Major Collaborative Project Final Thesis on MA Innovation Management, 2010 May. This paper aims to explore the challenges involved in the development of collaborative partnerships between entrepreneurship support organisations across the UK and to understand how to maximise the positive impact of private and third sectors on publicly-funded business support delivery mechanisms. It also seeks to identify strategic opportunities for partnerships between these sectors through a systems innovation appoach.

1. Dear Paul,
Dear Paul,
We are the first graduating year of MA Innovation Management at Central Saint Martins
and are currently in the process of organising our end of year conference. The event will
be a fast paced and exciting event featuring our ‘100 Minutes of Innovation’. I am
writing to you, as we We are theinvite you to the conference and also ask if you might
would like to first graduating year of MA Innovation Management at Central Saint Martins
and are currently in the process of organising our end of year conference. The event will
be willing to sponsor it too.
be a fast paced and exciting event featuring our ‘100 Minutes of Innovation’. I am
I should start by saying that we are only asking would like to invite you to the conference and also ask if you might
writing to you, as we for a small contribution of around £500.
Critical Evaluative Report
In return we would of course, as standard procedure, use your name on all
communication, frombe willingto the website, it too. conference we are holding at the
invitations to sponsor for the
highly reputable, Institute of Contemporary Arts on 17th June. This is on top of the
exciting part, which I I should start by so pleasethat we are only asking for a small contribution of around £500.
will explain more of, saying read on.
In return we would of course, as standard procedure, use your name on all
To give you a brief overview of the conference, the event is an invite only affair with 200
guests expected, all from the field of design andinvitations to the we have confirmed conference we are holding at
communication, from innovation. So far website, for the the
MAIM3: Major Collaborative Project
people from IDEO, NESTA, Seymour Powell and The Technology StrategyArts onto17th June. This is on top of
highly reputable, Institute of Contemporary Board, the
name a few. exciting part, which I will explain more of, so please read on.
To give you a little inside info on what to expect, a few of the strategic innovation
opportunities being presented are: a brief overview of the conference, the event
To give you is an invite only affair with 200
guests expected, all from the field of design and innovation. So far we have confirmed
people from IDEO, NESTA, Seymour Powell and The Technology Strategy Board, to
- Deconstructing current methods of trend analysis
- Using social media in innovation
name a few.
- Disruptive innovation in the fast food industry
- Organisational structures that enable innovation
- Driving innovation inTo give you a little inside
developing countries info on what to expect, a few of the strategic innovation
opportunities being presented are:
This is just a glimpse of the diverse range of topics we will be presenting. The
showcase will continue throughout the following week at the Innovation Centre at
Central Saint Martins - Deconstructing current methods of trend analysis
(21st-25thJune).
- Using social media in innovation
We are all very excitedDisruptive innovation in the fast finally showcase what we
- to be holding this event, so we can food industry
have learned throughout the course and our key ideasthatthe future innovation We
- Organisational structures for enable of innovation.
would be delighted if you are able to support the event and help us to cement
- Driving innovation in developing countries
innovation as a key topic for discussion.
This is just a glimpse of the diverse range of topics
If you think this is something you would be keen to get involved with, we would be we will be presenting. The
thrilled. In the meantime, if there is will more information you need, just let us know. week
showcase any continue throughout the following at the Innovation Centre at
Central Saint Martins (21st-25thJune).
I look forward to hearing from you at your earliest convenience.
Regards, We are all very excited to be holding this event, so we can finally showcase what we
have learned throughout the course and our key ideas for the future of innovation. We
Kata Gyetvai
would be delighted if you are able to support the event and help us to cement
- innovation as a key topic for discussion.
MA Innovation Management!
Central Saint Martins College of Art & Design!
University of the Arts London! you think this is something you
If would be keen to get involved with, we would be
T: +44(0)7903663469 ! thrilled. In the meantime, if there is any more information you need, just let us know.
E: kata.gyetvai@yahoo.co.uk
Skype: kata.gyetvai
I look forward to hearing from you at your earliest convenience.
Regards,
Kata Gyetvai
-
MA Innovation Management!
Central Saint Martins College of Art & Design!
University of the Arts London!
T: +44(0)7903663469 !
E: kata.gyetvai@yahoo.co.uk
Skype: kata.gyetvai
Kata Gyetvai
MA Innovation Management – 2nd Year
Unit 3 – Major Collaborative Project /Critical Evaluative Report
10, 637 words

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3. I. Introduction and overview
Entrepreneurship is increasingly recognised as playing a major role in economic
development, as being of crucial importance for the economy and one of the key
drivers of productivity, creating high quality jobs, successful sustainable businesses
thus assisting to the national competitiveness. Government has also acknowledged
this and has therefore targeted to establish the most enterprising society, by making
the UK the best place in the world to start and grow a small business (SBS, 2003 and
HM Treasury, 2005). The first steps for this would be to further develop the overall
productivity of the country’s existing enterprises by encouraging innovation and
growth and to increase the number of people considering to work in their own or in
others’ businesses (DTI, 2002, and HM Treasury, 2008).
People who start their business have to be sufficiently multifaceted to ensure the
appropriate management of a range of activities such as the raising of capital and
managing the production and the distribution of their products (Say, 1964), in other
words, entrepreneurs are their own managers (Hamilton and Harper, 1994). However,
entrepreneurship is often a difficult undertaking and a vast majority of new
businesses, including some of those which are innovative, fail. Entrepreneurs often
face difficulties to execute their ideas mainly due to lack of necessary resources. Yet,
research indicates that financial resources, as one of the most crucial elements of
achieving success, have a direct and significant effect on chances of start-up success
(Jayawarna et al., 2007), therefore providing reliable specialised assistance is vital.
This paper aims to explore the challenges involved in the development of
collaborative partnerships between entrepreneurship support organisations across the
UK and to understand how to maximise the positive impact of private and third
sectors on publicly-funded business support delivery mechanisms. It also seeks to
identify strategic opportunities for partnerships between these sectors through a
systems innovation appoach.
The study first synthesises the findings of recently published quantitative and
qualitative studies through a comprehensive literature review to analyse they key
discourses, economic and entrepreneurship policy trajectories. This aims to identify
! E

