Entrepreneurs more likely to be based in left wing areas

New research from the University of St Andrews is challenging conventional assumptions about the relationship between politics and entrepreneurship. 

The study explored whether the political environment in which people live influences their likelihood of them starting a business and its findings reveal that areas with predominantly left-leaning political views have the highest rates of business creation, while areas with stronger right-wing political affiliations record the lowest. 

The results run counter to the widely held belief that entrepreneurship is more closely associated with conservative political values.

In a paper published in the journal of Small Business Economics, the researchers examined start-up data for 651 electoral constituencies in the UK. The core data is derived from the UK’s largest single entrepreneurship programme, the Start-Up Loan scheme, which has supported 103,442 start-ups between 2012 and 2023. Contrary to expectations, they discovered that left of centre political constituencies have on average the highest business start-up rates and right-wing constituencies the lowest.

In general, start-ups in right of centre constituencies feature more in knowledge intensive business services and are better resourced than their counterparts in left of centre constituencies where entrepreneurs disproportionately transition from unemployment.

 The quantity-quality nexus surrounding voting behaviour and entrepreneurship raises an interesting set of questions for further research to explore.  This begs the question are poorer people in left wing areas seeking entrepreneurship as an escape mechanism to avoid unemployment, a phenomenon known as “refugee” entrepreneurs.    

Co-author of the study, Professor Marc Cowling from Oxford Brookes University, said: “The results of the study were interesting and counterintuitive and go against the supposition that right wing areas are by nature more entrepreneurial.”  

Co-author Ross Brown, Professor of Entrepreneurship at the University of St Andrews Business School, said: “The principal implication of this study is that while entrepreneurship is an important lifeline for some it may not be an entirely emancipatory process for all who embark on this endeavour. Policymakers need to be aware that start-up schemes can create sustainable and profitable businesses but can also act as a conduit to for the unemployment to establish low growth, low innovation   businesses”.

ENDS