Type
Theme
Research Paper

Rural business aspirations, obstacles and support: an analysis of the Longitudinal Small Business Survey 2015 Research Paper No. 58

A rural-urban analysis of the UK’s Governments Longitudinal Small Business Survey (LSBS) responses for 2015 has been undertaken to understand spatial variations in performance and uptake of external support services. The analysis is based on 15,500 survey responses from across the UK and uses official rural-urban classifications. Approximately 28 per cent of survey responses to the LSBS are classified as rural. Within the rural context, conclusions relating to growth have previously been hampered by difficulties in separating out whether rural location has a distinctive effect or whether spatial variations in business performance reflects differences in size, sector and age of business. Therefore this analysis used Propensity Score Matching (PSM) to control for these and other profile variables, allowing for an assessment of rural effects on business performance.

Associated Themes
Research Paper

Accessibility, utility and learning effects in university-business collaboration. Research Paper No 57.

UK government reports have emphasised the potential role of universities in driving localised economic development. There may be a utility-accessibility trade-off, however, between the accessibility of local university knowledge and its ‘fit’ with the specific needs of local firms. Here, using data from UK Innovation Surveys (UKIS) covering the period 2004 to 2012, we examine this trade-off and how it differs for firms of different sizes. Our analysis suggests four main empirical results. First, we find support for the predicted inverted-U shape relationship between the distance between collaborators and the innovation benefits. Second, we find evidence, in accord with the utility/accessibility trade-off, that local university collaboration benefits only small and medium firms. Third, we find that learning effects from previous collaborations with customers, suppliers etc. increase the probability of collaborative activity. Fourth, we find strong evidence of the persistence of university collaborations. Our results re-affirm the evidence from other studies of the value of university collaboration and suggest the value of policy action to address market failures which arise in the formation of university-small business collaborations.

Associated Themes
  • Innovation and Exporting
Research Paper

Does learning from prior collaboration help firms to overcome the “two worlds” paradox in university-business collaboration? Research Paper No 55

There is now substantial evidence on the positive contribution universities can make to helping firms’ innovation. Building university-business collaborations, however, confronts the ‘two-worlds’ paradox, and the difference in institutional logics and priorities between businesses and universities. Here, we consider whether firms’ experience from prior collaboration can generate learning which can help to overcome the two-world’s paradox and improve their ability to generate new-to-the-market innovations in collaboration with universities. Based on panel data for UK companies, we find evidence of significant learning effects in the commercialisation pipeline for new-to-the market innovation. Firms working with, say, customers in one period are significantly more likely to collaborate with universities in subsequent periods. Further down the pipeline, collaborating with universities increases the probability of a firm making new-to-the-market innovations (as opposed to new-to-the-firm innovation) by 21-24 per cent regardless of firm size. The commercial benefits of collaborative, new-to-the-market innovation are concentrated in medium and larger firms with no significant effect for small companies. There is the potential for policy intervention both to increase levels of small business-university collaboration and assist smaller firms to maximise the commercial benefits of collaborative, new-to-the-market innovations.

Associated Themes
Research Paper

The relationship between middle market firms’ access to finance and internationalization intentions. Research Paper No 54

This article examines the relationship between middle market firms’ access to finance and their exporting intentions. We hypothesise that this relationship is positive but moderated by a firm’s age. We test our hypotheses using a novel dataset of middle market firms across four large EU economies. Our analysis demonstrates that the relationship between middle market firms’ access to finance and their exporting intentions is different for younger and older firms. When younger firms have ready access to finance they are less likely to enter new geographic markets, while when older firms have ready access to finance they are actually more likely to enter new geographic markets.

Associated Themes
Research Paper

Assessing the characteristics, determinants and spatial variations of internationalised new ventures in the UK. Research Paper No 56

This study focuses on internationalised new ventures, here defined as firms that have been trading for 5 years or fewer and which have already engaged in selling their goods and/or services abroad. The report presents analysis of data from the Longitudinal Small Business Survey that: 1) examines differences between internationalised and non-internationalised new ventures, 2) assesses the factors which determine whether a new firm is likely to engage in export activity early in its lifetime; and 3) maps the geographic distribution of these internationalised new ventures across the UK.

Associated Themes
Research Paper

The effectiveness of regional, national and EU support for innovation in the UK and Spain. Research Paper No 52

Innovation policy aims to stimulate innovation and hence firm-level productivity and growth. Here, we use data from the national innovation panel surveys in the UK and Spain over the 2004 to 2012 period to explore the effectiveness of regional, national and EU innovation support in promoting the extent of innovation activity, its novelty, and market success. Allowing for potential selection effects, our results suggest that regionalised support is most influential in increasing the probability of undertaking both process and organisational innovations. For both the UK and Spain, national innovation support is associated with a higher probability of product or service innovation, and the degree of novelty of product or service innovations. In terms of innovation success (sales) we see a rather different pattern in the UK and Spain. In the UK only regionalised support is associated with increased innovative sales. In Spain, innovative sales are influenced by both regional, national and EU support measures. Our results suggest that moves towards more centralised innovation policy in the UK since 2012 may reinforce a focus on leading edge, novel product and service innovation while placing less emphasis on broadly based process and organizational innovation.

Associated Themes
  • Innovation and Exporting
Research Paper

Exploring the success and barriers to SME access to finance and its potential role in achieving growth. Research Paper No53 ( Revised )

Exploring the success and barriers to SME access to finance and its potential role in achieving growth
What are the potential growth impacts of external finance on UK SMEs? Who seeks it, who gets it, and who is discouraged? Drawing on analysis of the 2015 UK Longitudinal Small Business Survey of 15,502 SMEs and interviews with six senior staff from Oxford Innovation who provide finance support to high growth firms, we provide robust contemporary evidence and key policy implications.