4. how innovation in community-oriented enterprise support models can be understood,
encouraged and enabled to stimulate entrepreneurship and help innovative businesses
to succeed. Next, the paper identifies possible connections between entrepreneurship,
enterprise policy, innovativeness and economic development comparing the existing
business support organisations questioning whether services and support activities
delivered by government bodies or by emerging private organisations, led by
experienced entrepreneurs, are able to encourage and effectively support the next
generation of entrepreneurs. The main empirical research section observes what the
most common reasons are why new ventures fail and how entrepreneurship support
organisations currently work to address these issues1.
The study also presents findings of the collaborative field research undertaken with an
external host partner, the National Consortium of University Entrepreneurs
(NACUE), which provided direct insight into an innovative approach of niche
assistance with possible universalisable collaborative support practices for all levels
and types of enterprise support organisations across the UK. In the next chapter, a
number of strategic innovation directions are discussed, also presenting the related
uncertainties around them. Lastly, the final chapter gives an overview of the key
insights and also addresses some questions for further research.
Context Setting - Recession Recovery with Entrepreneurship
The current global financial crisis has shocked the business world, including the
governments of the most developed countries and enterprises across the globe with all
its worst recessionary aftereffects. While optimistic news suggesting that the
downturn is almost over, economists still see a reasonable risk of a W-shaped or
“double dip’ recession. Even though some of the latest financial reports suggest that
the economy gradually expands from the recession successfully, chances are still high
that after a relatively short period of growth, the economy could relapse into recession
again.
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5. Despite the current economic situation and the uncertain financial climate a forward-
thinking attitude from both, government and private sector activists can be noticed as
a part of the UK’s entrepreneurial campaigns and recession recovery activities. Some
leading organisations in the innovation space, such as for instance NESTA, claim that
they believe innovation and new businesses are crucial for the recovery. Nevertheless,
historical evidence suggests that some of the most successful businesses, including
Skype and Microsoft for instance, have either been founded or flourished during
downturns. Aspiring entrepreneurs have to think even more creatively, while they also
have to move fast after starting up, until bigger, more established businesses re-think
their business models, to access critical market share resulting an even more powerful
growth later, during the economic recovery. This is classic Schumpeterian ‘creative
destruction’ (1942), one of the most powerful processes driving economies. As a
result, the UK also needs more start-up businesses, which see the current economic
recession not only a problem but also an opportunity to pursue new market
opportunities. For this, the government needs to encourage an effective collaborative
infrastructure that supports entrepreneurship.
II. Literature Review
Theories of Entrepreneurship
If we look at how to best stimulate entrepreneurship in the UK, before we can
consider designing an accurate support system, we first need to outline this discourse
by defining a few terms related. The word ‘entrepreneur’ origins from French verb
‘entreprendre’, which means starting or undertaking something, which challenges
someone to take and achieve goals through this. This definition does not refer to
starting a business, but it can be any challenging task, which involves starting
something new. We can therefore question whether entrepreneurship has to be
innovative or create innovations at all then? To answer this issue we need to start with
examining some of the most relevant scholarly references. However, it appears that
! 6

