Keynote presentation to the Creme Conference December 3rd 2020 by Mark Hart.

1. Lifting the Lid on the Entrepreneurial Dynamic in
the West Midlands
Professor Mark Hart
CREME 24th Annual Conference
3rd December 2020

2. Background
• Ethnic minority businesses (EMBs) are a staple feature of cities across the
United Kingdom (UK).
• At £25 billion per annum, the economic contribution of ethnic minority
entrepreneurs to the UK’s Gross Value Added (GVA) is huge and equivalent
to that of vital sectors like the Chemical industry, or large cities like
Birmingham.
• Ethnic minority entrepreneurs are also important to a post-COVID-19
recovery programme.
• Business owners from an ethnic minority background are more likely to be
growth-focused, innovative and export-oriented than other firms.

3. Building Resilience in EMBs – great
principles but…….

4. ‘Lifting the Lid’ Project – 2020-23
• Promoting and encouraging viable and sustainable entrepreneurial activity
requires a more complex, in-depth understanding of diversity, particularly
regarding enterprise generation and activity.
• National and local policy makers acknowledge the contribution of minority
enterprise to inclusive growth but are hindered by a lack of robust data.
• "Lifting the Lid" 3-year project funded by WM-REDI builds on existing
knowledge of diversity and enterprise whilst utilising the long-standing Global
Entrepreneurship Monitor (GEM) project – www.gemconsortium.org
• GEM’s unique annual dataset on entrepreneurial attitudes, activity and
aspiration in the UK and the West Midlands stretching back to 2002 offers an
opportunity for new ground-breaking research.

5. GEM Panel Study of
Entrepreneurial Dynamics (PSED)
• PSED for the West Midlands will provide new information
about the nature of the firm creation process for a range of
ethnic minority communities.
• This longitudinal study of business creation by ethnic
minorities in the West Midlands (started September 2020),
will identify those entering the start-up process and track
their efforts and outcomes over time and ‘lift the lid’ on a
range of issues crucial to good policy formulation and delivery.

6. PSED – Key Questions
• Length of time required to set up
new activity.
• Amount of activity that precedes
inclusion in administrative
registries, usually maintained by
government agencies.
• Amount of informal financing
that is assembled before the
start-up venture becomes a legal
entity.
• Strategies and business models
that underlie these nascent
ventures.
• Nature, composition, and
background of the start-up
teams.
• Use of and reaction to assistance
programs.
• Proportion of start-up efforts that
become profitable new firms.
• Major characteristics associated
with a transition to a profitable
new firm or disengagement from
the start-up venture.

7. US PSED – ‘Start-up’ ?

8. US PSED - Profits

9. UK Pilot PSED – 2012-13
• PSED for the West Midlands will be informed by a pilot study for a UK PSED
undertaken in 2013-14 as part of the evaluation of the Start-up Loan (SUL) scheme
run by the British Business Bank1.
• A lot of activity is involved in creating a new business, but not all new businesses
require the same activities - great variation in the proportion reporting different
activities.
• Not all firms are required to pursue all activities. For example, only a minority
would benefit from acquiring intellectual property rights and only 14% report
working on this activity.
1 Paul Reynolds, Mark Hart, and Tomasz Mickiewicz (2014) “The UK Business Creation Process: The 2013
Panel Study of Entrepreneurial Dynamics Pre-test”, ERC, Aston Business School.

10. Timing of Start-up Activities?
Two activities that precede
the entry into the start-up
process.
1. Serious thought is
reported by almost
every nascent
entrepreneur (99.4%)
and it occurs on
average 7 months
before the date of
entry into the start-up
process.
2. The only other “pre-
entry” activity,
reported by 29%, is
getting another
person involved, which
occurs, on average, 5
months before entry
into the process.

11. Pre-Registration Activity?
Majority of the
activity was
implemented
BEFORE the venture
initiated the HMRC
registration.

12. Key Takeaways
• PSED will complement several knowledge exchange initiatives with policy
makers at an international, national and local level.
• It will be an important resource for the advisory roles held by the
proposers with a range of institutions at each of these levels.
• Unique dataset (PSED) will provide an invaluable resource for WM REDI
and policy, practitioner and academic stakeholders.
• The research programme will engage several business support
intermediaries on the ‘frontline’ of initiatives in the West Midlands and
further afield.

13. Contact us:
If you would like any more information about the ERC and any of its activities
please contact Professor Mark Hart (mark.hart@aston.ac.uk)
More details about the activities of the ERC and our latest events can be
found at:
www.enterpriseresearch.ac.uk