Associated Themes
Research Paper

The contribution of alternative finance to business growth. Research Paper No 51

This paper analyses the characteristics and activities of firms that use crowdfunding, using data from the Longitudinal Small Business Survey (LSBS). Our aim is to better understand the role that crowdfunding plays in the business lending market, and potential implications for policymakers

Associated Themes
Research Paper

Persistence in exporting: cumulative and punctuated learning effects. Research Paper No 50

Persistence in exporting matters, because firms with continuous exposure to export markets derive greater benefit from exporting than do sporadic exporters. Conceptually, however, export persistence is poorly understood, and is typically explained by sunk costs leading to high export exit costs.

Associated Themes
Research Paper

Market failures in open innovation: implications and policy responses

Open innovation provides significant advantages for individual firms and may generate wider social benefits. Positive externalities related to knowledge sharing may result from openness itself, and enhanced levels of innovation may lead to otherwise unachieved innovation spillovers. A number of studies have suggested, however, that average levels of OI activity remain well below the level which maximises innovation outputs. Here, we identify four market failures which arise in the process of OI partnership formation and which may be limiting firms OI engagement. Information failures occur which mean firms are unaware of the benefits of OI, lack information on the capabilities of partners and their trustworthiness. Appropriability issues may also mean that levels of OI remain below the social optimum. We develop policy responses to each market failure linked to the development of an OI intermediary and develop a related logic model.

Associated Themes
Research Paper

Decomposing UK aggregate labour productivity and growth: 1998-2013 using the ONS business structure database data. Research Paper No. 48

This study provides a comprehensive analysis of UK labour productivity patterns and contributing factors over the 1997-2013 period. Based on the ONS Business Structure Database (BSD), we present a full picture of the UK firms’ productivity patterns in the whole economy over the examined period and in particular during the “Great Recession”, at aggregate level, sector level, and among heterogeneous groups. We observe significant business demographic changes underlying UK aggregate productivity change, featuring an increasing number of small businesses especially single-employee firms, less entrants and more exits and discuss the implications of these changes in explaining the productivity decline. When differentiating firm growth types, we find “Growth heroes” and “Decline by efficiency loss” firms over-contribute to aggregate labour productivity compared to their weight in the business population. In contrast, an already large group of ‘Decline by contraction’ firms surged over the recent recession and under-contribute to aggregate labour productivity. We highlight that within firm productivity improvement has been mainly responsible for aggregate productivity changes in the UK while resource allocation on average played a limited role in driving the aggregate productivity change.

Associated Themes
  • Business Demography Research Theme
Insight

Understanding self-employment – ERC Insight Paper

This Insight Paper presents the key findings of studies presented at the "Understanding Self-Employment” workshop organised by the Microbusiness Research Portal with the support of the Centre for Enterprise and Economic Development Research (CEEDR) at Middlesex University Business School on the 7th June 2016. The seminar explored the recent increase in self-employment in the UK, discussed the problems related to the definition of self-employment and presented the implications for policy development.

Authors
Associated Themes
Research Paper

Ambitious Entrepreneurship and Migration A Multi-Level Study across the Local Authorities in England and Wales. Research Paper No 47

We consider why both immigrants and regional migrants may embark on different types of entrepreneurial projects: high versus low aspiration; opportunity driven versus necessity driven. Next, using Global Entrepreneurship Monitor data, we construct a multiple-years sample of UK working age population with wide spatial coverage, and apply a multi-level multinomial logit model to test and compare propensities of migrants to enter into different forms of entrepreneurship. We find that – compared with those who are not spatially mobile – both internal (regional) migrants and immigrants are more likely to start new ventures characterised by high growth aspirations. Immigrants are more likely than non-migrants to engage in both opportunity-driven and high-aspiration entrepreneurship, but, unlike regional migrants, not in necessity-driven and low-aspiration entry.

Associated Themes
Insight

Sustaining growth – the HR dimension HR practices and management and leadership skills of High Growth SMEs

This research set out to investigate human resource management (HRM) practices and leadership behaviours in UK SMEs that represent a small proportion of firms to have achieved long-term growth. We interviewed 30 senior leaders of such SMEs and found that most leaders espouse key high performance work practices such as selective hiring, employee development, open communication, and, to a varying degree, performance management and employee participation. Through flexible informal practices, SME leaders tap into employee’s intrinsic motivation to enhance performance and to develop personal trust and reciprocity. Overall, our research paints a picture of HRM in growth-oriented UK SMEs as a complex phenomenon where a number of formal and informal HR levers interact, guided by a compelling vision, and creating a positive company culture in the process.

Associated Themes
ERC Report

Sustaining growth – the HR dimension HR practices and management and leadership skills of High Growth SMEs

Prior business demographics research conducted by the ERC identified that only a small minority of UK SMEs experience sustainable growth over an extended period of time. For instance, of the firms that were newly established in 1998 just 6% showed an appreciable employee growth by 2013. What lies behind such a remarkable performance on the part of so few companies? In this paper, we investigate the leadership behaviours and high performance work practices (i.e. those HR practices that are intended to align employees’ performance with organizational goals through self-regulation rather than sanctions) that are associated with growth.

Author

Oksana Koryak, Nicos Nicolaou

ERC Report

Human resource practices and firm growth: an exploratory analysis from the matched employer skills survey and the ONS business structure database A statistical report produced by the Enterprise Research Centre for UKCES

This project aimed to explore the role of Human Resource (HR) practices in driving firm growth. Central to the project is the use of the 2011 Employer Skills Survey (ESS) which provides detailed information on the HR practices adopted in individual workplaces. These observations were matched to establishment data derived from the longitudinal Business Structure Database (BSD) which provides time-series information on employment and turnover for all UK firms and establishments registered for VAT and/or PAYE.

