Will The Empire Strike Back?

When Margaret Thatcher came to power, she promised to imbue Great Britain with a new spirit of independence.

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It used to puzzle people -- Adam Smith, for example, and Napolean, and, very likely, the Kaiser and Hitler, too -- that Britain, "a nation of shopkeepers," in Smith's famous phrase, should have founded and long defended one of the greatest empires in the history of the world. In times of crisis, the British are a formidable lot: tenacious, resourceful, full of Churchillian pluck. But in less interesting times, which is most of the time, they seem stricken by the shopkeeper's malaise -- a low-grade fever of anxiety in constant struggle with complacency.

There has been an epidemic of shopkeeper's malaise in the past 30 years, with complacency getting the upper hand. The gallant defenders of the West were proud of themselves after World War II, and they were tired. As individuals, they felt entitled to a living from the state, more or less regardless of effort and contribution. As a country, they felt entitled to a living from the community of nations.

That the community of nations might not oblige, that the helping hands of the state might be overextended, were truths slow to penetrate the malaise. Eventually, however, they found a somewhat improbable home in Margaret Thatcher, a shopkeeper's daughter who believed devoutly in the galvanizing effects of free enterprise and the unfettered market. Such views were alarming to the Tory squirarchy, but they were also curiously thrilling. The party made her its leader, and in 1979, on becoming prime minister, she promised a liberation of the entrepreneurial spirit.

Now, five years later, the spirit appears to be stirring -- fitfully, spottily, but definitely in the air. The statistics are flatteringly described as crude, but at least they exist. They show that in 1980, '81, and '82, something like 20,000 new businesses were registered in Great Britain.

This is a modest accomplishment in view of the government's efforts. Each Thatcher budget has brought in a series of measures designed to ease the burdens on small business people and to entice more of them to set up enterprises. Most useful are the loans-guarantee program, which is intended to stimulate heretofore skeptical bankers, and the business expansion schemes that give tax breaks to would-be investors in small companies.

The private sector has also been helpful. Nearly all the big banks have set up small-business divisions. Accounting firms have set up special departments. Big companies, whether nationalized (British Steel) or not (The Boots Co., Courtaulds, Esso Petroleum, Imperial Group, Vauxhall Motors), have all nurtured small subsidiaries. Multinationals (Prudential Corp.) have vied with government development organizations and local agencies to demonstrate whose is the greatest devotion to the small business person.

Venture capital has increased and multiplied in the past five years, and venture capitalists are prepared to invest in promising endeavors. Britain probably has more than 60 venture partnerships, with a combined capital of ?300 million, most of it raised quite recently. In addition, an unlisted securities market, established in 1980, has provided some financing for about 200 companies. With looser regulations, lower fees, and smaller allowable offerings, this market offers higher potential rewards for both entrepreneur and investor.

The entrepreneurial spirit has been encouraged by other developments as well. Management leveraged buyouts, rare in Britain until recently, now are becoming much more common. British universities, those cloisters of the intellectual graces, are at last beginning to offer business courses, management training, and scientific research programs that may have some slight relevance to the world of commerce and manufacturing. Science parks now adorn three universities -- Aston, Heriot-Watt, and Cambridge. More are planned and there are several others unconnected to universities.

Just as important, Britain may now boast of one or two individuals, and several small companies, which are dramatic models of entrepreneurial daring and persistence. Heroes are vital, especially in high-technology industries. They encourage the timid, the overly prudent, to hazard a break with their current employers and set up businesses of their own. This is a well-worn path in California's Silicon Valley, where self-made millionaires dazedly lurch from their garages every day, so common that they are celebrities only to their neighbors. But Britain has Sir Clive Sinclair, a Cambridge-based adventurer, whose face is known in all the land. Televised, it launched a million computers in less than three years, and plumped up his worth to an estimated ?130 million. Since 1980, more than 200 companies have gone public on the unlisted securities market, creating -- says the accounting firm of Touche Ross -- at least 115 paper millionaires.

Entrepreneurs get another boost from foreign companies looking for a place to invest. Many seem to favor Britain. American electronics companies, for example, prefer it to all other European countries, and to Mexico, Canada, Taiwan, and Japan. Its membership in the European Economic Community (EEC) is now part of the attraction, of course; but so is a widespread perception that Britain has a good supply of trained manpower, particularly scientists, and a happier university-industry relationship than exists in most competitive nations.

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