“There is a middle-class secret to financial education; those who receive it at home get a huge leg-up through the rest of their lives — surely it is the job of state education to level up that deficit?”
Jerome Mayhew, MP for Broadland, Norfolk
Last week, Norfolk MP Jerome Mayhew broke Conservative ranks to criticise the inadequacy of financial education in UK schools. This is an issue which we have addressed on many occasions, carrying out analyses of subjects taken at GCSE and ‘A’ level examination stages. We have frequently asked Ministers for a Financial Awareness GCSE to be introduced, because it is only by a school demonstrating their qualification achievements that the subject will be given proper recognition among teaching staff. These calls have not yet been met with success, but we will keep trying.
Jerome Mayhew, a successful businessman himself, drew out the strong connection between receiving financial education and success in later life, and this is not only true for the individual but also for the country as a whole. How can we expect to foster young entrepreneurs if the majority of young people — 62% according to Mr Mayhew — have no recollection of being taught about finance in school?
Our thought for this week therefore takes a close look at what it takes to be an entrepreneur, and highlights an initiative being taken at King's College, Cambridge in order to encourage young aspirations.
King’s College Entrepreneurship Lab runs a portfolio of activities to equip students with entrepreneurial skills, and it supports those wishing to explore a career path in innovation, entrepreneurship and business. The Lab’s activities cover both commercial and social venturing, with an emphasis on developing sustainable and ethical projects having a positive social and environmental impact.
This year it is extending its activities by introducing an inaugural Entrepreneurship Essay Competition, designed to encourage UK sixth form students to pursue entrepreneurial aspirations and to understand better how to launch an enterprise. They are particularly keen to foster this entrepreneurial spirit among students who might not traditionally consider entering the world of business, and they further hope this competition will encourage more young people, who might not otherwise think about it, to apply to Oxbridge and higher education.
The competition has a strong judging panel for entries: Deborah Meaden, a business leader and TV dragon, Lord Mervyn King, former Governor of the Bank of England, and Gillian Tett, FT columnist and Editor-at-Large of the Financial Times, USA — and Provost-Designate of Kings College.
Students are invited to write their 1,000-word essay on one of the following:
- Many businesses advertise themselves as ethical and sell environmentally-friendly or ethically-sourced goods. However, they often do this at a premium price. To some extent this is due to the higher price of their inputs but often they also enjoy a higher profit. To what extent is it ethical for a business to have excess profits from selling ethical goods?
- Why is learning from failure sometimes more effective than learning from success? Build upon examples of entrepreneurs (in the broad sense of the term) who were able to learn from failure.
- Generative AI technology, built upon Large Language Models such as ChatGPT, has allowed entrepreneurs to operate more efficiently. Discuss the impact of this technology for entrepreneurs and provide examples of how it is being used.
The competition's closing date is 26th September, so please spread the word among as many Year 12/13 students as possible!
There's lots of scope for being a young entrepreneur these days, surrounded as we are with continual and significant societal and technological change and, in terms of the life journey, it makes for more sense to tackle the risks of a new venture when the weight of family responsibilities is (generally) low.
My own entrepreneurial journey didn't start until I was 40, and has been an extraordinary experience. I learnt at an early stage that it is indeed a real commitment and that there are many aspects which are very different to being an employee within somebody else’s business. Some of the things which particularly come to mind are:
- Do you want to be a short-term, serial entrepreneur, or to achieve a distinct ambition or purpose over the long term? For me it was the latter — the first priority for the former style of entrepreneurship is invariably looking for a quick financial return.
- Try to build some experience as an employee in your chosen sector first: it shouldn’t hold you back for long, but it will help you avoid some of the inevitable pot-holes further down the road.
- The biggest risk is launching out as an entrepreneur in the first place: downstream of that, you should weigh your risk-taking decisions carefully so as not to compound your exposure.
- Consuming early stage capital can seriously compromise your ability to control — and own — the business. Try to find a source of ‘surrogate capital’ earnings, even if it involves a limited diversion from your long-term aims.
- Remember that your commitment is total: it's not the same for fellow directors or employees, who can give notice at any time. Listen carefully to what they say — but remember that the buck stops with you.
- Borrowing might appear to help when the sun is shining, but you'll find yourself very exposed, very quickly when the storms arrive: and they will, usually when you least expect them.
There are many other aspects to watch out for, but it remains the case that It's difficult to start on an entrepreneurial journey if you've had no financial education; so, Jerome Mayhew is drawing attention to a really big issue. And this is, as he says, fundamentally important to the future economic growth of the country.
Gavin Oldham OBE
Share Radio