Author

Karen Bonner, Stephen Roper , Mark Hart

ERC Report

Innovation and HR practices in five professional service sectors A report for the UK Commission for Employment and Skills

Innovation and HR practices in five professional service sectors, A report for the UK Commission for Employment and Skills
We investigated the link between human resource practices, innovation, growth and productivity growth in 900 firms across five UK service sectors: Software & IT Services, Accountancy, Architectural Services, Consultancy and Specialist Design.

Author

Stephen Roper, James Love, Jane Bourke

Associated Themes
  • Innovation and Exporting
Research Paper

Modes of firm growth. Research Paper No 46

There is now a general consensus that high growth firms (HGFs) are economically important, and governments across the world have targeted resources to help firms achieve high growth. Yet while there is a large evidence base on the nature of HGFs, little research considers ‘how’ potential HGFs are trying to grow and ‘what’ is preventing firms from achieving sustained growth (i.e. the barriers firms face to sustain a longer period of rapid growth). This report aims to better understand the nature of growth processes within high growth firms (HGFs).

Associated Themes
Research Paper

(Seeking, Acting on and Appreciating) the Value of Business Advice. Research Paper No 44

Previous evidence shows that business advice helps businesses and that more advice is generally better [1-4]. Most firms will take advice from outsiders at some point in their development but fewer firms take advice than seems warranted by the evidence [5]. The reasons for the reluctance to take advice are varied and have been relatively intractable; moreover our understanding of the ‘subtle processes’ within advice has been hampered by the few inductive investigations [6] with recent exceptions [7-9]. These ‘subtle processes’ imply that advice is not a single process but is made up of a series of sub-processes.

Authors
Associated Themes
  • Leadership
Research Paper

Work organization and innovation in legal services: analysis from a ‘deep dive’ study. Research Paper No 45

Despite its potential social and economic benefit, innovation in legal services has to date received little academic attention. Drawing on the largest survey of legal services innovation ever undertaken (c. 1500 firms) this paper explores the strategic, resource and environmental drivers of service and delivery innovation among solicitors, barristers and other legal service providers.

Associated Themes
  • Innovation and Exporting
Research Paper

The market for Technology Licensing in the UK. Research Paper No 43.

The social benefit of a patent system lies in its ability to underpin the circulation of technology in the economy through technology licensing and in facilitating the growth of technology markets. This evidence brief considers the main dimensions of the technology licensing market in the UK, drawing on expenditure data from the Community Innovation Survey in order say more about the characteristics of buyers in the market. This is an area which remains relatively under explored and can provide a useful basis upon which to develop effective policy. We estimate the size of the technology licensing market, highlight the temporary nature of licensing expenditure and explore the participation of firms. We find small firms are more frequent purchasers of technology licensing but large firms account for the larger shares of spending. Similarly, R&D services firms are large buyers of technology licenses and dominate spending in the technology licensing. We also find the participation of innovative firms dominates that by non-innovative firms.

Associated Themes
Research Paper

Absorptive capacity and ambidexterity in R&D: linking technology alliance diversity and firm innovation. Research Paper No. 42

The aim of this study is to examine how firms realize the benefits associated with a diverse range of technology alliances. We propose and test the hypothesis that firms’ knowledge combination capabilities mediate the relationship between technology alliance diversity innovation. Using panel data for Spanish manufacturing companies during the period 2004-2011, we provide evidence that firms’ absorptive capacity and ambidexterity in R&D serve as mediating mechanisms between technology alliance diversity and innovative performance Our study advances the literature on technology alliances by showing how firms use their portfolios of technology alliances to form their combination capabilities, and subsequently, to enhance innovation outcomes.

Associated Themes
  • Innovation and Exporting
Research Paper

The roles and effectiveness of design in new product development: a study of Irish manufacturers. Research Paper No. 41

Investments in design can make a significant contribution to successful new product development (NPD). However, there is insufficient evidence on the most appropriate or effective role that design could play. Previous case-based research has identified alternative roles for designers in NPD, but there is only tentative evidence over such roles’ contribution to NPD outcomes. Using data on a large sample (c. 1300) of Irish manufacturing plants we are able to examine the effectiveness of three different levels of involvement of designers in NPD and their impact on NPD novelty and success.

Associated Themes
  • Innovation and Exporting
Research Paper

Local and firm-level influences on innovation performance: linkages, climate and externalities. Research Paper No. 40

Interest in the local dimension of economic development has intensified in recent years with changes in the English policy landscape emphasising local policy action. In this paper we use an augmented version of the UK Innovation Surveys 4-7 to explore firm-level and local area influences on firms’ innovation performance.

Associated Themes
  • Innovation and Exporting
Research Paper

The legacy of public subsidies for innovation: input, output and behavioural additionality effects. Research Paper No 21

In many countries significant amounts of public funding are devoted to supporting private firms’ R&D and innovation projects through subsidies or grants, loans, and other instruments such as loan guarantees or R&D tax credits. Our interest here is in exploring the mechanisms through which these positive effects occur and in evaluating the legacy effects of public subsidies for private innovation.

Associated Themes
  • Innovation and Exporting
Research Paper

Firms’ innovation objectives and knowledge acquisition strategies: a comparative analysis . Research paper No 38

External partnerships play an important role in firms’ acquisition of the knowledge inputs to innovation. Such partnerships may be interactive – involving exploration and mutual learning by both parties – or non-interactive – involving exploitative activity and learning by only one party. Examples of non-interactive partnerships are copying or imitation. Here, we consider how firms’ innovation objectives influence their choice of interactive and/or non-interactive connections. We conduct a comparative analysis for the economies of Spain and the UK, which have contrasting innovation eco-systems and regulation burdens

Associated Themes
  • Innovation and Exporting
Research Paper

The marketization of higher education: A causal analysis of innovation in UK universities . Research Paper No 39

Higher education is increasingly a marketised service sharing many characteristics with other professional services such as legal, medical or financial services. With marketization comes competition, and the need for HEIs to develop and maintain attractive undergraduate programmes to attract and retain strong faculty and fee-paying students. Here, we consider the drivers of programme innovation – the introduction of new programmes – and the withdrawal of existing programmes in UK universities. Using panel data for all UK universities provided by UCAS we identify significant resource, internationalisation and business engagement effects. Financial stringency encourages both programme innovation and withdrawal. More extensive international market engagement and research collaboration with business have similar effects increasing programme innovation. The results have both strategic and systemic implications.

