Stephen Roper

Director - ERC

Stephen Roper is Professor of Enterprise at Warwick Business School, Director of the Enterprise Research Centre - ERC (www.enterpriseresearch.ac.uk) and Co-Director of the National Innovation Centre for Rural Enterprise (NICRE)

Contact Details

Email:[email protected]
Telephone:024 765 22501
Twitter: twitter.com/@SteveRop

Biography

Stephen Roper is Professor of Enterprise at Warwick Business School, Director of the Enterprise Research Centre – ERC (www.enterpriseresearch.ac.uk) and Co-Director of the National Innovation Centre for Rural Enterprise (NICRE). He is an economist with degrees from the University of Durham, Oxford University and LSE. Stephen joined Warwick in 2008. Prior to this Stephen was Professor of Business Innovation at Aston Business School and before that he was Assistant Director of the Northern Ireland Economic Research Centre, Belfast.

Stephen has over 30 years’ experience of researching issues related to small and medium enterprises, innovation and innovation policy in the UK and internationally and has published widely in both areas. He has led over 70 externally funded projects, has been a member of a number of government advisory boards, and regularly acts as a consultant for OECD and the World Bank on issues related to small business development and innovation policy including projects in Austria, Abu Dhabi, Mexico, Israel, Columbia and Poland, Austria and Canada over the last four years. Stephen is an Academician of the Academy of Social Sciences and a Fellow of the RSA.

Insight

International sectoral R&D trends after the global financial crisis: What can we learn for current policy?

In this Insight paper we review international evidence drawn from OECD databases which provide comparable time-series on sectoral R&D trends for the period 2008-2016. Our central focus is how R&D trends in UK sectors in the UK differed from those in other countries in the aftermath of the great financial crisis.
Total business R&D spending in the UK fell marginally from 2008-10 before recovering consistently to reach a level 23 per cent higher than that in the recession by 2016. R&D spending in services recovered significantly more quickly than that in manufacturing sectors, some of which have never regained the volume of R&D investment which they had in the recession.
In manufacturing, the poorer performing sectors have tended to be more traditional foundation industries. In services, poor performing sectors have tended to be those which grew rapidly in the pre-recession period – information and communication and financial services.

Authors
Associated Themes
  • Innovation
Research Report

Employee well-being, mental health and productivity in Midlands firms: The employer perspective

This report focuses on the engagement, attitudes and behaviours of around 1,900 employers across the East and West Midlands to employee well-being and mental health. It also considers the effects of well-being and mental health on organisational performance and productivity. Data for the study was collected through telephone interviews and in-depth case studies in the three months immediately before the Covid-19 virus lockdown. The report therefore provides a pre-Covid-19 baseline which may be a useful comparator in months and years to come, when considering the impacts of the pandemic on employers and employees

Author

ERC,

Associated Themes
  • Productivity and performance
Insight

R&D and innovation after Covid-19: What can we expect? A review of trends after the financial crisis

Data from successive UK Innovation Surveys suggests that the proportion of innovation active firms fell 58 per cent during the last recession (2008-10) with parallel falls in product/service innovation (26.6 per cent), process innovation (22.6 per cent). The percentage of firms engaging in less financially demanding wider innovation – e.g. in marketing or strategy – increased by 14 per cent to the recession period.
Recovery speeds varied.The pre-recession proportion of innovation active firms was never fully regained and the proportion of firms doing product/service innovation and process innovation took more than six years to recover pre-recession levels. The percentage of firms doing wider innovation grew throughout the post-recession period.

Authors
Associated Themes
  • Innovation
Insight

Business Dynamism and COVID-19 – an early assessment

How will Covid-19 affect business dynamism in the UK? Although, this question is yet to be answered, this paper aims to provide an early assessment by comparing company incorporations and dissolutions in the first quarter of 2020 with the same period in 2019 using the latest available data from the FAME dataset. We observe a drop in incorporations and an increase in dissolutions. The analysis shows that there has been a 70% increase in the number of company dissolutions in March 2020 compared to March 2019. In absolute terms, London had the biggest increase with over 6,400 more dissolutions. In relative terms, this sharp increase was particularly striking in the West Midlands and Wales both of which experienced more than a 100% increase in dissolutions. The sectors particularly influenced by this trend are Wholesale & Retail, Professional Services, Transportation & Storage, Information & Communication and Construction. One important point is that the increase in company dissolutions is driven by young firms which appear as the most vulnerable when facing uncertainty and the current unprecedented challenges.
The UK Government has unveiled a substantive package of support for UK firms, but at the time of writing many firms are struggling to access this assistance and there are some obvious gaps in the range of initiatives announced. If those shortcomings are not remedied quickly, it is foreseeable that we will continue to see a long, slow decline in the number of private-sector firms that support millions of jobs across the economy. In that context, rather than seeing a V-shaped downturn and rebound as some economists such as the OBR have predicted, we could instead see an L-shape recession dragged down by a net loss of companies over a long period.

