Harry Berry of New Venture Partners, chairman of the Eastern Enterprise Hub

AN influential Parliamentary committee has been told about ground-breaking efforts in East Anglia to encourage more hi-tech business start-ups.

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Harry Berry of New Venture Partners, who is chairman of the Eastern Enterprise Hub based in Ipswich, was among the speakers at the latest meeting of PITCOM – the Parliamentary Information Technology Committee.

Mr Berry, who has been involved in promoting start-up and spin-out businesses at BT’s Adastral Park research park at Martlesham Heath for more than 10 years, said technology start-ups faced major problems in the UK compared with the United States.

One problem was that the market for venture capital in the UK and Europe was weak and firms were seen as a poor investment. As a result, many British businesses were switching to US legal ownership to allow easier access to American venture capital.

A second problem was the unwillingness of many UK entrepreneurs to take risks along with their investors, said Mr Berry.

“If I’m negotiating a package with a CEO in the US, first he is worried about his reputation, and then he will fight like mad for equity. But in Europe, you find CEOs talking about bonuses, and pensions,” he said. “As an investor, you don’t want that – you want to feel CEO motivation is aligned with shareholder growth, not just that they are being paid out of your money.”

The solution to these problems, he said, was to instil a culture of entrepreneurship in this country, and this was part of the objectives of the enterprise hub which was using local businesspeople to introduce better training in entrepreneurship in colleges.

“It’s simple: if our education goes on in colleges and universities, and our academics have spent their lives in academia, how can they teach entrepreneurship?” said Mr Berry. “The answer is, we have said to local businesses, you might not have realised it, but you have a corporate responsibility for training entrepreneurs in your local community; to give something back.

“So we have set up a system whereby businesses can mentor, sponsor, set up ‘dragon’s dens’. They will do it, if there is a way.”

However, Mr Berry said this was not a solution in itself. “There is no point doing this if when kids leave school they don’t know what starting a business is, or what to do – so there also needs to be something about going into fifth and sixth forms, and inspiring kids to run their own businesses,” he said. “If you do this, you can see astounding changes – it builds social skills, confidence, team-work.”

A third and final pillar of building a proper start-up culture occured after the work in schools and colleges, with actual business start-up programmes, he added.

“I do not believe a clear strategy exists today – we’re wasting a lot of money on process, but throwing nothing at culture change,” he told the committee.

“It’s not about making sure people have got somewhere to go to get information; it is giving people the confidence to believe they can do it. In the system we have now, they don’t leave education with that confidence, or belief.”

In a question and answer session, one delegate asked how the UK’s major technology companies, already battered by the recession, could be expected to find the resources to help deliver entrepreneurship training to communities.

Mr Berry replied: “The key is not to focus on the biggest organisations, but to go to businesses who are in the community and have something to gain from community.”