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UKBAA Midlands Investment Summit presentation. Mark Hart

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Presentation by Mark Hart to the UKBAA Midlands Investment Summit. Millennium Point. March 20th 2018

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UKBAA Midlands Investment Summit presentation. Mark Hart

  1. 1. Professor Mark Hart Deputy Director, Enterprise Research Centre & Aston Business School 20th March 2018
  2. 2. Background • Clear connection between ‘business dynamism’ and growth in productivity • But some ‘faulty valves’ in the Midlands Engine – certainly in the West Midlands • Business start-up and growth metrics reveal the challenge ahead – for both the investor community and the business leaders in the region
  3. 3. Business Dynamism – the Challenge • Initial survival and scaling of start-ups a key concern – not interested in the volume of start-ups per se – we are too complacent on that front. • Very few firms in the region that can be categorised as ‘high- growth’ or have shown evidence of scaling • Growth ambition among early-stage entrepreneurs is average at best • These ‘weak’ business growth metrics show some correlation with low levels of productivity
  4. 4. Why are leadership/management/ entrepreneurial skills crucial? • Growth Accelerator clients in England reported that the main barriers to their growth were Strategy and Management (53%) • Chartered Institute of Personnel and Development shows that nearly three-quarters of SMEs in England report a deficit in L&M Skills. Source: Hayton, J (2015) “Leadership and Management Skills in SMEs: Measuring Associations with Management Practices and Performance” BIS Research Paper No. 211, March 2015 Skills Practices Performance Leadership Skills Entrepreneurship Skills Organisational Skills Strategy Centralisation Strategy Formalisation Strategy Responsiveness Technical Skills HRM Best Practices Turnover Productivity Growth
  5. 5. Female entrepreneurs and equity/VC - Perceptions need challenging? • Despite the steady increase of women in entrepreneurship (GEM, 2017), equity investments in women-led business are still far from their men counterparts. Why??? – Demand: the male-stereotyping of entrepreneurs, and more significantly of successful entrepreneurs, can act as a hurdle for women considering applying for venture capital. – Supply: the limited presence of women among financiers is seen as a barrier to women entrepreneurs to access venture capital financing. Recent evidence of the US suggests that VC firms with women partners are 2X as likely to invest in start-ups with at least one woman on the executive team and three times more likely in start-ups with a woman CEO, compared to VC funds with no women representation
  6. 6. International Comparisons – use of equity/VC by Gender (GEM, 2015)
  7. 7. Long way to go…..? • Overall, despite the efforts in understanding the challenges faced by women entrepreneurs in raising capital to their ventures, the gendered gap in the equity capital, and also venture capital markets, is still a reality. • Many of these difficulties are deeply rooted and structural, affecting for both supply- and demand-sides, and may require interventions that go beyond the early recommendations that used to focus on improving financial or technical skills, among others
  8. 8. What also needs to change? • Developing a growth-oriented mindset within more small business leaders in the region is crucial – need to create a pipeline of demand for investment. How? Programmes abound and the Scale- up Institute provides a focus on good practice • Growth Hubs are in the local frontline of business support policy - but, need to be more explicit on how their activities connect to this agenda – we need greater segmentation of what the business support offer will be and resource it accordingly. • Challenge to the investor community – recent BBB report on Small Business Finance Markets (2018) sets out the current state of supply and take-up – regionally, sectorally and individually.
  9. 9. Questions and comments? More information at http://enterpriseresearch.ac.uk/ Contact us: Mark Hart mark.hart@aston.ac.uk This work contains statistical data from ONS which is Crown Copyright. The use of these data does not imply the endorsement of the data owner or the UK Data Service at the UK Data Archive in relation to the interpretation or analysis of the data. This work uses research datasets which may not exactly reproduce National Statistics aggregates.

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