An overhaul in bankruptcy laws would help the UK entrepreneurial community, a new report claims.
A Kingston University report, commission by the Department for Business Innovation and Skills (BIS), said changing the law would encourage firms to wind up voluntarily to avoid expensive bankruptcy proceedings.
Professor Robert Blackburn, who led the report team, told Startups: “As soon as someone becomes bankrupt here it’s incredibly difficult for them to shake off the stigma and start another business.
“At the moment it’s relatively easy to start a business but incredibly difficult to close one. We should ease the process.”
The report also said the government should be focusing on stimulating innovation rather than bailing out dying industries.
The report suggested that companies needed to innovate as well as cost-cut in order to survive the recession. Those that failed to innovate would lack the resources for growth when the upturn arrived, said Blackburn.
A report conclusion stated: “The key to successful government intervention does not lie in persisting with business models that were appropriate in the past or are currently under threat.
“Instead, successful intervention lies in breaking the frame and reinventing not just the organisation, but also the broader socio-economic political system within which business organisations operate.”
© Crimson Business Ltd. 2009