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Anders Hoffmann, Dorte Høeg Kock  David J StoreyCopenhagen 28 November 2012
+ The “front-end” of policy: the strategic  decision of whether and how to “intervene”+ The “back-end” of policy: did it w...
1. The policy-maker faces a wide range of   choices on how to deliver policy2. The policy-maker may be unaware of the   op...
The decision to focus on such firms has beenmade. The issues are:+ An advice service already exists+ The tradition is to d...
Central Government [Principal] wants:             Growth Houses [Agent] wants:+   To show the funding was distributed in  ...
Table 3 - Goals for the Regional Growth Houses, 2007-2010                                          2007                   ...
Number of users of the Growth Houses              5,075                    2,500                          2,000           ...
Deciding whether there was added value:+ Over what period of time would we expect to  see impact?+ Which metrics+ Should w...
Number of employees in firms using the                              Growth Houses                                       Ob...
Table 5: Sales Change for Growth House clients and Control group firms                   Change 2008 Change 2009          ...
2008-2009            2009-2010             2010-2011           Growth    Control     Growth    Control     Growth    Contr...
+ Implementation of policy faces key challenges+ The Principal Agent framework is helpful since at its  core is the Contra...
Ii b - storey&hoffmann evaluating the effect of soft forms of business support in denmark
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Ii b - storey&hoffmann evaluating the effect of soft forms of business support in denmark

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The upgrading of workforce skills is key to the competitiveness of SMEs. In today’s business environment there is a premium on innovation that enables firms to develop new products and services, new production processes and new business models. This requires both in-house innovation and the ability to absorb knowledge from other firms and organisations, both of which call for a skilled labour force. Skills are also a critical but understated resource for entrepreneurship seen in the sense of business creation. Similarly to workforce skills, entrepreneurship skills will boost the competitiveness of local businesses thanks to the improved strategic and management competences of the entrepreneur.

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Transcript of "Ii b - storey&hoffmann evaluating the effect of soft forms of business support in denmark"