Associated Themes
Insight

Spatial Incidence of High Growth Firms.

High-Growth Firms (HGFs) are a very small proportion of the UK business population yet they have a disproportionate impact on job creation.
We present data at local economic area level over time to show that there is a very distinct geography emerging for the incidence rate of HGFs since the recession.

Associated Themes
  • Business Demography Research Theme
Research Paper

Waves of Professionalization Before, During and After Management Buyouts and Buy-ins of Private Family Firms. Research Paper No 37

We explore the process of professionalization pre- and post- buyout (MBO) or buyin (MBI) of former private family firms using longitudinal evidence from six UK family firms undergoing an MBO/I in 1998. Professionalization behaviour was monitored up to 2014. Previous studies have conceptualized professionalization as a threshold to be attained. We demonstrate that professionalization is a complex process occurring in waves, triggered by changes in firm ownership and management. Waves of professionalization converge during the MBO/I process. Buyouts provide a funnelling mechanism enabling diverse control
systems to be standardized. Post-MBO/I, divergence in the professionalization process reoccurs contingent on firm-specific contexts. Professionalization focuses on operations when stewardship relationships predominate, but on agency control mechanisms when there is increased potential for agency costs. Buyout organizational form is an important transitory phase facilitating the professionalization process. Professionalization is not a once for all development stage.

Associated Themes
  • Finance and Governance Research Theme
ERC Report

Unlocking UK Productivity

UK productivity to be boosted by increasing exporting and innovation among small and medium-sized firms.

Britain’s productivity is falling behind other economies because it is slower to turn ambitious smaller firms into exporters of innovative new products and services, according to a new report.

With more support, it is estimated that up to 110,000 small to medium-sized enterprises (SMEs) could become regular exporters, adding an extra £1.15 billion in Gross Value Added (GVA) to the economy in the first year alone in the form of new and higher value jobs.

The report published today, “Unlocking UK Productivity” has been co-authored by Goldman Sachs, the Enterprise Research Centre (ERC) and the British Business Bank (BBB).

Its findings draw heavily on the core research themes of ERC for the past three years.

Author

ERC , Goldman Sachs , British Business Bank

Research Paper

Investigating Schumpeter’s creative army: what drives new-to-the-market innovation in micro-enterprises? Research paper 36

Schumpeterian arguments related to creative destruction place small, entrepreneurial firms at the centre of the innovation process. The exclusion of micro-enterprises (with less than 10 employees) from most innovation surveys means, however, that we know relatively little about innovation among this group of firms. Here, using new survey data on a thousand micro-enterprises we explore the determinants of new-to-the-market innovation, the basis for the Schumpeterian creative destruction (CD) process. Our results provide strong support for the interactive nature of micro-enterprise innovation and suggest the potential value of developing a model of interactive creative destruction (ICD). Our results also suggest that family-owned firms are more likely to introduce new-to-the-market innovations and therefore play an important role in the ICD process. In organisational terms, our analysis emphasises the range of technical and co-ordination capabilities required by micro-enterprises to innovate successfully. Policy implications relate to promoting awareness among micro-firms of the support available for innovation to reduce the impact of financial and risk constraints.

Associated Themes
  • Innovation and Exporting
Research Paper

Profiling UK university spin-outs. Research Paper No 35

This report presents the results of a comprehensive survey of UK university spin-out businesses.
In an effort to enhance our understanding of this sector, a database of 1044 active USOs was compiled from individual university records and internet searches, and matched to a published list of UK university spin-outs.Telephone interviews were conducted with USOs and a final sample of 350 was achieved. Non-response bias was tested for and weights were constructed to ensure that the findings were representative of the UK population of USOs.

Associated Themes
  • Innovation and Exporting
Research Paper

Resources and innovation in family businesses: The Janus-face of family socio-emotional preferences. Research Paper No 34

ERC Research Paper No 34. Resources and innovation in family businesses:The Janus-face of family socio-emotional preferences.

Family business socio-emotional preferences are often Janus-faced: Some strive to create a strong business they can pass on to offspring by building innovation-promoting resources such as human, relational and financial capital. Other family firms cater to family desires for unqualified nepotism, altruism towards undeserving kin, and appropriation of firm assets to fulfill parochial desires that erode these resources.
We explore how some such preferences, together with their impact on resources and the innovation demands of their markets, shape the approach to innovation.

Associated Themes
Research Paper

Understanding the social role of entrepreneurship. Research Paper No 33

There is a need to rethink and redefine the social value added of entrepreneurial activities to society. In this paper we develop five pillars on which the evolving social role of entrepreneurship can rest and have its impact: (1) connecting entrepreneurial activities to other societal efforts aimed at improving the quality of life, achieving progress, and enriching human existence; (2) identifying ways to reduce the dysfunctional effects of entrepreneurial activities on stakeholders; (3) redefining the scope of entrepreneurial activities as a scholarly arena; (4) recognizing entrepreneurship’s social multiplier; and (5) pursuing blended value at the organizational level, centring on balancing the creation of financial, social and environmental wealth. In a final section we discuss implications for practices and for further research.