6. there are some inconsistencies in the literature about the definition of both
‘entrepreneur’ and ‘entrepreneurship’. While there is a wide range of definitions of
enterprise, entrepreneurship and entrepreneurial people, their meanings are often
unclear which can cause considerable confusion. Bridge et al. (2003) looks at
‘enterprise’ at a range of different contexts and indicates that it has a narrow meaning
- which is simply used for small businesses and the activity of starting and running a
small business, while the broad context describes a set of personal qualities which are
essential for venturing. SFEDI2 defined Business Enterprise for the qualification
regulators (Robinson, 2008) as both the business created by the entrepreneur and a
process. The process appears to be both creation and innovation, which can lead to an
enterprise.
As entrepreneurship is taking new forms it is increasingly less individualistic and
more collaborative (Leadbeater and Oakley, 2001). Entrepreneurship support, aiming
to create more quality outcomes, also needs to become more collaborative. If we
consider the facets that influence entrepreneurship, it appears to be three core factors
there, cultural, political and economic conditions, which are interconnected and
influence an entrepreneurial system (Bridge et al, 2003). These are fairly complex
areas where much effort is needed in order to improve the conditions of people
considering to set up their own ventures. Bridges’ contemporary definition (2003) is
applicable in many contexts: which comprise entrepreneurs who are involved with
high-potential or so called ‘Gazelle’ businesses and people who are starting
entrepreneurial small businesses and employees being intrapreneurial who initiate and
undertake something new.
In addition to industrialisation and job creation, entrepreneurialism can emerge in
those areas where good positive role models appear in the society contributing to
establish an ideal climate build on previous innovation or creating disruptive
solutions. While Gartner (1985) has seen entrepreneurship as new firm creation,
others in more recent works such as that of Kuratko (2005) and Collins et al (2006)
among others, do not define entrepreneurship as starting a new venture. If we consider
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7. this theory, the need for business support for entrepreneurs therefore cannot be
directly linked and if this were true it would be fairly hard to explain those figures,
which show a direct relationship between enterprises and economic growth
(Schumpeter, 1943). On the other hand if we accept the entrepreneurs are those who
successfully start-up and grow businesses, we can ask what would differentiate these
businesses from those already exist. Schumpeter advanced a definition that advocates
innovation and innovativeness, which determine whether a business can make a real
change contributing to the economic development (Schumpeter, 1934). This
philosophy resonates with later research done by Bird (1989), who argues that
entrepreneurs, not only must be innovative when they set up but also to be able to
constantly create solutions for issues that can occur anytime. This is entrepreneurial
attribute is vitally important in today’s highly competitive economy thus more
knowledge, action and support is required to enhance the levels of innovative
entrepreneurship.
Policy trajectories
As small and medium sized businesses were recognised as micro-drivers of
innovation and economic development (Acs 2006; Audretsch et al. 2006; Thurik et al.
2008), fostering entrepreneurship and innovation became a global challenge, that
every country have to face if they want to increase their national competitiveness.
While entrepreneurship policy is emerging as an important area of economic policy
development (Lundström and Stevenson, 2001, 2005), it appears to be a not a very
well-defined policy area3. In addition, there seems to be some confusion about what
enterprise policy means as result of unclear definition for entrepreneurship too.
Governments are challenged to create and execute policies, which can create an
appropriate environment for businesses to flourish. As the UK standards setting body
for Business Support and Business Enterprise (SFEDI) notes, these policies have to
ensure that publicly funded support is integrated with that provided by the private
sector (Robinson, 2008). Robinson’s research (2008) is significant in that it brings
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8. depth and context to a new and fairly under-researched area of collaborative business
support literature. While he argues that there is more need to encourage collaboration
between business support providers across sectors, he also emphasises that for a
vision for a wider support strategy “feedback from entrepreneurs is available to help
identify what works best for the business enterprise community in supporting their
learning and development and delivering business benefits” (Robinson, 2008, p. 27).
A great deal of academic and industry interest today concentrates on assessing the
relationship between entrepreneurship, enterprise policies, innovativeness and the
impact of the relevant policies on the business enterprise community and economic
development. Government and regional level policies are designed to assist and
promote entrepreneurship within and between organisations in the private, public and
third sectors. Although policies have been developed in the UK over the last four
decades to create an environment for enterprise, differences can be seen in terms of
the focus of these mechanisms. In addition, a shift in creating support structures has
emerged as more attention from policy making has been centred lately on the
individual rather than the organisation (Boter and Lundstrom, 2005) developing
crucial instruments to stimulate economic growth4.
Today, the challenge is how the practical focus of these public policies can cover
developing successful enabling tools building an effective support infrastructure that
encourages and assists more people to start-up and grow innovative ventures. To
address these needs this study will first examine what mechanisms could ensure this,
and what the role of Government should be.
The Role of Government in supporting businesses
This has been a highly debated topic, as it is a both political and economical issue. A
political issue because the strength of participation (or absence) of the state is one of
the most important totems of the political left and right. Small business and
entrepreneurship support literature have been criticising governments for their
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9. imperfect policies and business support. Clearly, in order to stimulate economic
growth, policy-makers must take an active role in making the occasionally painful
reforms needed to help stimulating entrepreneurship. While creating a business-
friendly culture and ensuring a healthy and growing economy is vital, it also seems to
require a delicate balance of intervention. This argument can be taken to another level
of complexity of course, however identifying what Government could certainly do to
effectively use its resources, appears to be helpful.
A number of studies question whether or not these approaches are effective in
stimulating enterprise. Another frequent concern is whether these instruments have
any overall economic impact and how these can be effectively measured. This is an
important question, however delivering quality business support need not only be
seen as the public sector’s responsibility. While some argue that the best thing that
government can do is to completely dissociate itself from businesses support
activities, there seems to be a much more optimistic view emerging in the literature
highlighting the importance of partnerships in enterprise support operations.
As defined by Mann et al. (2009), the objective of these partnerships is to provide
creative solutions to complex public service concerns that require a multi-sectoral
approach, which can therefore provide the most innovative and sustainable solutions
while having the biggest social impact5. Campbell and Keck (2008) highlight the
importance of networks and community-based support by also stating that business
support is not only a public-sector phenomenon:
“If young entrepreneurs need start-up capital, social networks and mentors, government is
not the place to go. The future face of enterprise increasingly entails a partnership
between business and government, each with its own strengths. In order to reinforce this
partnership, business leaders (especially at the local level) can transform their company’s
role in society by giving time, money and advice to foster the economic agency that is
often already strong within these groups” (Campbell and Keck, 2008, p. 133-134).
Professor Lerner (2009) discusses the requirements of effective public sector
interventions in the businesses’ sector, by focusing exclusively on new ’Gazelle’
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10. ventures and the related policies for stimulating them. The author finds that apart
from the most fundamental job for government, to recognise the real needs of
businesses, education, recognition of institutional problems and the realisation of its
support programmes are equally critical, but remain challenges (Lerner, 2009). It
seems from this discourse that sometimes programmes needs to be redefined or even
killed, just like in an innovative organisation6.
Further intervention programmes came later, which accelerated the creation of
clusters leading to the formation of relevant support organisations, research firms and
many public-private partnerships (Guardian podcast, 2010, Lerner, 2009). This
obvious example shows that few decades later the UK might successfully be able to
follow the US way to intervene and support entrepreneurship; however public policies
supporting entrepreneurship need to target appropriately forming businesses’ needs
through clear, long-term strategies. In addition, it also appears that a healthy and
active venture capital market is the main criteria of creating an entrepreneurship-
centred economy (Harrison and Mason, 1996). In addition, as evidence from study by
Luke et al. (2004) suggest that informal investment networks are exceptionally
essential during a firm’s pre-start-up, start-up and early growth stages of
development.
Policy Dilemmas
While previous research shows that a well functioning policy framework generally
needs to encourage the most extensive entrepreneurship engagement, some studies
(for example NESTA, 2009) note, that focusing specifically on the creation of high
growth firms is highly critical. This however evidently necessitates a costly system as
policies aiming to focus on both high number of small enterprises and high-growth
potential businesses are typically very expensive and hardly feasible (Clarysse et al.,
2005 and Mustar, 2001). For instance, according to the observations of Clarysse et al
(2005), any initiative to support incubators that help innovative entrepreneurial
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11. academic spin-offs is to be welcomed, however without having the required resources
to implement them, expensive policies do not seem to be too effective (Lindholm and
Stevenson 2007). Furthermore, the findings from the literature examined suggest that
as policy-making for innovative entrepreneurship is emerging, much more clarity and
consistency is needed to prioritise for a cost-effective policy structure. Consequently,
a system, which effectively uses the right measurements, seems to be vital in order to
balance and implement separate set of policies for both innovative and less innovative
enterprises.
Support Programmes and Organisations
There are an extensive number of business support organisations delivering
entrepreneurship support in the UK. These enabling firms and agencies come across
all sectors, namely from government and public sector agencies, private and third
sector organisations forming a fragmented infrastructure. These include mainstream
business support sources, public sector bodies, university societies, further and higher
education bodies and commercial support providers e.g. solicitors, accountants and
consultants. While it seems to be hard to find a universal description, according a
comprehensive definition by the East Midlands Development Agency, business
support is “any activity that supports the creation and survival of businesses, increases
SME profitability and assists business development and growth, which incorporates
information, advice, training and consultancy” (Gemmell, EMDA, 2009).
Publicly funded business support and advisory services in the UK have been given to
nine Regional Development Agencies7 (RDAs; see Appendix 2) with the aim of
offering a more locally focussed service (HM Treasury, 2004). Support programmes
and their implementation ultimately lie with them and their partners. While the most
visible support role is that of the Business Adviser (Downing and Thompson, 2007),
research indicates that the most commonly used type of advice by businesses comes
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12. from private sector sources such as accountants, lawyers, bank managers or staff, and
consultants (LDA, 2006).
Following the restructuring of Business Links (BL), they are now designed to operate
on the ‘Information, Diagnosis and Brokerage’ (IDB) delivery model. Since 2005, it
no longer delivers direct entrepreneurship support, but instead simply responds to
enquiries, provides basic information, measures support needs, and finally signposts
to the most suitable support which also allows businesses within regions to consider
all their options. While this has been a considerable improvement in the support
system (Mole, 2002), several studies have expressed significant criticism. A Warwick
analysis by Mole et al. (2009), based on data from over 3,000 UK companies - using
significant employment growth models, BL was found generally positive and
efficient. Recently, the Department for Business Enterprise and Regulatory Reform
(BERR, now BIS) commissioned FreshMinds, an independent Research Consultancy,
to carry out a study to investigate the factors that determine perceptions of Business
Link. The study shows that businesses and wider stakeholders remain unclear about
what the current service model offers is in terms of what is provided and how (BERR,
2009). In a Viewpoint publication Herriot and Kingham note that (2009) despite the
complete redesign and rebranding of Business Link, at grass roots level it still comes
in for considerable criticism and it is questionable whether the service represents
value for money.
Another study (Leadbeater, 2007) noted that while products and services varies
widely depending on the location of the business client which therefore results to
issues of inconsistency of coverage and quality, in some cases we meet inadequate
business expertise too. As a radical study, the Richard report (2008) Richard Report8
points out, although significant segment of BL services are now brokered to private
sector experts, the cost to government is still huge, arguing that the RDAs during the
studied period had too high operational costs while they only spent a significantly
small amount to actually assist their clients (Richard, 2008). He also added, that this
could have resulted from the fact that it only operated a limited number of small
business support schemes (Richard, 2008). While this is an economic issue, brokerage
Q
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13. can often turn to be a less pleasant experience for customers if redirected to private
adviser, where most free support suddenly disappear (Downing and Thompson,
2007). The core issues remain regarding how to have clarity within each region about
which agencies provide what support at each stage of development. In addition,
despite quantitative targets being met, public sector evaluation could consider some
rather more qualitative measures when evaluating business support.
In order to simplify its current offerings the government has announced (BERR,
2006) the Business Support Simplification Programme (BSSP) to reduce the current
confusion of publicly-funded business support schemes from a fairly big number,
3,000 to no more than 30 by this year, 2010. In terms of the overall simplification, as
the Richard Report sensibly points out (2008) business support policy should clearly
reflect on the difference between providing information and expert advice or support.
National issues in policy-making, in addition to balancing generic contra targeted
approaches, include creating and maintaining a simplified framework encouraging a
more dynamic early-stage enterprise market by improving access to funding for
innovative start-up businesses.
Main issues raised against public sector business support infrastructure therefore
include enabling effective brokerage, better understanding from BL and RDAs of the
market (including accurate segmentation (Leadbeater, 2007)). Finally there also
seems to be a clear need for improved quality of enablers (BERR, 2009) who should
question more often what they do (Downing and Thompson, 2007) to be able to
improve if they feel they need to deliver a better quality support. Although this
appears to be a problematic issue.
When it comes to mentoring, business owners tend to value most the advice of those
experts who have actually ‘been there and done that’. There is an ongoing debate on
whether public sector enablers have sufficient personal experience in providing
advice that required (Downing and Thompson, 2007). However in most of the cases
across all critical knowledge areas, people who turn to professional business support
providers, do not know what they do not know (Downing and Thompson, 2007;
Robinson, 2008). These knowledge-sharing practices however need specialised
! ?E

