Enterprise and Public Policy: A Review of Labour Government Intervention in the United Kingdom

Abstract

Despite the rapid growth of the small and medium-sized enterprise sector since the 1970s, rates of entrepreneurial activity in the UK remain moderate by international standards. Since its arrival in 1997 the Labour government in the UK has taken steps to tackle barriers to entrepreneurship by addressing economic, political, legal, and cultural issues. Through a review of key literature and policy documents, we seek to shed light on how the Labour government has shaped its entrepreneurship and enterprise-development policy agenda. It is found that, although there has been limited improvement in closing the enterprise gap, the Labour government does appear to have put in place a number of measures that are aimed at harnessing the long-term drivers of future enterprise, particularly catalysing the required cultural changes through the education system. It is suggested that enterprise policy making is diverse and has shifted away from small-business policy into a broader interpretation of entrepreneurship, although there inevitably continues to be significant overlap across the two areas. Furthermore, it is argued that enterprise initiatives are leading to the government taking quite radical routes in shaping its policies, becoming a bigger risk taker, and operating in a quasiprivate sector role. It is concluded that the increasing sophistication and specificity of policy instruments means that further research is required to understand how policies interact with each other.