UK entrepreneurs should learn how to ‘fail well’ like their US counterparts, says Karen Mills, former Barack Obama Cabinet member

A new FSB podcast, Fintech, Failure and Small Firms, dropping on 21 November, features an in-depth interview with Karen Mills, the leading authority on the economic health and wellbeing of the US’s small businesses, former member of President Obama’s Cabinet and Senior Fellow at Harvard Business School.

In the interview, Mills explores how the UK would do well to develop a culture that better nurtures entrepreneurship and risk-taking through being better at, and less afraid of, failing.

Karen Mills says: “The American Dream is entrepreneurship. It creates access and opportunity. Across the world - and I’ve been told this is true of the UK - this needs nurturing because failure is viewed as a very negative mark to have on you outside of the US. In the US, there’s an ability to ‘fail well’. It's a risky activity. But the more we get this spirit, the more we get the Schumpeter creative destruction. We have more innovation, we have more activity, we have more economic opportunity. That's a good thing.”

Research (GEM) finds in the UK, just under a half of adults saw good opportunities to start a business, but more than half of these would not start a business for fear it might fail.

Adults in the US are consistently less likely to indicate concern over ‘fear of failure’ over the last 25 years, according to the Global Entrepreneurship Monitor. Fear of failure in the UK currently stands at 53 per cent (the highest of all the global comparisons), compared to the US at 45 per cent.

The Federation of Small Businesses is campaigning to create a better environment for start-ups in the UK. This includes protecting would-be entrepreneurs and small business owners from the blanket use of personal guarantees on loans so that they do not have to put their homes on the line. FSB also wants to see a return of an enhanced New Enterprise Allowance – a pot of money to help start-ups, which was abolished in 2022.

FSB Policy Chair Tina McKenzie said: “We have 5.5 million small business owners and self-employed people in the UK – all risk-takers. There’s no doubt, however, that this number could be furthered, which, I agree, in part, needs a cultural shift to reduce a fear of failing which should be addressed through our education system. But, also, crucially, that people with entrepreneurial ideas can have robust financial support available.”

In the FSB podcast, Karen Mills also draws on analysis and insight of the dark days following the 2008-9 recession and continuing through the crisis of the COVID-19 pandemic, charting how fintech has changed, and will continue to change, small business lending and examines the potential for more trade between the UK and the US.

Fintech, Failure and Small Firms, a podcast from FSB, is available to watch and listen to on:

YouTube: https://youtu.be/aq3e-Vt8Wu8?si=fynXNEc9LtVOYsDt

SoundCloud: https://soundcloud.com/user-214500531/the-fsb-podcast-fintech-failure-and-small-firms-featuring-karen-mills

ENDS

Media image of Karen Mills available on request.

NOTES TO EDITORS

1. Karen Mills is a Senior Fellow at the Harvard Business School and a leading authority on US competitiveness, entrepreneurship and innovation. She was a member of President Barack Obama’s Cabinet, serving as the Administrator of the US Small Business Administration from 2009 to 2013. Her perspective as an expert on the economic health and wellbeing of the US’s small businesses is the focus of her influential book Fintech, Small Business & the American Dream: How Technology is Transforming Lending and Shaping a New Era of Small Business Opportunity. The second edition of which has just been published. The book offers groundbreaking analysis and insight from the dark days following the 2008-9 recession and continuing through the crisis of the Covid-19 Pandemic, charting how fintech has changed and will continue to change small business lending.
   https://karengmills.com/
    
2. The Global Entrepreneurship Monitor (GEM) report has been a singular voice in the measurement of attitudes and trends in entrepreneurship since 1999. https://www.gemconsortium.org/

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