ERC Researchers made a significant contribution to the BIS Enterprise Research Conference on 3rd March at the ERC’s London home in the Shard.
Mark Hart launched the 2014 Global Entrepreneurship Monitor report on entrepreneurship and Jonathan Levie and Ute Stephan presented two new pieces of ERC research for BIS looking at the relationship between ambition and business performance and the motivations for entrepreneurship.
The GEM work reveals an optimistic story for 2014. The UK has pulled ahead of France and Germany in the entrepreneurship stakes – for the last four years it has significantly outperformed both of these countries in the number of early-stage entrepreneurs, and the UK’s long term trend continues upward. Growth in early-stage entrepreneurial activity in the UK is mainly because more men, especially those aged between 50 and 64 years old, are taking the first steps to running their own business. But, whilst this has widened the ‘gender gap’ in entrepreneurship, a longer term view reveals that the Total Entrepreneurship Activity rate of 5.7 per cent for women in 2014 has almost doubled in ten years. And optimism levels are rebounding. The percentage of non-entrepreneurs of working-age in the UK who agreed there were good opportunities for starting a business in their local area in the next six months has now risen to 37 per cent in 2014, marking a return to pre-recession levels of 2007.
Both the new research projects for BIS on Entrepreneurial Motivation and Ambition were follow up studies of SMEs who had taken part in earlier research, enabling us to reveal a picture of change over time. The Growth Ambition work suggests that growth isn’t confined to firms with substantial ambition although more ambitious firms have tended to grow more quickly. They are also more likely to have declined in both employment and turnover suggesting their growth path is slightly more turbulent. In addition, ambition appears to change little over time, despite the challenges of surviving through a recession. The most ambitious firms are more likely to have innovated, invested in training and development, developed new strategic goals, made acquisitions and exported. View Jonathan Levie’s presentation
The work for BIS on Entrepreneurial Motivation suggested that recession can actually act as a motivator for entrepreneurs with over half of the businesses starting a business in the recession saying they expected to grow compared to 35% of those starting pre-recession. The work also suggested that differences in employment growth, innovation and exporting were not as marked as we might have expected between those starting a business out of necessity and those starting because they saw an opportunity. Entrepreneurial Motivation, according to the study, only explains between 3 and 10% of the variation in the performance between businesses, and growth expectations at start-up are the strongest influence on business performance. View Ute Stephan’s presentation.
James Hayton , ERC and Warwick business school presented ‘Leadership & Management Skills in SMEs: Measuring Associations with Management Practices and Performance’ which concluded that L&M skills are relatively under-developed in many SMEs. Well-developed skills and the adoption of good management practices are positively related to firm performance and under-developed L&M skills and a widespread failure to adopt management best practices are constraining the performance and growth of a large number of English SMEs. View James Hayton’s presentation
The full report is available here
ERC Researchers also presented the first insights into work on the Sociology of Enterprise for BIS which is due to be completed Spring 2015.