Presentation on the Research Programme 2013 /2014

1. ERC research programme
overview 2014

2. ERC’s research ambition
• ERC set out to answer one central question:
What drives SME growth?
• Key aspects designed into the programme
– Building a more contextualised view
– Emphasising leadership and capability
– Recognising different ways of growing - organic,
acquisition
– And, questioning the meaning of ‘growth’ itself!

3. … but ERC has a wider mission
than research alone…
• Research goals
– Conducting World Class Research
– Develop a multi-level, dynamic and longitudinal approach to
understanding business growth
– Building a ‘leading edge’ Hub for SME research on SME
performance in UK and Internationally
• Policy and institutional goals
– Contribute to shaping policy and strategy in the UK, informing policy
design, and through policy commentary and challenge
– To establish ERC as the ‘go to’ reference point for policy makers, the
media through long term structured engagement as well as more
opportunistic, timely policy challenge.

4. ERC Activities - overview
Entrepreneurial leadership
• Theme 1: Entrepreneurial Ambition and Growth
• Theme 2: Entrepreneurial Leadership, Capabilities and Growth
• Theme 3: Diversity and SMEs in the Emerging Economy
Strategy and Performance
• Theme 4: Finance and Growth
• Theme 5: SME Innovation, Exporting and Growth – An
Embedded Perspective
• Theme 6: Firm Dynamics, Job Creation and Productivity Growth
Emerging priorities

5. Theme 1: Entrepreneurial
Ambition and Growth
• Entrepreneurial Ambition, Resources and SME Growth (project 1.2)-
recent evidence suggests that high-aspiration early-stage
entrepreneurship is associated with subsequent macro-economic growth.
This project will examine the effect of regional, local, peer-group, firm-
level, and individual-level factors that influence both the propensity to
engage in ambitious entrepreneurship and to achieve rapid realised
growth.
• Analysis would be built around the concept of national systems of
entrepreneurship using the GEDI framework and based on the UK Global
Entrepreneurship Monitor database of around 200,000 individuals and the
Business Structure Database (BSD) which contains information on all
HMRC registered businesses.

6. Theme 2: Entrepreneurial Leadership,
Capabilities and Growth
• Entrepreneurial leadership and growth (Projects 2.2 and 2.3).
- fieldwork is now in progress with focus on role of leadership
and capabilities in shaping SME growth. Early results April
2014.
• Leadership and capability – case studies (Projects 2.2 and
2.3) – longitudinal case studies will start and run over next
two years.
• Leadership and management skills in SMEs – (BIS funded
project) to examine issues and impact on SME performance.
Early results September 2014.

7. Theme 3: Diversity and SMEs
• Mapping and Activating Support for Diverse Business Networks (Project 3.4) –
supported by a newly appointed Research Fellow at Birmingham this project this
will involve:
– (a) Mapping the landscape and barriers to development of enterprise support for diverse
entrepreneurs in five cities
– (b) Staging awareness events and acting as a catalyst for the creation of new networks and groupings
to support minority businesses.
• Understanding the Connection between Households and the Decision to Finance
and Grow Diverse Businesses (Project 3.3) - longitudinal case studies of thirty
entrepreneurial households stratified across diverse social groups to investigate:
– the factors influencing enterprise participation among under-represented groups
– variance by household life cycle and business lifecycle and performance
– perceptions of disadvantage and unequal treatment by banks and other resource providers that
inhibit participation and lead to discouraged borrowers
– how Government, banks and other agencies can increase the level of successful and sustainable
enterprise in these groups.

8. Theme 4: Finance and Growth
• Discouraged Borrowers (project 4.4 revised) focussing on the ‘arc of
discouragement’ project focuses on questions such as:
– Who are discouraged borrowers (DBs)?
– Why are there DBs?
– What are the impacts of discouragement?
– What would encourage DBs back to seeking loans?
• Growth, survival & types of firm ownership (Project 4.2) – will focus on growth
and finance in different types of companies. Research will continue through spring
2014 with a focus on family firms, spin-offs, buyouts.
• Financing early stage ventures (Project 4.3) - using German data this project
focuses on the profile of early stage funding in Germany and its growth
implications. UK analysis to follow. with an initial focus on family firms.
•

9. Theme 5: SME Innovation,
Exporting and Growth
• From knowledge to value added (Project 5.3) – will trace the pathway
from knowledge to value added in SMEs and focus on four main research
areas. Key questions are:
– What determines ‘openness’ in SME innovation?
– What are the key drivers and barriers of enhanced innovation and
exports in UK SMEs?
– What factors influence SME’s ability to successfully exploit new
innovations?
• SME Exporting and internationalisation (Project 5.3) – key focus here will
be on: persistent v. intermittent exporters, the relationship of exporting to
business owner characteristics and the speed and extent of
internationalization in SMEs.

10. Theme 6: Firm Dynamics, Job
Creation and Productivity Growth
• Firm Dynamics and Job Creation in the UK – geographical focus (Project
6.2, continued) – where does growth occur? Business demography based
on firm-level longitudinal data provides valuable insights into how the
private sector evolves over time. This analysis will focus on local areas to
examine how the drivers of job growth vary between areas.
• Firm Dynamics and Job Creation in the UK the impact of recession?
(Project 6.3) The period since 2008 has been marked by massive
economic upheaval. But how has this period affected business
demographics across the UK regions and nations? This project would
examine the ‘recession’ cohorts in the period since 2008 and their
contribution to growth. – leading to an ERC White Paper “Impact of
Recession on Firm Dynamics in the UK”

11. Emerging priorities
• A number of emerging discussions with different potential partners also
reflect other aspects of SME growth and development:
– Comparative data on firm dynamics across UK regions and countries
– Local supply chains and clustering and implications for growth –
building on recent work for BIS on clusters
– Conversations with CDFA around the growth of micro-businesses
– Rural enterprises face rather particular problems and might also be
interesting
– Medium sized-businesses what drives their growth and development?
Potential data (BIS) and action research projects