Presentation by Stephen Roper and Mark Hart at the ERC State of Small Business Britain conference 2023 on June 21st at the Shard , London.

1. A decade of the Enterprise Research Centre:
What have we learnt? (Well a few things!)
Stephen Roper and Mark Hart
ERC conference, June 2023

2. Recognise anyone?

3. Business Dynamism
• Too often researchers ignore the
importance of the inter-relationship
between Churn; Age and Size of
businesses
• Initial survival and scaling of start-ups
a key concern – not interested in the
volume of start-ups per se – the 2%
rule of thumb
• Very few firms that can be
categorised as ‘high-growth’ or have
shown evidence of scaling
• Proportion of ‘young firms’ (<5 years)
in business stock a vital metric
• Ignore micro-enterprises at your
peril!
Surviving Start-
ups >£1m T/O
after 3 years

4. Innovation, Productivity & Growth
• Not all innovations are born equal
(Turner and Roper, 2021)
• Product or service innovation is
strongly linked to growth, but not
productivity
• Process innovation can deliver both
growth and productivity benefits both
in the short and longer term
• Innovation also plays a critical role in
both stimulating and capitalising on
exporting
• Product innovation is critical in a pre-
exporting phase part of learning to
export. Process innovation help sustain
external market position (Gkypali et al.
2021)
• And, it's sustained exporting which
critically allows firms to maximise the
productivity benefits of novel product or
service innovation (Jibril and Roper,
2022)

5. Growth Mindsets
• Most research into small business has sought to
identify associations between a range of
generally tangible factors and business
performance.
• This is particularly the case for research that has
been used to inform policy development. But,
limited:
– business performance and growth are usually
shaped by multiple, often interacting, factors.
– Under a third of working age individuals in the UK
are engaged in various stages of entrepreneurial
activity
• Many small business owners do not act in an
economically rational way - attitudes or
dispositions, aspirations and behaviours, are
shaped by their experiences.
• While some of these factors are not readily
observable, they are, nevertheless, causally
significant for small business performance.
Growth-inclined: positively disposed to business
growth.
Growth-ambivalent: somewhat disposed to business
growth – but less likely to exhibit positive mindsets
and behaviours than the growth-inclined.
Growth-resistant: largely not favourably disposed to
business growth.
So What? – can these mindsets be changed? Avoid
focus on exclusively growth-inclined
Theodorakopoulos, M et al., (2015) Sociology of Enterprise, BIS
Research Paper No. 238

6. Think Collaboration
• There are clear market failures around
information trust, and appropriation which
restrict firms’ collaboration significantly below
the social optimum (Hewitt-Dundas and Roper
(2018)
• These restrictions may be particularly significant
for smaller films which gain more from
innovation collaboration than larger companies
(Vahter et al. 2015)
• Collaboration is implicitly dynamic. Current
collaboration yields benefits but for future
innovation but also for future collaboration (Love
et al. 2014)
• Collaborators can make firms better future
collaborators, increase knowledge sharing and
collaboration with customers to improve
subsequent collaboration with universities
(Hewitt-Dundas et al. 2019)

7. Lifting the Lid on High Performance Firms
• Analysis of a cohort of start-ups in 2008 placed the concept of ‘high-growth’ within the life cycle of the
business - ‘high-growth’ can occur at any stage.
“There’s no such thing as a High-Growth Firm (or ‘scale-ups’) only firms that have high-growth episodes”
• Weakness of the arbitrary OECD HGF definition by rendering invisible many firms as ‘high-growth’ because
their rapid growth was not consistent year on year and took place in discrete one or two-year episodes over
the decade.
• NESTA Vital 6% in 2005-08 – 40% had exited the market by 2016!!
Scottish Start-ups in 2010:
timing of ‘high-growth’ events
(20% emp. def) 2010-18

8. Understanding the effects of public
support for innovation
• Through randomised control trials
we've demonstrated the value of
creativity grants, start-up support and
training, and online support for
technology adoption (Bakhshi et al.
2015; Jibril et al. 2022, 2023)
• Quasi-experimental econometric
analysis have established the significant
growth benefits for firms of
engagement with UKRI supported R&D
and innovation programmes (Vanino et
al. 2019)
• More recently, we have shown that
there are similar growth benefits from
engagement with organisations such as
the catapults and regional R&D and
innovation grants (Roper et al. 2023)

9. Entrepreneurial Trends in
Uncertain Times
• Monitoring entrepreneurial metrics for over
20 years! - association between crises and
rise in entrepreneurial intention
• Early-stage entrepreneurship remains at an
historical high level and so too is female
early-stage entrepreneurial activity.
• Immigrants and ethnic minorities have
maintained their high levels of early-stage
entrepreneurial activity.
• The share of early-stage and established
businesses owners engaged in various
combinations of high job expectation, new
product markets and exporting activities is
low.
• UK is ranked 25th out of 51 countries on the
quality of entrepreneurship framework
conditions.

10. Trade post-Brexit
• Counterfactual analysis highlights
the significant (and enduring)
negative effect of the Trade and
Cooperation Agreement on UK
trade volumes.
• The variety of products being
exported also fell by 20-42 per
cent with risks to future export
resilience (Du et al. 2023)

11. Final thoughts …
• So, working with our partners we have learnt a lot, and hopefully helped to inform and
shape some aspects of enterprise policy. There’s lots more to do though !!
• None of this would have happened however without funding and ESRC, DBT, DSIT, BBB,
IPO and IUK have been consistent supporters. Thank you!
• Many other organisations - public, private and third-sector – have supported individual
ERC projects over the last decade and we are grateful too for their engagement and
support
• And, finally our thanks to all of the ERC team. To Lucy Armstrong and Jane Galsworthy
who have led our Steering Group so strongly and to all the members of that group. And
to all of the ERC research and admin team now and in previous years. It has been and
remains a pleasure to work with you.
• Thank you all for your company on the ERC journey so far and we look forward to
working with you over the next decade…