Associated Themes
  • Finance and Governance Research Theme
Research Paper

Academic entrepreneurship: time for a rethink? Research Paper No 32

Academic entrepreneurship, which refers to efforts undertaken by universities to promote commercialization on campus and in surrounding regions of the university, has changed dramatically in recent years. Two key consequences of this change are that more stakeholders have become involved in academic entrepreneurship and that universities have become more “strategic” in their approach to this activity. We assert that the time is ripe to rethink academic entrepreneurship. Specifically, theoretical and empirical research on academic entrepreneurship needs to take account of these changes, so as to improve the rigor and relevance of future studies on this topic. We outline such a framework and provide examples of key research questions that need to be addressed to broaden our understanding of academic entrepreneurship.

Associated Themes
  • Finance and Governance Research Theme
Insight

Contribution to Job Creation by High Growth SMEs.

High-Growth Firms (HGFs) are a very small proportion of UK businesses population yet they have a disproportionate impact on job creation. We re-visit the issue to confirm that typically, over a three year period, high growth SMEs represent less than 1% of established businesses, but generate 20% of all job growth amongst established businesses which grow

Associated Themes
  • Business Demography Research Theme
Research Paper

Innovation, quality management and learning: a dynamic analysis. Research Paper No 30

ERC Research paper No 30
Quality improvement and innovation are central strategies for firms in an increasingly globalised marketplace. Implementing both quality improvement and innovation, however, poses significant managerial, organisational and technical challenges and may also involve significant lags before benefits are realised. Here, using panel data on a large group of Irish manufacturing firms and econometric analysis, we establish the dynamic influence of firms’ adoption of quality improvement methods (QIMs) on firms’ innovation performance. Our study highlights the short-term disruptive and longer-term beneficial effects of QIM adoption on innovation.

Associated Themes
  • Innovation and Exporting
Research Paper

Creating value from embodied knowledge – the link between advanced manufacturing technologies and innovation. Research Paper No 31

Research paper No 31
The ability to innovate successfully is a key corporate capability, depending strongly on firms’ access to knowledge capital: proprietary, tacit and embodied. Here, we focus on one specific source of embodied knowledge – advanced manufacturing technologies or AMTs – and consider its impact on firms’ innovation success.

Associated Themes
  • Innovation and Exporting
Research Paper

Feasibility Study – Exploring the Long-Term Impact of Business Support Services. Research Paper No 29

This report is a feasibility study examining whether it is possible to observe a longer term impact of business improvement schemes in general using the old Business Link (BL) offer in England in 2003 as an example. The report covers the methodological issues of assessing the economic impact of business support interventions over an extended time period, although the findings will be of interest to policy makers. Building on the published evaluation of BL in 2006 this new analysis uses 7 additional years of employment and turnover data from the ONS Business Structure Database (BSD) to demonstrate the value of longitudinal evaluation time frames.

Associated Themes
  • Business Demography Research Theme
Research Paper

The origin of spin-offs – A typology of corporate and academic spin-offs. Research Paper No 26

We provide a typology of corporate and academic spin-off types, distinguishing spin-offs involving new ventures from those that concern existing activities. We summarize the papers published in this special issue, relating them to the typology we develop. We conclude by developing an agenda for further research on spin-offs.

Associated Themes
  • Finance and Governance Research Theme
Research Paper

Experience, age and exporting performance in UK SMEs. Research Paper No.28

It has often been argued that smaller firms face particularly strong resource constraints in developing an international market profile. Here we consider the determinants of SMEs exporting using a survey of internationally engaged UK SMEs. We first develop a theoretical model incorporating organisational and prior managerial learning effects. Our empirical analysis then allows us to separately identify the positive effects on exporting from the international experience of the firm and the negative effects of firm age. Positive exporting effects also result from grafted knowledge – acquired by the recruitment of management with prior international experience. Innovation also has positive exporting effects with more radical new-to-the-industry innovation most strongly linked to inter-regional exports; new-to-the-firm innovation is more strongly linked to intra-regional trade. Early internationalisation is also linked positively to the number of countries to which firms export and the intensity of their export activity. We find no evidence, however, relating early internationalisation to extra-regional exporting providing further evidence that firms tend be ‘born regional’ rather than ‘born global’. Implications for policy and practice are discussed.

Associated Themes
  • Innovation and Exporting
Research Paper

Firms’ innovation objectives and knowledge acquisition strategies. Research Paper No 27

External partnerships play an important role in firms’ acquisition of the knowledge inputs to innovation. Such partnerships may be interactive – involving exploration and mutual learning by both parties – or non-interactive – involving exploitative activity and learning by only one party. Examples of non-interactive partnerships are copying or imitation. Here, we consider how firms’ innovation objectives influence their choice of interactive and/or non-interactive connections. Four empirical results emerge. First, we find strong and consistent support for complementarity between non-interactive and interactive connections across firms in all sectors and sizebands. Second, we find that innovation objectives related to new products and services are linked only to non-interactive connections. Third, we find tentative evidence that where firms have innovation objectives which relate to product or service improvement they are more likely to establish non-interactive rather than interactive connections. Fourth, the extent of firms’ interactive and non-interactive connections are strongly related firms’ human capital endowments. These latter results suggest interesting second-order innovation effects from human capital improvements.

Associated Themes
  • Innovation and Exporting
Research Paper

Does Entrepreneurship Make You Wealthy? Research Paper No 25

There is growing interest in entrepreneurial earnings; however prior studies have typically focused on incomes derived from business ownership - a highly problematic measure, which fails to fully capture the rewards of entrepreneurship. In contrast, wealth comprises a stock of accumulated assets providing a more robust measure of relative success and economic well-being over the life-course of the business and the individual entrepreneur.

Associated Themes
  • Diversity
Insight

LEP Innovation Benchmarks 2002. 2010

The UK Innovation Survey provides information on product/service and process innovation as well as the barriers to innovation activity for a relatively large number of UK firms.
In this paper we present the first local economic area analysis of this data derived from four surveys covering the 2002-04, 2004-06, 2006-08 and 2008-10 periods.