14. management activities to facilitate better communication and accurate problem
solving.
In addition, Luke et al. notes (2004) that research on innovation systems has recently
illustrated that networks and therefore creative partnerships have an impact on
innovativeness, moreover that “innovation occurs more effectively where there is
exchange of knowledge between systems, for example: between different industries;
regions; or between science and industry (Kaufmann and Tödtling, 2001)” (Luke et
al, 2004, p. 18). Now we need to examine how networks and partnerships can assist to
innovative ventures. In order to do so we need to understand what their needs are.
Discourses of key literature on similar issues will be presented bellow, completed
with observational research in the next chapter.
The Needs of Early-Stage Businesses
In studying literature on what support early-stage ventures need that it appears to be
consensus that businesses have different support needs at different stages of
development and maturity (BERR, 2009, NESTA, 2009), however other studies
highlight (Norrmann, 2008; Lindholm-Dahlstrand & Klofsten, 2002) that support
activities often needed not always are met by the support currently provided.
It appears, that one of the most common reasons why ventures fail are related to two
main obstacles: issues in getting the idea funded (Norrmann, 2008; Campbell and
Keck, 2008) and lack of accessible mentorship (for example CBI, 2006), and
difficulty of obtaining finance is the most frequently mentioned barrier by those who
are trying to commercialise their innovations (Storey and Westhead, 1997; Westhead,
1998). External sources of early-stage finance for small ventures in the UK include
conventional sources of debt finance such as using own assets, raising or borrowing
money from family and friends or through personal bank or small business loans,
using proof of concept funds or grants. However, for many of the most innovative
young businesses it is inherently difficult to obtain the required early-stage capital,
! ?A

15. due to their resource intensive product and business development. It is also true that
very often before their outcomes can be commercialised, relatively large financial
resources required up-front (NESTA, 2009; Pierrakis and Westlake, 2009.).
Additional observation by Carpenter & Petersen (2002, cited in Norrmann, 2008)
suggest that the reason why ventures fail finding financial support origins from
‘information asymmetries’ that are simply caused by communication issues between
two parties. However, at the same time, there is remarkable transformation taking
place in the attributes of the services provided in response to the current issues and
strategic opportunities opened by the knowledge economy:
“Web 2.0 creates so many possibilities for providing advice and support for businesses and
educationalists wanting to run effective enterprise-related curricula. Technology can support
the desire for personalised, user-generated, on-demand support meaning that top-down,
generic approaches to offering business and enterprise support are no longer sufficient”
(Grigg and Buonfino, 2008, p. 155)
Summary, Reflection
Downing and Thompson (2007) make an important point observing that players for
the support system should acknowledge that enterprise support is not a ‘one-size-fits-
all’ process or activity, but indeed it requires more attention (Downing and
Thompson, 2007). For this reason successfully implemented design principles are
needed. In the light of the evidence in this chapter my findings are as follows. As
business support services tend to centre more and more on individuals rather than
businesses, which a is noticeably less complex approach, enterprise support moves
towards connecting individuals to broader knowledge, networks and experience
(Grigg and Buonfino, 2008). In the light of these developments, initiatives and
trajectories discussed by reviewing relevant literature and examination of evolving
narratives and theories relating to themes above, the following questions are clearly
salient and deserving of our attention: How can the UK’s business support community
assist early-stage business the most effectively? And how can the business support
community better collaborate for more accurate and targeted support? Finally, how
! ?6

16. do UK entrepreneurs articulate what is needed to help them forming and growing
successful innovative businesses?
In order to gain a deeper understanding of entrepreneurs’ real needs and to enable
greater efficiency in business support at both national and regional levels, sharing best
practice within and between sectors in addition to more collaborative and creative
thinking is seemed to be required. Thus private and public sector organisations and
other support communities need to consider innovative ways to share knowledge,
extend their networks and therefore join their resources for a wider, interconnected,
co-operative community based sustainable infrastructure.
III. Observational Research
By analysing the biggest problems that small and medium sized companies face, apart
from regulations and bureaucracy, are lack of business advice and difficulties
accessing working capital for their ventures.
Desk research and interview data illustrated that very often users do not engage with
government-funded intermediaries such as Business Link (BL), as a result of
confusion. Secondary data suggest that business owners seeking professional advice
are often confused by the existing offer and unaware of how to access it (2002,
CEML; BERR, 2009). As a recent EnterQuest Business survey indicates (2009),
entrepreneurs who used public-sector services over a third (35%) of the surveyed
were not very satisfied or totally unsatisfied with BL, while 44% were not satisfied
across all types of local business support provision. In addition, both desk research
and working group discussion data suggest, that most of the approached people tend
to trust more in private versus public sector service provision.
Interviews conducted with leading figures in the entrepreneurship support space show
that the general public perception of public sector services appears to be fairly
negative, which probably results from the fragmented nature of the market place. One
particular interview revealed that each of the RDAs have entirely different ways to
! ?H

17. provide support which can be argued whether it the most appropriate approach.
Inconsistency in both the support brands and the level and quality of the provided
support can lead to similar observations gained via primary survey and entrepreneur
working group discussions data, highlighting that most of the people who are seeking
business advice or financial support do not now where to turn to. On the other hand,
debates are also ongoing concerning whether business support policy and delivery
need to be driven locally, regionally or centrally. It can been seen from a recent
survey conducted by Cobweb (2009) that some UK business advisers claim that every
local authority area is different in their needs and the general consensus is that it is not
possible to create a satisfactory ‘one size fits all’. However, it would be interesting to
examine whether new strategies can be implemented by setting policies regionally but
delivered them through local agencies.
Although it is not the main purpose of this paper to pursue these issues in detail and to
analyse what leads to here, it is worth considering to identify what people really
expect from enablers and how support mechanisms across all levels and sectors can
be improve. Both survey and research discussion data point towards a clear need for a
more demand- instead of the current largely supply-led support framework from the
public sector provision’s side. While challenges remain at the policy level, the
majority of the interviewees for this study indicated that there is need to move away
from public sector approaches especially in terms of financing new businesses. They
all agreed that the role of public sector need to be limited while community-led
support encouraged.
According to one interviewee there is need for government to examine where the
market fails and to only concentrate on those areas. While there is a tendency toward
such thinking the main problem is whether or not public sector providers know what
their customers really need. While secondary data shows that some business advisers
believe that none of the parties seem to have any understanding of industry needs
(Cobweb, 2009) research generated from own interviews and working group
discussions also showed the majority of support providers, primarily including public
sector support enablers, do not research their potential users before introducing a new
support programmes and schemes. As a result, this study next aims to observe what
! ?:

