Posted: Thu 11th Jul 2019
A new report has called on the government to reform the visa system after its analysis showed that almost half of the UK's fastest-growing businesses have at least one foreign-born co-founder.
The Entrepreneurs Network uncovered the figures by examining SyndicateRoom's top 100 list, which identifies the companies with the largest increase in value over the past three years. It found that 49% had founding teams including someone from outside the UK, compared to 14% of UK residents who foreign-born.
The list includes seven unicorns (businesses valued at $1bn or more) such as Monzo and Deliveroo. Five of them have at least one immigrant co-founder.
More broadly, nine of the UK's 14 unicorns have at least one immigrant co-founder, including TransferWise and OakNorth, and two of the UK's largest recent IPOs were Just Eat, founded by five Danish entrepreneurs, and Farfetch, started by Portuguese entrepreneur Jose Neves.
The immigrant co-founders of the UK's fastest-growing businesses hail from 29 different countries. The US is the most common place of birth, with eight co-founders, followed by France with five and India, Russia, Germany and Australia, all with four.
In addition, while 38% of the Britain's overall foreign-born population was born in an European Union country, 42% of the entrepreneurs on the top 100 list are EU-born.
Call for reform of the visa system for entrepreneurs
The report calls on government to:
restore the Tier 1 Post-Study Work Visa and allow international students to work in the UK up to two years after graduation before moving on to another visa.
Many of the entrepreneurs in the list moved to the UK to study. For example, Vincent Fraux and Juan Reveles, co-founders of Oxford Space Systems, first came to the UK to study. They now employ more than 35 people and export to the US, Europe and Asia.
reform the Tier 1 Investor Visa by lowering the minimum qualifying investment threshold for investment in UK start-ups, scale-ups and venture capital funds.
Responding to concerns that corrupt individuals are using the scheme to launder 'dirty' money, its auditing requirements were increased. But once the security concerns are dealt with, the report said "there is a strong case for reforming the visa".
ensure new start-up and innovator visas, which allow accelerators and incubators to sponsor entrepreneurs for visas, are implemented successfully. The implementation of the new visas has been criticised for flawed implementation including Home Office guidance creating delays.
Sam Dumitriu, report author and research director at The Entrepreneurs Network, said: "We often discuss immigration in solely negative terms. This is a mistake. As this analysis shows, immigrant entrepreneurs are powering the UK economy forward and contributing to record rates of employment.
"As the UK economy adapts to technological change, we are reliant on motivated individuals taking risks and working hard to create the jobs of tomorrow by starting and scaling companies. The fact that immigrants are behind nearly half of the UK's fastest growing companies is a powerful reason to keep the door open to international talent."
Jo Johnson MP added: "For Britain to remain at the economic top table, we need to embrace the gifted students and buzzing entrepreneurs who wish to contribute to our success.
"It is senseless, therefore, to deny graduate entrepreneurs the chance to set up their business and invest their talents and energy in the country where they studied.
"I am proud of the positive impact immigrants have had on the UK economy. Without them, we would not be the dynamic nation of manufacturers, exporters, app designers, innovators and disruptors what we are today."