Associated Themes
  • Innovation and Exporting
Research Paper

Public R&D policies and Private R&D investment: Research Paper No23

The importance of R&D investment in explaining economic growth is well documented in the literature. Policies by modern governments increasingly recognise the benefits of supporting R&D investment.
This paper offers the first systematic review and critical discussion of what the R&D literature has to say currently about the effectiveness of major public R&D policies in increasing private R&D investment. Public policies are considered within three categories, R&D tax credits and direct subsidies, support of the university research system and the formation of high-skilled human capital, and support of formal R&D cooperation's across a variety of institutions. Crucially, the large body of more recent literature observes a shift away from the earlier findings that public subsidies often crowd-out private R&D to finding that subsidies typically stimulate private R&D. Tax credits are also much more unanimously than previously found to have positive effects. University research, high-skilled human capital, and R&D cooperation also typically increase private R&D. Recent work indicates that accounting for non-linearities is one area of research that may refine existing results.

Associated Themes
  • Innovation and Exporting
Research Paper

Fear of Failure and Entrepreneurship: A Review and Direction for Future Research – Research Paper No 24

One of the most common fears among entrepreneurs is called the fear of failure (Bosma et al. 2008). Drawing on psychological and socio-psychological theories, the experience of fear of failure can be described as the appraisal of threats in evaluative situations with the potential for failure (Conroy 2001). These situations activate cognitive schema or beliefs associated with the aversive consequences of failing and may cause different behavioural responses: approach the threat aggressively (fight), avoid facing the situation (flight), or be paralyzed in the situation (freeze) (Conroy 2004; Gray 1971; Elliot 1997). However, an examination of the entrepreneurship literature shows that the fear of failure is predominantly assumed to be a barrier to entrepreneurship.

Associated Themes
  • Leadership
White Paper

Out of the shadows: Growth from non-farm rural enterprises: ERC Evidence White Paper No. 10

This White Paper contains summaries of presentations given at a workshop on rural, non-farm enterprise supported by the Enterprise Research Centre and hosted at Aston Business School on 27th February 2014. The final contribution by Roger Turner, who co-ordinated the event for ERC, provides a summary of the discussions from the day and some of the issues which arose.
The Enterprise Research Centre has a dual objective: to carry out leading- edge research on small business growth and development and to ensure that where evidence does exist it is made available as widely as possible. The ‘Out of the Shadows’ event was linked to the second objective, and brought together academics and other researchers conducting research on rural business development with those formulating policy for and directly supporting rural enterprises.
The ERC is grateful to all of the contributors for their input at the ‘Out of the Shadows’ event and their permission to include material in this summary report.

Authors
Associated Themes
  • Innovation and Exporting
Research Paper

ERC Research Paper. Creating Value in Ecosystems. Research Paper No 22

CREATING VALUE IN ECOSYSTEMS:CROSSING THE CHASM BETWEEN KNOWLEDGE AND BUSINESS ECOSYSTEMS

Associated Themes
  • Finance and Governance Research Theme
Research Paper

The legacy of public subsidies for innovation: input, output and behavioural additionality effects

The Legacy of Public Subsidies for Innovation

Associated Themes
  • Innovation and Exporting
Research Paper

Knowledge context, learning and innovation: an integrating framework. Enterprise Research Centre ( ERC ) Research Paper No 20

Knowledge context, learning and innovation: an integrating framework. Enterprise Research Centre ( ERC ) Research Paper No 20
In this paper we develop a framework to identify those elements of firms’ knowledge context which are important for innovation, and the mechanisms through which that knowledge impacts on firms’ innovation performance. We make four main contributions to the existing literature. First, our characterisation of knowledge context provides the basis for a more specific identification of which elements of firms’ knowledge environment are important for innovation, discriminating between spatial, industrial and network influences. Second, we reflect the role of innovation ambition in shaping firms’ knowledge search strategies. Third, we differentiate between firms’ interactive and non-interactive knowledge search activities and recognise that these may be complemented by unanticipated and serendipitous knowledge spillovers. Finally, we introduce the notion of encoding capacity to reflect firms’ internal ability to assimilate and apply external knowledge. Our framework provides an integrating mechanism for existing empirical studies, suggests a number of new research directions related to the determinants of innovation performance and the heterogeneity of innovation outcomes.

Associated Themes
  • Innovation and Exporting
White Paper

Small firm-large firm Relationships

Small firm-large firm relationships and the implications for small firm innovation: what do we know?

Associated Themes
  • Innovation and Exporting
Insight

UK’s Hidden Growth Champions

The Enterprise Research Centre (ERC) has developed an alternative approach to identifying groups of fast-growing firms which contribute disproportionately to job creation and output. This will have significant implications for policy discussions on the relative importance of SMEs and which types of firms drive growth in the economy.

Associated Themes
  • Business Demography Research Theme
Insight

Growing Global – Moving Up the Exporting Ladder

Much has been done to support SME exporting in the UK in recent years. Only around a quarter of UK SMEs currently export, however, and a very small group - only 6 per cent of SMEs - currently export more than 50 per cent of their sales. For a very significant proportion of UK SMEs, therefore, the potential opportunities provided by exporting remain unexploited. Who are these SMEs? This question is important if we are to effectively target support and enable these firms to reap the growth benefits of exporting. ERC research helps to identify some markers of export potential which should allow more effective profile-led marketing of export support.

Associated Themes
  • Innovation and Exporting
Insight

Financing Growth

Recent ERC research provides new insights into bank borrowing among UK SMEs and emphasises the potential value of effective company boards in helping firms to access appropriate finance. The evidence suggests that only around 1 in 7 small businesses in the UK seek bank funding. Yet we know that firms which do utilise external finance grow more rapidly. As the upswing takes hold what can be done to encourage more small firms to seek external finance to support their growth? Recent ERC research provides some of the answers and highlights other ‘known unknowns’.