18. the needs and the blockages to the support of various client segments are and what is
required to be able to better support innovation through entrepreneurship.
Two major observations can be made based on the analysed empirical data, resulted
from both primary and secondary research. These observations can lead to some
interesting insights indicating imperfect channels of communication, across all levels
of business support.
Funding finance
First, despite the myth surrounding investor behaviours and investment activities a
particularly considerable finding is that while most business angels in the UK want to
invest more, they cannot find sufficient investment opportunities that meet their
investment criteria (Buckland and Davis, 1995, Mason and Harrison, 1995). By going
out and talking to a wide range of investors from the active business angel, private
equity and venture capital communities, discussions have also echoed this point.
While at NACUE, research was conducted in order to identify what issues early-stage
young entrepreneurs and institutions face, in terms of their needs and expectations to
receive and provide entrepreneurial support and to explore how the solutions can be
delivered. There also appeared to be some key strategic opportunities generated from
NACUE Study Group research project to identify whether there are clear ‘gaps’ in
provision. Responses to the question regarding the single biggest barrier to the future
success of existing entrepreneurs’ businesses reveal that many of the surveyed young
entrepreneurs do in fact perceive that they face multiple challenges. According to the
surveyed existing entrepreneurs, legal agreements, business finance and sources of
finance as well as contacts with mentors are the most needed areas of assistance.
Looking at the single biggest obstacle to the future success of existing business, the
highest overall scores indicated funding (27.27%) which as respondents claim often
includes cash flow problems too. The survey also included a question about the
perceived unmet need for support which illustrated that about one third of the
! ?=

19. surveyed business owners would require assistance with accounting (34.4%),
followed by accessing funding including applying for public grants and schemes
(25%) while around the same percentage of them also highlighted that they would
require business mentoring and help contacting investors (see Figure 1). All of these
data suggest that helping entrepreneurs to access and mobilise the financial and non-
financial resources needed to start-up and grow a business is vitally critical.
!
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The survey also showed significant importance in the use of electronic sources of
information. 75% of participants rely on the Internet versus business support
organisations (nearly half, 48.5%) or development agencies (27.3%) to find relevant
support for their ventures. Other useful resource named was the British Library’s
Business and IP Centre, where useful business information appeared to be easily
accessible. The majority of the interviewed enterprise enablers found new and more
interactive ways of support provision, such as online tools and resources, very
interesting and efficient, however all of them claimed that in terms of providing
finance for potential businesses, traditional interaction methods, such as face-to-face
pitches and negotiations, are not likely be transformed into anything else in the near
future.
! ?I

20. Looking at the investor side, most of the surveyed investors, (82.6%) engage with
funding seed and early-stage ventures (which tends to be mainly IT, communication
and clean-tech investment), over the half of respondents perceive that university
entrepreneurs are often not investment ready and sometimes lack of sufficient
entrepreneurial experience (44%). In addition, the vast majority of the respondents
(67%) state that young entrepreneurs do not know how to approach investors (see
Figure 2), while one in two investors believe that university entrepreneurs are often
poor in scaling their start-ups9. All of these evidences suggest that there would be a
need for investment-readiness education in addition to developing strategic early-
stage advice services.
!
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When investors were asked to name the single biggest obstacle stopping them from
backing university entrepreneurs, responses included lack of relevant commercial
experience of the management team. In addition, intellectual property issues were also
mentioned to be obstacles to invest besides the general view from the investor side
that entrepreneurs need to apply first. This leads to an interesting observation
presenting that they would prefer using simple, secure and more convenient facilitator
9
However, there has been some positivism regarding the opportunity for support organisations to create an
appropriate environment in order to facilitate more investment in early-stage ventures. One respondent comment
highlighted that it would be valuable to create a process, which enables student entrepreneurs to constantly
evaluate and develop their ideas during the pre-start-up phase completed with providing early-stage guidance and
mentoring to help them to examine all issues involved setting up their businesses and to prepare the how to view
and mitigate risks around their ideas or business as seen by real investors.
! "@

21. tools. As a part of this ‘simplicity and quality’ trend, nearly one third of the surveyed
investors indicated that they would use services related to filtered quality propositions
presented by young entrepreneurs during investor events, while around half of the
respondents would also use an online business plan pre-selection service. These
findings regarding investor preferences for potential service tools were re-tested on a
working-group discussion where the outcomes showed very similar results indicated
by the survey.
The challenges of accessing advice
Second, as the Internet has become more prevalent, entrepreneurs experience no
shortage of information, however there is still shortage of experience. As the last
years’ EnterQuest Business Survey demonstrates (2009), what frequently
disappointed the most surveyed entrepreneurs was that the advisers did not understand
their business or their industry and there also seemed to be a lack of understanding of
local business needs. In addition, it was also reported that some people were
dissatisfied as there was no new advice given. The majority of the interviewed
enablers agreed that the quality of advice given could significantly be improved by
engaging more experienced entrepreneurs who can act as the vital catalysts to
facilitate growth to happen.
However, as data generated from discussions with key figures from some of the
existing business support organisations, shows that there are a number of existing
models, which might be useful to (re-) implement in the UK. Adoptable models could
be based on best practice by looking at what already worked abroad or even in the UK
in the past, as some of these mechanisms despite their success were either abolished
or just not implemented accurately. One of the previously used successful models,
which was also frequently mentioned by many of the interviewees, involves a wider
use of non-executive directors or personal business mentors. General perception is
that commercial support services tend to be fairly expensive, however there was a
successful public sector example delivered by the NFEA’s ‘Business Volunteer
! "?

22. Mentors’ programme10, whereas successful entrepreneurs provided invaluable
experience for new business founders.
Data shows that this model, where entrepreneurs can access hands-on business advice
provided by ‘trusted individuals’ preferably by experienced business people appear to
be the most successful one. Looking at data generated from the population of young
founders from survey conducted at NACUE, it can be seen that entrepreneurs tend to
value other successful entrepreneurs’ advice most, while for 48.5% of the
respondents, this also means the most preferred source of assistance. According to
another qualitative research (Cobweb, 2009), often relatively short sessions with
experts are worth much more than with those who are not. Therefore, developing a
supporting framework that allows these ‘golden 5 minutes’ accessible, as short
support sessions easily and accessibly seems to be vital. Likewise, in terms of
knowledge sharing, data also shows that most of the surveyed entrepreneurs appeared
to be extremely collaborative. A strong majority, about 88% claimed that they would
be willing to help the next generation of entrepreneurs through an entrepreneur-led
effort to encourage and support others.
Bringing all these facts together, it can be observed that more emphasis needs to be
placed on promoting the concept of mentoring as an enterprise development tool.
Summarising both primary and secondary qualitative findings reveal that
collaborations can be realised to enhance existing support in two different ways. First,
there could be more collaboration among business support organisations across all
sectors but there is also a need for more effective peer group support approaches
where successful entrepreneurs who can provide an excellent pool of mentors and
often investors too, support the next generation of entrepreneurs by sharing more
knowledge and providing the required resources. In terms of strategic solutions, the
survey also revealed that a great majority, 66.7% of funders would welcome
programmes, such as events as part of a holistic support framework, where they could
10
The Business Volunteer Mentors programme (BVM) was run between 1999 and 2006 by the DTI (now BIS) as a
national programme that placed business mentors into businesses that needed this type of help and advice. While
there was no charge to the business for this support, the BVM also provided access to a wide range of specialists
drawn from a variety of business and professional backgrounds that could help support the growth of enterprises.
Most of these mentors were experienced business people who were willing to give up some of their own time to
help others.
! ""

