Should employers turn their business into startup factories? How could we make this happen?

In the UK, clear messages are coming down from the very top telling the citizen to become receptive to the idea of having a personal involvement in startups, almost as a matter of civic duty. It seems to be only a short step from offering verbal encouragement to individuals to do this (especially if voluntary takeup doesn’t meet expectations) to moves which apply more direct pressure, both to organisations and individuals.

Perhaps it’s worth pursuing some speculation about what those moves might be. In the spirit of innovation and creative brainstorming, let’s start off by being completely unconstrained by practicality, and follow this up by exploring the ramifications of the first options that come to mind.

The underlying assumptions concerning ‘what’s changed that makes this option worth considering’ are that:

  • successful startups have now conclusively demonstrated that they can be ‘bootstrapped’ with an investment level which amounts to little more than the personal living expenses of the founders
  • job growth is entirely driven by startups

Categories to which these ideas apply:

  • established businesses who offer practical support for their employees to become startup founders, co-founders, startup investors or facilitators in the ways described below
  • employees of an established business who wish to become proprietors of their own independent businesses (i.e., become a startup founder or co-founder) whilst remaining employed by the established business above
  • those who wish to join a newly forming business, but not as a proprietor (i.e., those who wish to become an ‘early hire’ at a startup) whilst remaining employed by an established business
  • unemployed individuals who wish to become proprietors of their own independent businesses (i.e., become a startup founder or co-founder)
  • retirees not registering as unemployed who wish to become startup founders or co-founders, startup investors or early hires
  • government employees about to be made redundant by departmental closures and workforce reduction who wish to become startup founders or co-founders, startup investors or early hires
  • the disabled unemployed who wish to become startup founders or co-founders, startup investors or early hires

Here are our suggestions:

Tax benefits to the established business as an employer of staff who are:

  • a startup founder
  • ‘early hires’ of startups
  • investors in startups
  • startup facilitators (mentors, voluntary or chargeable)
  • providers of services to startups (voluntary or chargeable)

Tax benefits for the established business acting as an investor in or sponsor of their employees startups

Tax benefits for the established business acting ‘as a as a provider of non-chargeable and/or reduced cost resources to their employees (e.g.,  office space and all the other kinds of resources provided by ‘startup incubators’)

Tax benefits to the employee if they start their own company whilst remaining with their existing employer

For the following other groups wanting to start their own businesses:

  • unemployed individuals
  • retirees not registering as unemployed
  • the disabled
  • public and private employees about to be made unemployed

These categories should be eligible for:

  • grants
  • office, factory, laboratory, warehouse or retail space and all the other kinds of resources provided by ‘startup incubators’
  • release from ‘job seeking requirements’

Our first questions:

  1. Should the startup being supported have to conform to some qualifying criteria, such as innovativeness or viability?
  2. Should there be any direction concerning what constitutes ‘preferred startups’ such as a shortfall of one type of startup or an excess of startups in a particular sector?
  3. Should these measures be restricted to those founding or supporting startups after the scheme begins?