he couldn’t do at the margin to help.
Entrepreneurs thinking about their futures will have a hopeful eye on the upcoming Autumn Statement, for instance, even if the mood music coming out of the Treasury doesn’t exactly give reason for optimism. While sweeping tax reforms are off the table, at least hinting that a more positive direction of travel is on its way could reassure more founders to stick with, or relocate to, the UK.
It’ll be news to nobody that the Tories are languishing in the polls. But what our own survey confirms is that, beyond the general public, they’re also failing to impress precisely the sorts of people the Conservatives once prided themselves on representing. If Sunak is to see a political recovery in the next 12 months, he needs to see an economic recovery too. Wealth-generating, job-creating, innovation-providing entrepreneurs will sit at the heart of that, and he should be listening intently to what they have to say – however hard it might be to hear it.