23. develop knowledge and understanding of the different types and sources of funding
(e.g. Grants, Venture Capital and Angel funding) for their enterprises11.
Observation – NACUE, a Unique Collaborative Model
Starting from conceptual pre-understandings, while conducting an initial research
plan to test initial hypothesis, various entrepreneurship support organisations were
researched across all sectors. Furthermore, the undertaken collaborative field research
experience provided invaluable opportunities to study and analyse the life of the
social group (of entrepreneurs) via a combination of ethnographic and case study
approaches. Observational evidence resulted a much better understanding on
identifiable arguments and patterns. For a more comprehensive overview of the
methodology regarding observational analysis and the overall research process, please
see Appendix 112.
The National Consortium of University Entrepreneurs (NACUE) is a national
organisation that stimulates university enterprise by supporting and representing
university enterprise societies and student entrepreneurs across the UK. Its mission is
to build a youth entrepreneurship culture that is sustainable, collaborative, inclusive,
and global driving the growth of entrepreneurship across the country, while its core
philosophy is to be innovative and be recognised as the best in class by delivering
excellence in quality within the entrepreneurship support market. NACUE is a
grassroots organisation developed for young entrepreneurs by young entrepreneurs
that commits to collaboration. It is also an innovative example of an effective multi-
stakeholder partnership what NACUE has developed through its organisational
model, realising that entrepreneurship support requires a multi-sectoral approach. Its
aims are to inspire, educate, train, support, connect, and develop enterprise through
11
Just over half of young business founders stated that they know how to effectively attract the attention of
business angels and venture capitalists and the majority of these people (75.8%) would also like to take part in any
programmes where they can develop their pitches and learn more about the VC process or their exit strategies.
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24. societies and an incentivised participation model, connect with the wider enterprise
community through its stakeholders and networks including Enterprise Alliance
UK13, to influence decision makers on enterprise and promote enterprise on an
national and international level.
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25. By opening communication channels, providing national programming and
supporting enterprising students and early-stage start-ups engaged with university
enterprise societies, NACUE developed an enabling entrepreneurial ecosystem (see
Figure 3) to stimulate the growth university entrepreneurship. The organisation works
for enabling student entrepreneurship and intrapreneurship through programming,
mentorship and access to funding. While it works directly with enterprise societies
daily14, it is positively viewed by all of its stakeholders. It creates its programmes
based on a user-centred entrepreneurial support strategy, where society leaders, who
are entrepreneurs at the same time, are actively involved with developing business
and communication strategies. It is also a great model of Multi-stakeholder
Partnerships (MSPs) (see Figure 4) as NACUE has recognised that for stimulating
university entrepreneurship as complex public service concern requires a multi-
sectoral approach.
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26. The organisation also develops strategic relationships across all sectors to collaborate
more widely, therefore it has also partnered with the National Council for Graduate
Entrepreneurship (NCGE) to stimulate enterprise across the South-East of England
through the University Enterprise Networks (UEN)15, which represent a good
collaborative partnership model and is based on the US Kauffman Foundation
experience. The network is currently being established across England, to stimulate
the development of sustainable partnerships between education, government and
industry (for enterprise development) that enhance the contribution of enterprise to
our future economic prosperity and to increase the number and sustainability of start
ups.
NACUE Ventures - a ‘Learning by Developing’ approach
Young entrepreneurs who are under the age of 30 and seeking funding are notorious
for not understanding how the funding ladder operates, as well as not being able to
easily access investors. The case is similar for investors who do not have a one-stop
shop for young entrepreneurial investment opportunities. This is especially true where
university entrepreneurs are concerned, since institutions are very protective over
their pioneering outputs (see Figure 5). While there are a number of ways linking
entrepreneurs and investors, none of the existing investment networks focuses on the
niche of young entrepreneurs specifically. NACUE Ventures aims to help young
entrepreneurs to access and mobilise the financial and non-financial resources needed
for their early-stage ventures.
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27. !
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Using a design research approach, NACUE has also implemented an innovation
session on one of its recent conferences for a practical behaviour and customer need
analysis, by creating an open space for discussion. Young entrepreneurial attendees
were asked to participate to co-develop various creative, viable methods for NACUE
Ventures assisting young start-ups. The challenge consisted of four parts: introduction
and outlining the innovation brief identifying and summarising specific unmet needs
and main issues regarding the current NACUE Ventures model16 in relation to the
overall existing business support market, followed by group formation, ideation and
co-innovation with entrepreneurs, and finally business development with the
presentations of opportunities. At each stage, all groups’ feedback was used to judge
and prioritise the ideas, leading to a few selected ones discussed it the next - strategic
opportunities evaluation chapter.
Similar user-led project can be identified in the wider support environment through an
interesting recent example implemented by The Council for Excellence in
Management and Leadership, which has researched into drivers of perceptions of the
existing business support and created recommendations for fellow entrepreneurs
trough an SME Entrepreneur Working Group, developing strategic opportunities,
which would meet their needs. The participants identified a need for effective network
of intermediaries (CEML, 2002), which could be recruited from the public and the
private sectors setting up accountability, governance and monitoring framework and
also to build up a qualitative sign-posting system, which would be easily accessible
online and through other media.
Having invaluable dialogue with young entrepreneurs, who were in the process of
raising capital or had recently raised capital, NACUE has identified a few selected
strategic opportunities, which include for instance building and online ‘wiki’ to
systemise all the essential information about financing businesses, developing an
idea-hub, a periodical live forum or an interactive ‘flash’ showcase tool for IP-
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28. protected venture ideas and investment-ready business propositions. These innovation
directions were further analysed by the NACUE Ventures Team and the analysis and
synthesis of the main findings can be found in the following chapter.
The purpose of this observational analysis was to look at specific challenges in the
context of innovative ways of collaboration within the business support market. The
outcome of this step provided a deeper understanding of user needs. The following
chapter aims to analyse the specific collaboration challenges between NACUE and its
stakeholders and via scalable strategic opportunities, which could also help to
maximise the efforts of public-private sector partnership in the wider context of
business support.
IV. Evaluation of Strategic Opportunities
Strategic opportunities generated on the basis of observational data presented in the
previous chapter can be divided into two main categories. Both of them are based on
the core theme of collaboration within the area of entrepreneurship support.
However, whilst the first set of innovation directions tends to focus on a rather macro-
level organisational area of collaborative partnership opportunities, the second is
organised around a more community-centred approach. These strategic solutions are
also examined on the basis of riskiness in order to ascertain whether these
transformational directions and their related risks can be managed.
From observational insights collected when looking at how NACUE could stimulate
more entrepreneurship in the UK, the organisation has already developed some tools
to address the main issues discussed previously. In partnership with CmyPitch.com
NACUE, through one of its three organisational units NACUE Ventures, has
developed a modern support tool for entrepreneurial ventures coming out of NACUE
Groups to help them to obtain access to funds for their ventures. It has operated as an
online platform facilitating connection between student ventures looking for funding
and VC firms, business angels and their networks. This online platform also acted as a
new, social network specialised for small innovative businesses, founded by
! "=