  1. 1. Anders Hoffmann, Dorte Høeg Kock David J StoreyCopenhagen 28 November 2012
  2. 2. + The “front-end” of policy: the strategic decision of whether and how to “intervene”+ The “back-end” of policy: did it work?This is about the “middle” aspect of policy –itsimplementation
  3. 3. 1. The policy-maker faces a wide range of choices on how to deliver policy2. The policy-maker may be unaware of the options available3. There is an absence of theory and reliable practice to help in deciding amongst the options4. Effective implementation is vital for policy success
  4. 4. The decision to focus on such firms has beenmade. The issues are:+ An advice service already exists+ The tradition is to deliver advice regionally+ The tradition is for this to be delivered by semi-public bodies where local government is present.+ It is a classic Principal Agent problem
  5. 5. Central Government [Principal] wants: Growth Houses [Agent] wants:+ To show the funding was distributed in + To exercise discretion on how money is to line with stated public policies. be spent because of variations in local circumstances which are imperfectly+ To show it was spent on the policy areas understood by the Principal. specified by the legislators. + To have discretion over the selection of their client group of firms. + To demonstrate the impact of working+ To show it contributed to achieving the overall government objective of with a small group of firms with growth enhancing enterprise. potential. + To enhance the performance of clients, without having to “hand them over” to+ To ensure it did not lead to private sector private sector consultants” prematurely. consultants being “crowded out”. + To have a reward system that is based+ To show the taxpayer got “value for upon factors under their control – such as money” from the expenditure. number of hours of support.+ To ensure an appropriate distribution of + To avoid having an uncertain rewards funding amongst the regions. system which is heavily dependent on firm+ To have a funding distribution system that performance -over which they have little is flexible to changed circumstances and control rewards good performance from Agents.
  6. 6. Table 3 - Goals for the Regional Growth Houses, 2007-2010 2007 2008 2009 2010Recruiting Director April 1th. - - -Cooperation agreements withlocal business units Min. 90 pct. - - -Cooperation agreements withother public actors 15 + agreements - - -Co-operation agreements withprivate operators 10 + agreements - - -Deadline for the developmentof website December 1th. - - - 50+ associatedMentor Networks - - - mentors. Completed first stage of Networks to have completedCompetence development for competenceadvisors competency development over - - development two days. programmeUsers of the Growth Houses 5,075 2,500 2,000 2,500% referred to privateconsultants, public operators 75% + 75% + > 75 % >75%etc.% referred to privateconsultants - - - 70 %% Satisfied or very satisfiedwith Growth House services 80 % 80% >80% >80 %
  7. 7. Number of users of the Growth Houses 5,075 2,500 2,000 2,500Share referred to private consultants, >75% >75% Min. 75 pct. Min. 75 pct.public operators etc.Share referred to private consultants - - - 70 pct.Users satisfaction with the Growth Houses(Satisfied or very satisfied with the >80% > 80 % Min. 80 pct. Min. 80 pct.services)User satisfaction with the counsellors - - Min. 70 pct. Min. 80 pct.(satisfied or very satisfied)Cooperative partner satisfaction with the - >80% Min. 80 pct. Min. 80 pct.Growth Houses (satisfied or very satisfied) Create competency profiles on 50 + - - -Cooperation with private consultants private consultants >10 % compared withEmployment growth in the counselled >10% compared with non-counselled Same growth rate as in - the year ofenterprises enterprises the year of counselling counselling >20 % (compared with >15% compared toTurnover growth in the counselled >20% compared with non-counselled - non-counselled the year ofenterprises enterprises enterprises counselling Min. +20 percentage points >20 % compared with >10 % compared withExport growth in the counselled enterprises - (compared to non-counselled year of counselling year of counselling enterprises)Share of high-growth enterprises in the Min. +2 percentage points (compared >1 % compared with last >2 % with compared -region to last year) year to last year Arrange Jointly develop and Conduct 5 newDevelopment of new activities / services 40+ - implement 3+ new projects to develop activities programmes service quality The equivalent of 20+ % Act as regional coordinator of a of firms receivingEvents etc. - nationwide growth campaign from - counselling participate in November 17th - 23th 2008. regional events.Press coverage and the knowledge rate to - - - >10 % improvementthe Regional Growth Houses
  8. 8. Deciding whether there was added value:+ Over what period of time would we expect to see impact?+ Which metrics+ Should we use control groups?+ What control groups are appropriate?+ THE GLOBAL RECESSION
  9. 9. Number of employees in firms using the Growth Houses Observation Period Q1-Q2 Q3-Q4 Q1-Q2 2008 2008 2009 Q3 2009 Q1-Q2 2008 4240 4261 3744 3533Counselling Period Q3-Q4 2008 15047 15140 13419 12521 Q1-Q2 2009 9408 9778 8960 8443 Q3-Q4 2009 8164 8498 8056 7978 Source: Statistics Denmark.
  10. 10. Table 5: Sales Change for Growth House clients and Control group firms Change 2008 Change 2009 Clients Control group Clients Control groupClients in 2008 9.1 7.1 -12.8 -15.2Clients in 2009 9.2 8.9 -8.6 -14.5
  11. 11. 2008-2009 2009-2010 2010-2011 Growth Control Growth Control Growth Control House group House group House group customers customers customersYear -8,1 -7,9 -3 -3 4,2 2,72008Year [-5,6] [-8,6] -1,2 -1,6 4,9 2,92009Year [0,1] [-2,6] 8,0 7,42010 * Enterprises from same region, industries and of same sizes, weighted data
  12. 12. + Implementation of policy faces key challenges+ The Principal Agent framework is helpful since at its core is the Contract+ The terms of the Contract influences the behaviour of those delivering the policy+ The contract has to evolve over time to reflect both “learning” and changed external circumstances+ The availability of high quality current data is critical for informing changes to the Contract.
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