Associated Themes
  • Finance and Governance Research Theme
Insight

Explaining the US-UK Ambition Gap

Data from the Global Entrepreneurship Monitor highlights a persistent gap between the US and the UK in the proportion of business owner-managers with high growth expectations. Professor Jonathan Levie examines the evidence and finds that employers in the UK and the US are in fact equally likely to be ambitious. He concludes that the ambition gap is a result of a rising proportion of new self-employed with no employees and relatively low growth ambition in the UK and a significant increase in the number of established business owners with employees in the US.

Associated Themes
  • Ambition
Research Paper

Unpacking open innovation .Research Paper No 19

We explore the relationship between two key aspects of open innovation in small firms – absorptive capacity and external relationships – and their effects on growth in the US and European biopharmaceutical sectors. Results from an international sample of 349 biopharmaceutical firms surveyed in the US, UK, France and Germany suggest that realized absorptive capacity plays an important role in determining firms’ growth. In terms of the interaction between firms’ absorptive capacity and external relationships, we find that engagement with exploratory relationships depends strongly on the continuity of R&D, while participation in exploitative relationships is more conditional on firms’ realized absorptive capacity.

Associated Themes
  • Innovation and Exporting
Insight

Innovation or imitation: Which boosts growth in recession?

Innovation or imitation which leads to faster growth? Innovation – introducing products or services which are new to the market – may yield first mover advantages. Imitation – introducing new to the firm but not new to the market products or services is a safer, more conservative strategy. Drawing on data from UK innovation surveys, Stephen Roper, Director of ERC identifies some key trends

Associated Themes
  • Innovation and Exporting
Research Paper

The Financing of Diverse Enterprises: Evidence from the SME Finance Monitor .Research Paper No 18.

This paper contributes to our understanding of the finance issues currently facing diverse SMEs by presenting a new analysis of the SME Finance Monitor. While prior studies have contributed substantial evidence regarding the effects of either gender or ethnicity on finance outcomes, these analyses have typically focused on either women-owned or ethnic minority owned enterprises. This study considers the experiences and outcomes of both women-owned and ethnic minority-owned enterprises, including the interaction effects of ethnicity and gender.

Associated Themes
  • Diversity
White Paper

Back to Borrowing? .White Paper No 8.

Discouraged Borrowers (DBs) are businesses which would like to borrow but which do not apply for bank finance because they either feel they would be turned down (‘indirectly discouraged’), or they've made informal enquiries but not proceeded with their application because the bank seemed reluctant to lend (‘directly discouraged’). We know a lot about who discouraged borrowers are but little about what influences whether a small business owner is discouraged or not. This paper explores those factors in more detail and identifies SME's dissatisfaction with their banking relationship as a key driver.

Associated Themes
  • Finance and Governance Research Theme
Research Paper

Innovation, Innovation Strategy and Survival. Research Paper No 17

Innovation has a recognised effect on survival. Undertaking more risky innovation may increase the risk of business failure, while incremental innovation may reduce the risk. This paper investigates how firms’ innovation strategy choices affect the relationship between innovation and firm survival. The research suggests the notion of “survival additionality”, i.e. firms receiving public support derive more persistent benefits from innovation than firms which did not receive public support.

Associated Themes
  • Innovation and Exporting
Research Paper

Is There An Entrepreneurial Culture? Research Paper No 16.

Understanding the impact of national culture alone and in interaction with other contextual factors, is important for refining our knowledge of how entrepreneurs think and act. This paper presents a review of the literature on the link between cultural values and entrepreneurial beliefs, motives and behaviours. It suggests that there may not be a single entrepreneurial culture and suggests areas for future research.

Associated Themes
  • Leadership
Insight

Moving on from the ‘Vital 6%’

High-Growth Firms (HGFs) represent only a small minority - the ‘Vital 6%’ - of the UK business population yet they have a disproportionate impact on job creation and innovation. This paper confirms the headline conclusion for job creation: that is, a small number of job creating firms (mostly small firms) are responsible for a significant amount of net job creation in the UK. It also suggests the existence of a smaller group of 'extraordinarily prolific job creating firms' who were micro firms in 1998 and now employ almost 100,000 people.

Associated Themes
  • Business Demography Research Theme
Research Paper

Localisation of Industrial Activity across England’s LEPs: 2008 & 2012 .Research Paper No 15.

The Department for Business, Innovation & Skills commissioned the ERC to undertake an analysis of industrial clusters in the UK and to use the new Local Enterprise Partnerships (LEPs) as the sub-national spatial frame in England. The analysis is designed as an information source for the LEPs as they prepare their new strategic economic plans.

Associated Themes
  • Business Demography Research Theme
Research Paper

Developing Alliance Formation Process Capabilities. Research Paper No 13.

This paper examines the processes that firms use to form strategic alliances. Drawing on data from 1063 US based firms who created R&D consortia over a 22 year period, it considers whether companies replicate existing approaches, gained from prior experience, in forming subsequent alliances or whether they can develop new skills as they adapt to changing conditions. It suggests that prior experience is a significant factor affecting subsequent formation processes and longer experience tends to increase the chances that firms will replicate a given approach. It also finds that smaller firms may be more able to flex their approach.

Associated Themes
  • Leadership
Research Paper

Openness and Innovation Performance: Are Small Firms Different? Research Paper No 12.

Traditionally, literature on open innovation ( the number of links a firm has to customers, suppliers and other firms) has concentrated on analysis of larger firms. This paper explores if and how the benefits of openness in innovation are different for small firms compared to medium and large ones. It suggests that small firms can benefit disproportionately from adopting open innovation approaches but that they reach the benefits of this approach at lower levels than medium and larger firms making the choice of innovation partner critical.

Associated Themes
  • Innovation and Exporting
Insight

UK Mid-Market – ‘Overlooked Middle’ or Lair of the Hidden Champions?