29. university entrepreneurs, and aimed to connect them to sources of funding,
information, advice, opportunities and further vital services. The joint venture
between the two companies was formed to help entrepreneurs to their innovative
products and services to the market more quickly and simply. In addition, it also
provided the first website in the UK to leverage video platforms in connecting
entrepreneurs with investors. This unique, disruptive service solution was designed to
solve long-existing problems of communication barriers between parties by
introducing an entirely new solution to the market. However, whilst this new platform
was able to answer the basic problem of communication, it remained unfamiliar for
the vast majority of potential users who are more acquainted with and still prefer
communicating via more traditional channels. It also seemed that this particular
technology application17 was slightly too far ahead of its time or perhaps more
precisely, just simply too unlike what users were comfortable with. Another scenario
is that to establish a model like this might take longer to enter the market, which can
sometimes occur in case with some radical innovations.
Public-private partnerships for strategic systems innovation
opportunities
Learning from this important lesson, NACUE’s management decided to terminate its
partnership with CmyPitch.com and start to look at developing other useful tools to
assist young businesses and created its Ventures Academy programme. It provides
young entrepreneurs with the opportunity to learn more about start-up finance,
become investment-ready and connect with investors, by bringing together some of
the most promising young entrepreneurs, enterprising students, investors and mentors
in a holistic support programme that helps young entrepreneurs to develop the
knowledge, skills and network necessary to take their start-ups to the next level. This
system is a unique in its approach as beyond serving entrepreneurs’ needs, investors
are also able to access high-quality business propositions, within which it is much
more likely that they find suitable investment opportunities. The programme, which
was designed and implemented based on observational insights discussed in the
previous chapter, has three different phases that can be attended by student
entrepreneurs depending on their investment - and of course management - readiness
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30. level. Following the mentoring sessions, only a small number of ventures can qualify
to the final, where they can pitch for real investment. This new ‘quality controlled’
selective deal flow process can therefore guarantee that only the best propositions are
showcased thus increasing the overall quality of the programme.
By working on NACUE’s business support programming, which provided a fairly
classic example of how a socially oriented enterprise can move really fast and develop
feasible support tools, it also became clearer that there needs to be more innovative
macro solutions to the micro challenges. This includes providing an enabling
framework for businesses to access suitable forms and quantities of finance and
business development advice. Although this appears to be a problematic issue, there
are a number of collaborative approaches that could tackle the problems. One
interesting direction, which has been actively applied by NACUE too, is through
public-private partnerships (PPPs).
While there has been some of these collaborations in the UK as part of the country’s
public sector reform18, a form of PPP could also be adopted for entrepreneurship
support where the strengths and capabilities of government and a variety of privately
held support resources would be joined to provide a better service for users. It is also
arguably useful to establish more PPPs as they can act as policy vehicles to indirectly
address issues that people or the whole society face. This could be achieved by
facilitating more connection from the private firms side to engage in the collaborative
support process to solve complex public issues, especially within those areas where
public sector system lacks of innovative approaches and collaborative spirit. This
model essentially provides a strategic opportunity to share risks, moreover in most of
these cases this is also useful to shift these risks towards the private sector. Trends for
a wider use of public-private partnership have recently been emerging in the UK as
we can see this through some successful ‘hybrid’ venture capital schemes19, for
instance, which are backed by both private and public sector funding playing an
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31. increasingly important role in the risk capital funding of early-stage firms with the
potential for significant growth.
Research across different disciplines has provided interesting examples where similar
models have previously worked successfully. These includes, for instance the
Colombian educational and fair-trade coffee production areas (Mann et al., 2009), and
the US education issues (Hesseling et al., 1990). Making use of the skills and
dynamism of the private sector is therefore highly important. The question now is
how to do this effectively.
Partnership challenges
There are few conditions, which need to be considered in establishing a system of
joint venture between private and public management. First of all, it is crucial that
parties agree at the beginning of their collaboration, that their responsibilities and
risks are going to be distinct from each other’s. In addition to ensure success,
partnership members need to collaborate throughout design, execution, testing,
supervision and evaluation. While public institutions would deliver regulation and
facilitation, finance and execution would remain with private businesses and social
enterprises. Moreover, it would be useful to create an innovation fund to utilise public
sector funds to maximum effect to leverage private sector finance for investment in
innovative businesses. Nevertheless this approach requires careful balance and so to
promote dialogue and information sharing between parties, regular public-private
stakeholder meetings are also essential to be organised. Another risk factor originates
from some political concerns, which can significantly affect the development and
implementation of successful partnership frameworks. As Hesseling et al (2009, p. 9)
note, “the process of networking between private and public authorities is often highly
political, but pragmatically rather than ideologically rational”.
Second, this research also argues that it is possible to create a completely new
framework where public sector enabling operates on a more cost-effective and
collaborative thus more efficient way. One opportunity to be developed could be to
create an artificial system where entrepreneurs would be supported by industry
! E?

32. experts, experienced entrepreneurs and ‘business-minded’ enablers through services,
including different platforms, events and other relevant programmes facilitated,
(quality-) controlled and maintained by the public sector (see Figure 6). This would
be a much more branded, organised and recognisable platform, which either operates
as a not-for profit agency or a subsidy. This would result a much more cost-effective
way to provide quality accessible venture investment (including traditional business
angels, private equity and corporate venture capital) and mentoring support.
Government or a social enterprise would have the right to measure and control which
providers are offering the best and highest quality support. If the Government was the
facilitator, it could introduce new tax instruments to reduce the burden on tax-payers
and potentially generate revenue from its investment in successful companies20.
(ABCDE!8!
Answering the difficulties regarding legal issues between businesses and potential
investors, it would be useful to create additional services as building mechanisms that
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33. serve the preparation of pre-designed contracts and agreements, which would
facilitate an easier negotiation and deal making process. Agreements, sheets and non-
disclosure agreements could be pre-prepared and amendable in case something
requires specific changes. To make these services more accessible and less time
consuming for business owners as well as providing them online would effectively
reduce administrative and regulatory barriers.
The system eventually would serve as a mass demonstration tool to stimulate deeper
enterprise culture by utilising existing highly skilled labour and a demanding local
market. A good approach would be to create holistic support communities but initially
only around the strongest entrepreneurial and innovation clusters such as, for instance,
within the London and Cambridge university areas or in Edinburgh.
Another interesting type of strategy tool, where collaboration might add value in order
to achieving development goals, is through Multi-stakeholder Partnerships (MSPs).
This, in addition to the Public-private partnership model, where risks and resources
are directed from the public to the private sector party, uncertainties, resources and
the execution could be fully shared between public and private sectors and the civil
society. This would allow all participating parties to build on each other’s strengths
that complement each other thus contributing to sustainable development. This type
of partnerships can also be recognised in the NACUE’s corporate structure as well,
which clearly provide a creative and more ‘grassroots’ approach to a difficult public
sector issue, while taking advantages of economies of scale and have reduced costs
and shared resources to a more dynamic operation.
Management challenges
In order to establish effective MSPs in the wider entrepreneurship support area, trust
and effective communication via facilitated negotiations (GKPS, 2008) amongst all
the stakeholders are crucial. Again, a non-profit organisation, which commits itself to
deliver this, can potentially work the best to develop and maintain this system. While
the forms of enabling support can be designed in number of different ways, one
opportunity (among many others) is to create recognisable and accessible business
development zones based on local market needs, identified by civil societies.
! EE

