With environmental issues high on most companies’ corporate agendas, green business is fast becoming one of Britain’s most significant industries.
The rise of the wind, wave and tidal energy sector is creating huge opportunities for UK businesses and jobseekers alike. Trade body Renewable UK estimates the industry directly employs 18,000 full-time staff – a 74 per cent increase from 2010. A further 70,000 jobs could be created in the next decade if green businesses realise their potential and plans to invest in new projects are carried out. With more than £29 billion of investment planned for the sector, green businesses look set to help power the UK economy.
Sector at a glance
34,300 –The number of full-time or indirect roles employed by wind, wave and tidal power companies
- 6,830 – A doubling of people working in the offshore wind industry from 3,151 in 2010 to 6,830 in 2013
- 45,000 – The number of people who could be employed in the offshore wind sector by the 2020s
Green business and the economy
The industry has enjoyed impressive growth in recent years, with revenues rising substantially between 2009 and 2012. The biggest increase came in 2009, when revenues across the sector soared by 60.8 per cent. Since then, growth has been tempered slightly by the economic downturn. Still, 35.9 per cent is a huge jump compared with many other sectors that have experienced little to no growth since 2009.
The green business sector could expand further in the coming years, as British companies get on board with the Government’s plan to cut emissions by 18 per cent by 2020. According to the Confederation of British Businesses, the industry accounts for £122 billion of a global market worth £3.3 trillion.
By 2014–15, green business is expected to roughly halve the UK’s trade deficit and could add £20 billion to the economy. As the CBI states, green business is an opportunity that UK companies cannot afford to miss.
Investment angels are here to help
Commentary by Jenny Tooth, CEO, UK Business Angels Association (UKBAA)
Angel investment can provide the first vital injection of equity to support innovative small businesses, with many successful high-growth ventures in the UK relying on the backing of business angels. These angels not only bring risk capital, but also access to business experience and market contacts, which are vital ingredients to support effective growth.
While many entrepreneurs are turning to angel investment to finance their growth needs, it is important for management teams to know how to approach investors and present an attractive proposition. Angel investing in the UK is reflected through a wide range of models involving individual angels, networks, syndicates, and highly successful entrepreneurial investors who are often known as ‘super angels’. Further market developments include accelerators and online communities, as well as equity crowd funding platforms. At UKBAA, we focus on enabling entrepreneurs to connect to the appropriate source of angel investment to meet their needs at relevant stages in their development.
"Angels not only bring risk capital, but also access to business experience and market contacts to support growth"
Angels increasingly work in syndicates, enabling them to pool their investment capacity, share risks and experience and carry out due diligence together. This enables angels to provide significant sums of finance to small businesses, with first-round deals averaging £1.5 million to £2 million in value. The £100 million Government-backed Angel CoFund has also provided valuable firepower alongside angel-syndicated investments. Using this syndication approach, angel investors can support multiple rounds of fundraising and have the capability to make a serious contribution to building global businesses. Angel investment, through its more simplified share structure, can also be a good basis for companies going public. This past year has seen some important listings on AIM that involve successful angel-backed businesses.
Nevertheless, angel investors still face the challenge of finding opportunities for liquidity. Without this, business angels’ investment capability becomes locked and they are unable to invest their wealth into new start-ups. It is important for angels to be able to exit a business and pass the baton to larger investors and corporates that can help grow the company globally.
At the same time, there is a need to constantly renew the pool of investors and at UKBAA we are keen to encourage successful entrepreneurs to recycle their wealth back into angel investing to support the next generation of innovative start-ups.