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All-Party Parliamentary Groups (APPG) Enterprise Forum (House of Lords) - Slides
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All-Party Parliamentary Groups (APPG) Enterprise Forum (House of Lords) - Slides


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  • 1. Supporting sustained growth in SMEs – policy approaches Professor Stephen Roper and Professor Mark Hart Enterprise Research Centre
  • 2. Introducing the Enterprise Research Centre • The Enterprise Research Centre (ERC) is an independent research centre which conducts policy relevant research on SME growth and development – launched January 2013 ( • ERC is a research partnership of Warwick Business School, Aston Business School, Imperial College Business School, Strathclyde Business School and Birmingham Business School. • £3m funding from the Economic and Social Research Council, the UK government Department for Business, Innovation and Skills, the British Bankers’ Association and the Technology Strategy Board. • Research on entrepreneurial ambition and inclination, leadership capabilities in the management teams of SMEs, the impact of diversity on SME start-up and growth, the financing of growth companies, innovation and exporting in SMEs and the role of SMEs in UK jobs growth.
  • 3. HGFs & Job Creation Re-visited UK – 2007-2010 66% 6% 1% 27% 41% 22% 22% 15% 0% 10% 20% 30% 40% 50% 60% 70% New firms Small and Larger firms – non-HGF High-Growth Firms (OECD Definition) Micro-enterprises – non-HGF Proportion of Job Creating Firms Proportion of Job Creation Source: Anyadike-Danes; Hart and Du (2013) “Firm Dynamics and Job Creation in the UK” ERC White Paper 6, April 2013.
  • 4. The problem of sustained growth • High growth small firms play a crucial role in job creation in the UK and internationally • From 2007-2010 high growth firms accounted for around 1 per cent of firms but 22 per cent of new jobs • But: – High growth is often short-lived with growth often slowing – The contribution of high growth firms to UK job creation has fallen by a third since 2005. • The UK has a sustained growth problem. How can we support sustained high-growth in our most ambitious SMEs?
  • 5. Defining the sustained growth problem… • For small firms growing rapidly from say £2m to £5m turnover the business and leadership challenges are immense • Growth means the nature of the business is transformed rapidly –this creates issues around finance, organisational structure, innovation and markets (to name just a few…) • Leadership and management demands are also transformed, with rapid growth challenging the capabilities of the owner-manager and leadership team.
  • 6. … and the solution • These dual challenges – business transformation and leadership development – define the sustained growth problem at the level of the firm. To achieve sustained growth it helps to deliver: – Support business development – Support leadership development • And, the international evidence is clear. Schemes which work in this way can deliver real benefits - 8-10 % a year increased and sustained growth • So the problem is not ‘what’ we need to deliver to support sustained growth, the question is ‘how’ we best do this in the UK.
  • 7. An example – the Dutch Growth Accelerator – 1/2 • Introduced in 2008 with the objective of supporting growth of two hundred SMEs from a turnover of approximately €2m to €20m over five years. • The GA provides a structured programme of leadership development modules, business mentoring, peer group learning sessions and leadership master- classes over five years. • Two cohorts of around 15-20 companies start once or twice a year. Firms are very carefully selected for the programme on the basis of past growth, ambition and willingness to commit to the five year duration of the programme. • The average firm participating is 5-10 years old and has turnover of around €3.6m. It has a highly ambitious Director-Manager of approximately 40 years old who has full ownership of the company.
  • 8. An example – the Dutch Growth Accelerator – 2/2 • Delivery is through a consortium of five private sector organisations (PwC, De Baak Management Centre, AKD (law), Philips Innovation Services) and Port4Growth. • Public investment in the programme - €5m - was used primarily for programme development. After the first five- year-period, the programme will be self-sustaining and be directly funded via beneficiary firms’ contributions (€75k per firm). • Benefits - firms in the programme grew sales 22 per cent more than a control group over two years, sales by 8 per cent and had a 55 per cent higher foreign sales increase.
  • 9. Supporting sustainable growth – what works? ERC White Paper reviewed: Systemic Approaches • Danish Growth Houses • U.S. Jobs and Innovation Accelerator Challenge Holistic Approaches • Sweden’s national incubator program • Ontario's Medical and Related Science Discovery District (MaRS) • The Dutch Growth Accelerator • Scotland's ‘Companies of Scale’ programme Thematic measures • Germany's high-tech grunderfonds • Commercialisation Australia • England's Growth Accelerator • Ireland's Management for Growth Programme • This leads to best practice guidelines for supporting sustainable growth relating to: – Enabling effective self-selection into support schemes – Firm selection criteria need to be strong, and reflect both the private and social benefits of supporting the development of specific businesses – Schemes are likely to involve sustained engagement with a business over a period of years. – Supporting sustained fast growth requires a dual focus on the development of the business and the capabilities of the entrepreneur. – Measures should be partnership based - business schools perhaps in partnership with banks or Chambers. – Delivery is likely to be regionally organised to facilitate attendance and peer-group learning.
  • 10. Delivering support for sustained growth in the UK… • The need: episodic high growth and a declining high growth contribution to new jobs • The appetite: UK experience with programmes such as the GS10ksb, BIG, LEAD suggests ambitious firms are keen and would contribute • The focus: delivering integrated business and leadership support over a sustained period with extensive peer group learning • Existing resources: a resource rich but un-coordinated and unfocused UK eco-system of mentors, financiers, leadership training organisations • One possible solution…. a National Growth College
  • 11. A National Growth College • Business school or university led regional delivery consortia involving banks, Chambers and other business support partners • NGC would support ambitious businesses to grow turnover from £1-2m to £3-5m over 3 years – around 31,000 companies in this target group. • Work through an intensive programme of leadership training, mentoring, growth planning, peer-group workshops and accredited personal development activities – a ‘growth MBA’ • Regional consortia could be supported by small national group to co- ordinate a ‘curriculum for growth’ and share best practice • Public funding might be needed initially to support programme development and proof of concept
  • 12. Contact us: If you would like any more information about the ERC and any of its activities please contact the Director, Stephen Roper at or the Deputy Director, Mark Hart at More details about the activities of the ERC and our latest events can be found at: