I recently found myself on an ‘expert panel’ at a forum convened by ISBE (the Institute for Small Business and Entrepreneurship) & the IOEE on the future of business support policy in the UK, as part of their ongoing conversation into informing and shaping what a new national policy should be.
(OK - to clarify, I was technically there as Leigh Sear of SFEDI and the IOEE, but as he’d been called away overseas, he asked me to fill in for him.)
And while I shared various stories and approaches to business support with those present, I thought it might also be useful to capture here some of the other speakers’ arguments and discussions with those in the room that stuck with me, as well as some of what I took away that I’m still mulling over, and that will likely also inform my own ongoing activity in this field:
The definitions debate
With the almost fetishism of high growth in business support policy, it seems that the definition of what constitutes ‘high growth’ may be too exclusive in excluding many businesses who are seeing significant increases in revenues, but aren’t matching this with creating lots of direct employment opportunities (such as software firms, and something that will be be increasingly the norm with the rise of the ‘gig economy’).
As a result, many businesses who have the potential to contribute greatly to our economy are being sidelined and overlooked - surely to our cost...?
Not a ‘bottomless well’ (of growth)
It also seems that business growth isn’t something that can be sustained - various data sets shared by the ERC (https://www.enterpriseresearch.ac.uk/wp-content/uploads/2017/04/ERC-InsightPap-HartDanes.pdf) all indicate that firms can only experience growth for about their first 5 years, and then all mature and plateau; so if policy is to prioritise support for growth, we need to be more open and honest in recognising that businesses are only able to do so for a time limited period.
Measures of success
There seemed to be a general consensus that we need to use more that just financial measures to consider success in business growth - and that these should reflect the aspirations and motivations of the entrepreneurs and owners behind the businesses.
However, I’ve an idea that whatever these measures are should share the same characteristics as metrics in financial accounts: that they can be bench-marked externally to help us better consider how we compare and contrast with others to fully appreciate just how successful we really are, and that they can be aggregated to form data sets and evidence bases to allow us to better represent and lobby on their behalf.
Whose benefit is policy actually for?
Discussions around the different players active in the business support arena raised a question about who business support should be for, and who should be paying for it. Public policy should take a utilitarian approach, facilitating and enabling the most benefit for the most people, and in the real world, this means that the State can’t appease everyone, or provide for all business types and needs (hence it’s prioritising of high growth over sole traders as it believes this will create the most impact for more people).
However, we’re seeing private firms starting to offer accelerator and incubator programmes, and also sponsor others’ enterprise development and growth initiatives. So rather than try and create a single public policy that will encompass everyone, should we rather be taking an approach that uses simpler policy frameworks around different themes and types of enterprise/entrepreneur; better recognising that in some instances the private sector is better placed, and should be leading on elements of support?
The rationale (and risks) for enterprise education to be a recognised part of business support
There seemed to be agreement that any role Universities hold in delivering any policy around business support needs to include elements of enterprise education, and while there are good reasons for this, there are also some risks too:
- teaching and encouraging entrepreneurship amongst students increases their future employability by developing skills that employers value
- degree apprenticeships creates opportunities for universities to capitalise on their role as a provider of learning, but there’s no clear models for how Universities might best harness this new model (yet...)
- there’s a risk that in some universities having linked their offer of enterprise support to that of national policy, many student startups are being ‘lost’ or ‘fail to launch’ as the University is too focused on encouraging high growth and Intellectual Property-based ventures
- with the rise of corporates taking active roles in offering business support (including where there may not be an immediately obvious business case for them to do so), there’s a need for Universities to better co-ordinate their offer with these to capitalise on knowledge and expertise that both are developing - but tellingly, there was no presence from any such corporates at the Forum...
The holy grail: creating a pipeline of support for startup to high growth
Within any national policy that emerges, there will need be a recognition that encouraging new startups is just as important as supporting growth in existing businesses - but that its also difficult to ensure that this progression is smooth or able to be well managed. This is largely because of not only the sheer diversity of different business types and motivations, but also the plethora of support available to them at different stages and in different sectors.
In theory, Local Economic Partnerships should be well placed to better co-ordinate these support offers to maximise their potential for wider benefit, but the experience of many seems to be that owing to the governance models of LEPs not being inclusive or transparent enough, that such knowledge and co-ordination which could unlock the potential of many firms, isn’t happening.
If we can only do one thing...
As a closing to the panel debate, a few straw polls were taken of people in the room, asking for shows of hands to gauge what the focus of national policy should be if it could only focus on one thing - more start-ups, or more scale-ups.
(Personally, I’m in favour of more start-ups: they create and encourage more diversity and choice in an ever-changing society; help us develop more resilience; and research shows that the larger firms tend not to stick around that long anyway - the FTSE100 has a churn rate of about 10% each year!)
Overwhelming the room voted in favour of more start-ups.