This paper highlights two alternative views of the UK mid-market. The ‘overlooked middle’ perspective emphasises that UK economic policy in relation to Medium Sized Businesses (MSBs) has been symbolic rather than substantive, lacking scale and consistency. The 'Hidden Champions' perspective recognises the rapid growth of leading MSBs and the lack of acknowledgement they receive in the UK.

Associated Themes
  • Innovation and Exporting
Research Paper

Entrepreneurship as Ethnic Minority Liberation. Research Paper No 11.

Entrepreneurship has long been seen as a route to socio-economic advancement for disadvantaged communities. This paper explores to what extent ethnic minority entrepreneurship promotes socio-economic advancement and suggests that the context in which the entrepreneurship exists is an important determinant and that entrepreneurship itself cannot be seen as the only or preferred route.

Associated Themes
  • Diversity
Research Paper

Entrepreneurial Families and Households . Research Paper No 10.

The role of Households and Families in influencing entrepreneurship has long been underestimated. This paper explores the intricate relationship between the Household and the enterprise including the role it plays in identifying business opportunities and providing resources to new and existing ventures.

Associated Themes
  • Diversity
Research Paper

Who Takes Advice? Research Paper No 9.

This paper explores the characteristics of small firms who take advice and those that do not. It finds a number of factors associated with taking advice including the longevity of an owner-managers education, whether the business has growth objectives and, most significantly, a size threshold at 10 employees at which taking advice becomes much more likely. It suggests that significant challenges arise in making the transition to 10 employees or more and that further research is needed to understand this transition.

Associated Themes
  • Leadership
White Paper

Supporting Sustained Growth Among SMEs. White Paper No 7.

Among SMEs high growth is often episodic and not sustained. This paper reviews a number of international support measures designed to give SMEs the capabilities and resources to sustain fast growth.

Associated Themes
  • Business Demography Research Theme
  • Innovation and Exporting
Insight

Gearing up for Growth Vouchers

This paper suggests some key lessons for the Growth Vouchers scheme based on the experience of the Nesta Creative Credits Project.

Associated Themes
  • Innovation and Exporting
Research Paper

Private Equity, Buy-outs, and Insolvency Risk. Research Paper No 8.

Private Equity restructuring using debt has been criticised for increasing financial distress and bankruptcy. This paper compares the insolvency hazard of various buy-out types within the corporate population and investigates the risk profile of the companies pre-buyout.

Associated Themes
  • Finance and Governance Research Theme
Research Paper

Burden or Benefit? Regulation as a dynamic influence on SME performance. Research Paper No 7.

This paper contributes to contemporary debates concerning the impact of regulation on small business performance in the UK.

Associated Themes
  • Business Demography Research Theme
Research Paper

Paradigm Shift or Business as Usual? Research Paper No 6.

This paper explores the claims of a ‘paradigm shift’ towards firms using open innovation as a conscious strategic choice.

Associated Themes
  • Innovation and Exporting
Research Paper

HRM, Organisational Culture and Entrepreneurial Capabilities. Research Paper No 5.

This paper explores the role of individual and collective knowledge processes in the capacities for acquiring, integrating and exploiting new knowledge and the influences they exert on long term organisational performance and growth.

Associated Themes
  • Leadership
Research Paper

An Experimental Approach to Industrial Policy Evaluation: the Case of Creative Credits. Research Paper No 4.

This paper considers the arguments for applying experimental methods to industrial policy measures and proposes an experimental policy evaluation approach

Associated Themes
  • Innovation and Exporting
Research Paper

Understanding Fear of Failure in Enterpreneurship. Research Paper No 3.

There is a broadly held assumption within the entrepreneurship literature that fear of failure is always and only an inhibitor of entrepreneurial behaviour. This paper provides a theoretic framework of the antecedents, moderators and consequences of fear of failure.

Associated Themes
  • Leadership
Research Paper

Accounting for Job Growth .Research Paper No 2

It has recently been recognised that conclusions about firm size were confounded by the effect of the age of the firm. This paper explores the role of size, controlling for age, by comparing the cohorts of firms born in 1998 over their first decade of life.

Associated Themes
  • Business Demography Research Theme
Research Paper

Business Survival and the Role of Boards. Research Paper No 1.

This paper examines the question of whether family firms are more likely to survive than non-family firms, focusing on the role of board composition.

Associated Themes
  • Finance and Governance Research Theme
White Paper

Firm Dynamics and Job Creation in the UK. White Paper No 6.

A consistent theme in the discussion of attempts to stimulate economic recovery in the UK is a recognition of the need to unlock the growth potential of the private sector. This paper explores the simple question – “What types of firms create the most jobs in the UK economy?”

Associated Themes
  • Business Demography Research Theme
White Paper

SME Innovation, Exporting and Growth. White Paper No 5.

SMEs which have a track record of innovation are more likely to export, export successfully and generate growth from exporting than non-innovating firms. This paper explores the existing evidence.

Associated Themes
  • Innovation and Exporting
White Paper

What Do We Know About The Relationship Between Entrepreneurial Finance and Growth? White Paper No 4.

This paper explores what we know about the relationship between entrepreneurial finance and growth in SMEs in the UK.

Associated Themes
  • Finance and Governance Research Theme
White Paper

Diversity and SMEs. White Paper No 3.

This paper explores the existing evidence, complexity and policy tensions that exists for diverse groups operating SMEs in the UK.

Associated Themes
  • Diversity
White Paper

Entrepreneurial Leadership, Capabilities and Growth. White Paper No 2.

SME growth depends upon substantive growth capabilities, which are shaped by the upstream issues of leadership and capability development. This paper presents a review of the existing evidence.

Associated Themes
  • Leadership
White Paper

Growth and Growth Intentions .White Paper No 1.

This white paper summarises what we know about the connection between entrepreneurs’ growth intentions and realised enterprise growth.

Associated Themes
  • Ambition