Growing productivity: a Scottish recipe – Director’s Blog- May 2016
Growing productivity: a Scottish recipe
We have heard a lot recently – at least before Brexit became flavour of the news – about the need to boost productivity. And, in particular how the government can help firms to grow productivity. It turns out that the answer, or at least part of the answer, may have been under our noses all along!
Some new evidence suggests that the Scottish approach to supporting businesses through Account Management can significantly boost their productivity growth over the long term (http://tinyurl.com/h34kt4g). Indeed, the research suggests that if companies in Northern England had had access to an Account Management system their over the 2000-2014 period their productivity would have been around 13.6 percentage points higher. This is primarily an efficiency effect, however, and comes about as firms reduced their workforce but generated more sales per employee. So the main benefit of Account Management seems to be its ability to support the development of highly productive jobs.
So what is the Scottish Account Management system and how does it help firms? First, it is worth saying that not all firms in Scotland have access to this type of government support. Account Management systems are operated both by Scottish Enterprise (SE) and Highlands and Islands Enterprise (HIE). Both agencies select businesses with growth potential to work with. Some other companies are included because of their importance in local economies or to the overall economy as a whole. So around 2,500 companies in Scotland are in the Account Managed group.
Account Management works pretty much like a relationship banking arrangement. Each firm has a named Account Manager within SE or HIE who they can talk to and who can help the firm to identify external support for problem solving, capability development, innovation or investment. This support may come from a private sector provider, somewhere else in SE or HEI, from a university, or from UK wide support organisations such as UKTI, InnovateUK or the Enterprise Europe Network.
One issue firms in England often mention is not knowing where to go to get help with technical or strategic issues. Account Management overcomes this problem by providing firms with one point of contact with the different support agencies. It makes it easy for firms.
There is also a question of trust. SE and HEI Account Managers are not selling anything so they are seen by firms as ‘honest brokers’ providing honest and unbiased advice.
Account Management also provides a way of offering support to scaling firms or those which are growing rapidly. Scotland’s very successful ‘Companies of Scale’ programme is based on ‘intensive’ account management. Here, the Account Manager role changes from advisor to leadership coach, becoming a critical friend to a firm’s leadership team particularly at points of transition.
So is Account Management applicable across England? Well, probably not. Proximity matters here and it helps to provide a basis of common experience between firm and account manager. There is perhaps more potential for regional schemes as the Midlands Engine, Northern Powerhouse or the Growth Hubs develop their offerings to firms.
Please noted that the views expressed in this blog belong to the individual blogger and do not represent the official view of the Enterprise Research Centre, its Funders or Advisory Group.