34. Smart inspiring programmes for businesses could include creating a challenge fund to
support communities in delivering economic growth through various specific
innovation projects.
However, desk research data suggest that there are a number of risk factors, which
can be associated with these partnerships. It is therefore recommended that besides
creating essential communication channels, stakeholder meetings also need to be
facilitated. But first of all, establishing trust is the most essential step. In addition, as
data generated from interviews with ‘enablers’ suggests it is essential for any support
provision system to have a clear strategy about its target market. For this, the creators
first have to define what type of ventures they are focusing on by also understanding
these segments’ needs. Further phases of an ideal collaborative partnership can be
seen bellow (see Figure 7).
Figure 7
In the next paragraphs we will see how an emerging phenomenon, the community-
based approach can leverage its knowledge of user demand to eliminate barriers to
business creation and enterprise development thus establishing successful economic
structures as alternatives for the currently existing tools.
! EA

35. The Ideal System: A Community-Based Approach
In the recent years there has been a considerable attention devoted to community
groups and to how social enterprise might be able to solve complex public sector
concerns. As Dauncey (1988) argues, partnerships must include local community
groups as well as the state and the private sector, favouring the establishment of local
development organisations. Through a number of examples he also analyses how
grassroots communities can respond to common problems in an extended multi-actor
environment, the “rainbow economy” (Dauncey, 1988), which is at the centre point of
the state, the civil society and the market. His study provides great examples of
alternative ways of building sustainable community-led solutions. Dauncey’s case
studies provide a wide range of examples of how a modern, 21st Century society
should aim to stay together and encourage its communities to take part in creating a
joint ’community economic synergy’ for business support across the UK. In order to
achieve this, public participation is needed, which in the case of this study means both
local experienced business people as advisers as well as entrepreneurs who can then
jointly develop the best possible system for their needs.
While the tendency to look at local strategies that could be created to serve capital
needs has been increasing in these days, establishing innovative support mechanisms,
for instance credit unions or community development funds are not new
phenomena21. One of the oldest successful examples is called VanCity Credit
Union22, which is now Canada’s largest credit union - illustrating how alternative
funding strategies and lending institutions through community economic development
approaches can successfully meet people’s needs. However, a number of credit unions
exist in the UK, similar modern approaches could possibly be considered to expand
their model and market. Nevertheless, such transformed platform could probably
cause conflict of interest with established capital providers and its execution would
additionally raise significant regulatory issues as well.
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36. Modern, Interactive Opportunities
However in this modern, well-connected digital age businesses have much wider
space to explore different types of support forms. With the emergence of the Internet
and online communities, new, increasingly collaborative ways of providing and
receiving business support can be observed. Results generated from empirical
research in the previous chapter suggest that increasingly entrepreneurs find online
solutions quicker and simpler than any other support forms currently exist in the
market. To address the need of business owners to find valuable accessible simple
information and support on the world wide web, moreover to be able to fund their
ventures, adopting crowd-sourcing ideas and related business is also an opportunity
that could be explored more even in the macro-level support space.
A crowd sourced venture can benefit from this approach for a number of reasons.
While securing finance has been proved to work by attracting a wider audience of
potential investors, it can also be used to provide an immediate exposure to possible
future customers. There are two other ways in which this or a similar platform could
be used to reach out to even bigger communities of investors. One solution could be
for an online intermediary to allow the crowd to pre-select, rate and comment the
preferred venture ideas, based on their preference. Virtual credits or currency could
symbolise their popularity and the perceived value of their products in the consumer
market. This platform however would not provide viable funding solutions for those
ventures, which business ideas and technologies are not, or cannot be IP protected.
Additionally, it might be useful to explore whether an offline crowd financing system
could also work, providing access to a more traditional group of potential investors.
However this method would certainly be more effective than the current
asynchronous systems processes such as pitching and filtering, given the limitations
of this study - further research might consider deeper evaluation of this opportunity to
assess whether this type of model satisfies wider user groups too.
Another expression of the wish for a more collaborative form of community-
supported financing can be found in a modern version of some of the previously
presented traditional social lending, which is a part of the new Web 2.0 phenomenon.
One of the most significant game-changing service is currently provided by Zopa,
! EH

37. which is a peer-to-peer lending company23 that operates on a social lending website
where people lend and borrow money to and from each other at affordable rates,
while completely cutting out banks. Whilst this system still cannot be considered as a
secure source of alternative financing and, which could also possibly support
entrepreneurial businesses through its community-led micro-loan infrastructure, it is
interesting to see how smart ways of community engagements in such a rigid and
regulated market are able to explore new, effective ways of connecting members with
each other.
V. Conclusion
As entrepreneurship is becoming increasingly less individualistic in our modern
society, support organisations play a crucial role helping entrepreneurial firms to
realise their innovations thus contributing to generate economical growth. Regardless
of whether they are commercial or non-commercial enablers the reason why they
exist is to support aspiring and existing entrepreneurs to take more successful
innovations to the market. In order to enable provision of exceptional service for
exceptional ventures, public, private and third sector organisations need to co-operate
more effectively. Joining their resources could provide the essential, reliable support
infrastructure to efficiently support these businesses.
As credit conditions remain tight for small firms in the current economic climate
(FSB, 2010) and small businesses also continue to be reticent to approach banks to
raise capital, increasingly, informal capital markets and other alternative sources of
finance, such as professional venture capital, are becoming the leading source of
external financial support for entrepreneurial early-stage businesses. In addition,
community-led solutions utilise emerging technologies are also increasingly entering
the support market, establishing the foundations of a new ‘trust economy’. The
challenge is how an effective support infrastructure can leverage these tools to
implement successful support practices.
23
At present the Financial Services Authority does not properly regulate this kind of activity. It will be interesting
to see what would happen if it were do so.!
! E:

38. While this research identified the needs and the blockages to the support of various
client segments, it also found evidence that the most common reasons why new
ventures fail are related to two main obstacles: issues in getting the idea funded and
lack of accessible mentorship. It was also suggested that the resources that
entrepreneurs gain from experienced professionals, included from successful
entrepreneurs and informal investors, are extremely valuable for them, in fact, they
seemed to be indispensable to almost any high-growth potential businesses. Therefore
policy makers need to focus more creating and exploiting a system, which implements
appropriate solutions to address these challenges.
Using empirical research methods on entrepreneurs’ and enablers’ behaviour, this
thesis has answered the first research question and thus achieved the first research
objective. The further aim of this project was to understand how to maximise the
positive impact of the private and third sectors on public service innovative business
support delivery, identifying strategic opportunities for partnerships between these
sectors as one direction to delivery of this agenda. As this study highlights, successful
partnerships could enable an effective system change by leveraging significant
resources, building on each other’s complementary capabilities. In addition,
collaborations, such as multi-stakeholder partnerships and other community-led
approaches can be a driver of macro level entrepreneurship innovation.
Despite the methodological limitations of this report, it was possible to explore a
number of potential collaborative enabling tools and suggest a few possible solutions
to build an effective and reliable supporting framework. This has mainly been derived
from a consideration of prior literature and empirical observations, which has also
provided opportunities to draw conclusions with broader implications. For instance, it
might be interesting to examine how similar strategic innovation directions might help
across other areas of public concerns and consultancy areas, where comprehensive
cross-sectoral initiatives can be established, better generating social impact in other
fields though innovative and sustainable partnerships. In addition, further research
could also measure the impact of cross-sectoral support mechanisms and how new
technology-applications can provide valuable solutions in this market. Research could
also be done to examine the impacts and differences of applying the same systems
innovation opportunity in different countries.
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