“Political entrepreneur” is one of those terms with too many definitions to be useful — the oldest being someone who profits by shaping rules rather than by creating value. A new NBER working paper, Political Entrepreneurs, proposes a more flattering one.
Across 26 US states between 2009 and 2023, the paper reveals that more than 40% of state legislators both owned and actively managed a firm. Britain has no comparable figure. The nearest thing is the LGA’s councillor census, which in 2022 found 15.8% of English councillors describing themselves as self-employed or freelance, against 8% of the adult population. Twice the national rate, but nowhere near 40%.
These US “political entrepreneurs” don’t sponsor more bills overall, but they initiate a greater share as first or sole primary sponsor. Nor are they any more likely than colleagues with other business ties to sponsor pro-business bills, or bills endorsed by state Chambers of Commerce:
“Instead, they selectively advance pro-entry legislation, especially bills related to deregulation and innovation rather than antitrust or access to capital.”
In other words, entrepreneurs with political power in the US are more focused on levelling the playing field than on tilting it.
In our Operation Innovation essay collection, David Stallibrass and John Fingleton CBE quote John Kay:
“You can become wealthy by creating wealth or by appropriating wealth created by other people. When the appropriation of the wealth of others is illegal it is called theft or fraud. When it is legal, economists call it rent-seeking.”
As Kevin Murphy, Andrei Shleifer and Robert Vishny argue in Why Is Rent-Seeking So Costly to Growth?, rent-seeking is self-reinforcing. The more of it there is, the more attractive it becomes relative to producing. It also falls hardest on innovators, because new firms need the permits and licences that incumbents have already bought, and the people best placed to extract rents prefer dealing with insiders they know to outsiders trying to get in.
Not that all lobbying is duplicitous. Much of it helps regulators understand what they are regulating, as Stallibrass and Fingleton are careful to say. The trouble is that the same channel serves both purposes, and incumbents have far more practice using it.
Writing on the paper in Network Effects, Eamonn Ives set out three responses: “Political parties could do more to encourage founders to stand for office; governments could make it easier for them to spend periods inside agencies and departments through appointments, fellowships or advisory roles; and policymakers could be more deliberate about bringing entrepreneurs into the room before rules are written, rather than consulting them as an afterthought.”
The third is the one we spend most of our time on. But if you want to be a political entrepreneur in the model of Baroness Lane-Fox, Alex Depledge, Matt Clifford, Emma Jones or Lord Bilimoria, the evidence suggests you would push for market entry rather than for protection.
Pass Notes
Our good friends at Startup Coalition have published BizPass, a blueprint for a business digital identity. Polling 501 business leaders, they find that 84% verified their identity to an outside organisation in the past year and 43% repeat a check they have already completed at least monthly — that adds up to more than 11 million hours a year across Britain’s 5.6 million businesses.
Less than half find it easy to get one government department to recognise a verification completed elsewhere, and 30% have handed identical information to more than one department separately. It cites The Master Key, our report with Xero and Enterprise Nation, for first putting the harder question — not whether a company exists, but who may act for it — in language a founder could act on.
Net Contributors
Our annual Job Creators research launches on Wednesday 16 September at Penningtons Manches Cooper. We’re just crunching the final numbers, but every previous wave of this research has found immigrant founders starting a disproportionate share of Britain’s most valuable and innovative companies. Request a place.
Our Next Events
APPG Evidence Session: Entrepreneurship in Financially Excluded Communities
🗓 Wednesday, 2 September 2026
🕐 17:00 to 18:00
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No Agenda Breakfast: Evelyn Partners
🗓 Wednesday, 9 September 2026
🕐 08:45 to 10:00
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Quarterly Adviser Roundtable: UCL School of Management
🗓 Tuesday, 15 September 2026
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📍 Canary Wharf, London
ℹ️ Our quarterly roundtable for Advisers and Patrons of The Entrepreneurs Network
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Job Creators 2026 Report Launch
🗓 Wednesday, 16 September 2026
🕐 15:30 to 17:30
📍 The City, London
ℹ️ Join us at Penningtons Manches Cooper to celebrate the contribution of Britain’s foreign-born founders
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News and Views
We published the latest edition of Three Big Ideas
M&G Investment and Schroders are among the asset managers bidding to run the government’s new £1 billion UK Scale-up Fund
Andy Burnham has pledged to ‘take pressure off’ business ahead of October Budget in an attempt to tackle cost of business and calm fears of another tax raid on the private sector (Paywall — Financial Times)
He has ruled out an early election, while admitting the UK faces a ‘challenging’ financial outlook ahead of Chancellor John Healey’s October Budget (Paywall — Financial Times)
The UK’s political consensus on climate action has broken down as rising energy bills undermine public tolerance for further net zero measures
Meet Lord Sonny Leong CBE, the small business minister
The Rhine Group, a coalition for European businesses, government and academic leaders, has launched to press the case for a more competitive Europe
The Resolution Foundation’s Q3 2026 Macroeconomic Policy Outlook finds that UK productivity growth has picked up sharply and broadly over the past two years
Chancellor John Healey may have inherited an economy starting to emerge from the long shadow of the 2008 financial crisis
The Treasury has launched a review of how business rates are calculated for pubs and hotels, which could lead to wider reform of the system
Healey’s first Budget is a chance for radical change, and he’s urged to use fiscal reset to pursue more fundamental tax and spending reform (Paywall — Financial Times)
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Friends of the Network
Understanding your Intellectual Property
🗓 Tuesday, 8 September 2026
🕐 10:00 to 11:00
📍 Online
ℹ️ Learn how intellectual property (IP) can create value from your ideas
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BIND Programme — 11th Edition
⏰️ Deadline: Friday, 4 September 2026
ℹ️ The BIND Open Innovation Platform, developed by the Basque Government and SPRI Group, allows international startups to connect with 100 industry-leading corporates and SMEs
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Funding Female Founders
🗓 Wednesday, 21 October 2026
🕐 12:00 to 14:30
📍 Evelyn Partners, London
ℹ️ Envestors will be presenting five female founders, in the UK under the Innovator Founder visa, seeking Seed Enterprise Investment Scheme and Enterprise Investment Scheme investment
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Support for UK Entrepreneurs
We’re often asked where founders should turn for practical support beyond policy. So we’ve curated a list of government sites and trusted organisations we regularly recommend. Each week, we share a section from our Support for UK Entrepreneurs page. Are we missing something? Let us know.
Philanthropy, Impact and Post-Exit Activity
New Philanthropy Capital provides research and guidance to help individuals and organisations give effectively.
Charities Aid Foundation provides support and guidance on structured and tax-efficient giving.
UnLtd provides funding and support to individuals starting social enterprises.
UK Community Foundations provide advice and infrastructure for local charitable giving.
Best wishes,
Philip
Philip Salter
Founder
The Entrepreneurs Network