Small Talk: Entrepreneurial spirit alive and kicking in North

This week on Business Connections... David Prosser reports on issues vital to the small and medium business. Join our growing SME network at:

Where will the next generation of small business owners come from in Britain? Not necessarily the places you would expect, according to Sage, the IT specialist. Its research suggests that the hotspots of entrepreneurialism in the UK are not to be found in the South-east, the region on which the economy is currently so dependent, but in areas such as the North-east and Yorkshire.

Across the country as a whole, one in four people would like to start their own business, says Sage, but only 7 per cent expect to be able to do so in the next two years. In the North-east, that figure rises to 11 per cent, and to 10 per cent in Yorkshire.

Only a small number of people in these regions cite a lack of job opportunities as their motivation for going it alone – 4 and 8 per cent in the North-east and Yorkshire respectively. Instead, people say they're motivated by the idea of being in control of their work lives and earning money for themselves rather than an employer.

Research such as this offers some interesting insights for policymakers, who tend to be rather too clustered in London.

To be fair, this Government has made some efforts to support small businesses nationwide, but it is not getting it right just yet. For example, the £2.4bn Regional Growth Fund, an initiative designed to support businesses in exactly the sort of areas highlighted by Sage, has just been savaged by the Institute of Chartered Accountants in a submission to a parliamentary inquiry into its effectiveness.

Nor is it doing enough to reach out in areas where people appear to feel more reluctant to go it alone. Sage's research suggests there is an inverse link between high levels of unemployment and entrepreneurialism. In Scotland and Northern Ireland, unemployment is higher, but the numbers of people planning to start their own business are lowest. Nervousness about employment prospects appears to be fostering a greater sense of risk aversion.

How, then, does the Government reach out? Well, here's one interesting thought. Julia Hobsbawm, the public relations executive who now runs a networking business for professionals, thinks the current approach is far too internet-based – that there is not enough focus on developing intimate relationships, particularly with companies all around the different parts of the country.

"If ministers, including the Prime Minister, really are serious about supporting the SME sector, they need to change, because the Government is incredibly bad at making that ongoing rolling effort into networking," she argues. "They put huge amounts of store on online resources and that's nowhere near as effective, for businesses, as face-to-face contact."

It's not difficult to see what Hobsbawm means. Business Link, the Government-backed SME support service, has massively expanded its online resources. That's no bad thing, but this is still a poor substitute for the day-to-day and face-to-face contact and support once provided by the Regional Development Agencies.

Grass allergy experts given shot in the arm

Alternative Investment Market-listed Allergy Therapeutics is celebrating after finally getting approval from the US Food and Drugs Administration for the next stage in trials of its grass pollen allergy vaccine. It's a treatment that offers allergy sufferers relief via four injections a year, significantly more convenient than current treatment programmes.

Allergy Therapeutics now needs to find a partner to help it bring its vaccine, Pollinex Quattro, to market in the US (it is already available in parts of Europe). But Gary Waanders, an analyst at Nomura, reckons the FDA's decision could prove to be a deal-clincher. "We believe the approval… will make PQ Grass a much better development and licensing opportunity for potential partners," he says.

Shares in Allergy Therapeutics jumped sharply on Friday, following the announcement of the FDA's decision, reaching 10.88p, a gain of around 25 per cent. Nomura thinks there's more to come, with a fair value estimate of 25.7p for the stock.

Breakthrough for blood firm

LiDCO Group, which sells specialist medical devices for monitoring blood pressure, has signed a new distribution deal with the market leader in Japan, Nihon Kohden.

The deal gives it access to a market where there are 680,000 patients considered to be at risk each year and who could potentially benefit from the Alternative Investment Market-listed company's products.

House broker FinnCap puts the size of the "Japanese market opportunity" at $400m, and expects to see sizeable orders over the next few months. Robin Campbell, at Merchant Securities, points out that "Japan is the second largest market in the world for haemodynamic monitoring products".

Small business person of the week

Rachel Lowe, founder, She Who Dares

She Who Dares is a new gift brand inspired by some of the awards that I've been given during my career, including my MBE for services to business. Our first product will be a fragrance and all our gifts will come with packaging that reads "Nothing is Impossible". I know how important and inspiring acknowledgement of what you do can be.

"You don't have to have won two gold medals at the Olympics to receive our gifts – the idea is to acknowledge any achievement at all, from getting your degree to being an amazing mum.

"The other thing I really wanted to do with this venture is celebrate Britain – we've tried to do as much production as possible in Britain, which is really unusual for a fragrance brand. But I suffered during the recession myself, so although it's cost us more to bring the product to market, I really wanted to support the British economy.

"I know just how hard being in business can be. I made my name with the board game Destination, but it was a real rollercoaster ride. I went on Dragons' Den to ask for funding, but got turned down, and then brought it out myself – we became the top-selling game at Hamleys.

"The fragrance market is enormously competitive, of course, but I love that. People told me I could never compete with my board games business, and now I'm one of only two companies in the sector to hold an official licence to sell London 2012 merchandise.

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