All-Party Parliamentary Groups (APPG) Enterprise Forum (House of Lords) - Slides
Supporting sustained growth in
SMEs – policy approaches
Professor Stephen Roper and Professor Mark Hart
Enterprise Research Centre
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 (www.enterpriseresearch.ac.uk)
• ERC is a research partnership of Warwick Business School, Aston Business School,
Imperial College Business School, Strathclyde Business School and Birmingham
• £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.
HGFs & Job Creation Re-visited UK –
New firms Small and Larger
firms – 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.
The problem of sustained growth
• High growth small firms play a crucial role in job creation in the UK
• From 2007-2010 high growth firms accounted for around 1 per cent
of firms but 22 per cent of new jobs
– 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?
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.
… 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.
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.
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
• 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.
Supporting sustainable growth –
ERC White Paper reviewed:
• Danish Growth Houses
• U.S. Jobs and Innovation
• Sweden’s national incubator
• Ontario's Medical and Related
Science Discovery District
• The Dutch Growth Accelerator
• Scotland's ‘Companies of Scale’
• Germany's high-tech
• Commercialisation Australia
• England's Growth Accelerator
• Ireland's Management for
• This leads to best practice guidelines for supporting
sustainable growth relating to:
– Enabling effective self-selection into support
– Firm selection criteria need to be strong, and
reflect both the private and social benefits of
supporting the development of specific
– Schemes are likely to involve sustained
engagement with a business over a period of
– 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.
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
• 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
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
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please contact the Director, Stephen Roper at firstname.lastname@example.org or
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