Associated Themes
  • Business Growth
  • Productivity and performance
Research Paper

What’s in a name? The impact of Geographical Indications of Origin on producer growth and food heritage. Research Paper No 86

Post-Brexit the UK government has committed to the implementation of a new UK system of Protected Food Names (PFNs). These will replace the EU Geographical Indications of Origin (GI) regulations for sales in the UK market. GIs, and potentially PFNs, can have significant benefits. Here, we combine case study and econometric methods to consider GIs’ impact on preserving and strengthening food heritage and producer growth. Our case study analysis suggests that GIs can play an important role in the heritagisation of food products although this depends critically on a range of operational factors

Associated Themes
  • Business Growth
  • Productivity and performance
Policy Briefing

Small firms and patenting revisited

In order to observe a patent application at the firm level two conditions need to be met: new products need to be of patentable quality, which depends both on the degree of novelty of innovations and on the total number (portfolio) of innovations; and the benefits of patents need to be higher than the costs of owning them. Analyzing the patent propensity of small and large UK firms using a novel innovation-level survey (the SIPU survey) linked to Community Innovation Survey data we find that when we consider the whole innovation portfolio smaller firms do patent less than larger firms. However, using data on individual innovations, we find that smaller firms are no less likely to patent any specific innovation than larger firms. We argue that size differences in the probability to patent relate primarily to the ‘portfolio effect’, i.e. larger firms generate more innovations than smaller firms and therefore are more likely to create one or more which are patentable. As for the decision to patent a patentable innovation, we find that cost barriers, more than issues of innovation quality or enforceability, deter small firms from patenting specific innovations. Measures to address the costs of patenting for smaller firms – perhaps by considering patents as eligible costs for R&D tax credits – and/or subsidizing SMEs’ participation in IP litigation schemes may both encourage patent use by smaller firms.

Associated Themes
Research Paper

Small firms and patenting revisited. Research Paper No 85

In order to observe a patent application at the firm level two conditions need to be met: new products need to be of patentable quality, which depends both on the degree of novelty of innovations and on the total number (portfolio) of innovations; and the benefits of patents need to be higher than the costs of owning them. Analyzing the patent propensity of small and large UK firms using a novel innovation-level survey (the SIPU survey) linked to Community Innovation Survey data we find that when we consider the whole innovation portfolio smaller firms do patent less than larger firms. However, using data on individual innovations, we find that smaller firms are no less likely to patent any specific innovation than larger firms. We argue that size differences in the probability to patent relate primarily to the ‘portfolio effect’, i.e. larger firms generate more innovations than smaller firms and therefore are more likely to create one or more which are patentable. As for the decision to patent a patentable innovation, we find that cost barriers, more than issues of innovation quality or enforceability, deter small firms from patenting specific innovations. Measures to address the costs of patenting for smaller firms – perhaps by considering patents as eligible costs for R&D tax credits – and/or subsidizing SMEs’ participation in IP litigation schemes may both encourage patent use by smaller firms.

Associated Themes
  • Innovation
Policy Briefing

Pathways to efficiency, pathways to growth: Evidence from the UK Innovation Survey

Previous studies have suggested there is little correlation between efficiency and growth at firm level. Here, using data from successive waves of the UK innovation Survey we consider two questions. First, do different types of innovation have different effects on efficiency and growth? Secondly, does the source of firms’ R&D finance matter?. Is there a difference between the innovation effects of publicly-supported and wholly-privately-funded R&D?

Associated Themes
  • Innovation
  • Productivity and performance
Research Paper

Pathways to efficiency, pathways to growth: Evidence from the UK Innovation Survey. Research Paper No. 83

Previous studies have suggested there is little correlation between efficiency – measured by sales per employee - and growth at firm level. Here, using data from successive waves of the UK innovation survey we consider two questions.
- Do different types of innovation have different effects on efficiency and growth?
- We consider whether the source of firms’ R&D finance matters.
Together our results suggest the importance of aligning innovation investments with broader corporate and policy objectives and the potential value of policy support for process innovation to achieve positive growth and efficiency outcomes.

Associated Themes
  • Innovation
  • Productivity and performance
Research Report

Understanding value added per employee in six UK sectors: The insiders’ view

The UK’s productivity puzzle has attracted much attention which has focused on the growing gap in productivity between the UK and its key international competitors. Often denominated in terms of ‘value added per employee’ or ‘value added per hour worked’ – both measures of labour productivity - the UK’s productivity slowdown has been longstanding but has been particularly notable during the post-recession period.

Statistical analyses have emphasised that ‘the vast majority of labour productivity growth weakness arises due to changes in productivity growth within detailed industry groups’. These variations in sectoral productivity trends since the recession provide the starting point and rationale for this report. What are the origins of these diverse trends? Are these the consequence of intra-firm issues linked to leadership and management or technology? Or, sector specific factors such as regulatory regimes or market competition?

Our approach is primarily qualitative and draws on the experience and knowledge of industry insiders in six sectors – business leaders, analysts, commentators and policy-makers. Detailed conversations were held with over 80 informants across six sectors between February and April 2019. This type of qualitative approach is of value to both reflect the wide range and variety of influences on value added and how these influences have and are changing.

Author

ERC,

Insight

Does the City of Culture (COC) create long-term benefits? Comparing the performance of Derry-Londonderry to other short-listed cities. ERC Insight Paper

Evidence on the long-term effects of Cities of Culture (COC) is limited. Here, we compare the pre- and post-COC performance of the UK COC for 2013 Derry-Londonderry (D-L) with that of the other shortlisted cities. There is some evidence that despite weaker growth performance prior to the COC the post-COC GDP growth of D-L has been significantly stronger. This post-COC growth effect is particularly evident in Distribution, transport, accommodation and food and construction. The COC also led to a step-change in visitor numbers to D-L, a positive effect which persisted through to 2016 at least. Job creation through inward investment was also stronger in D-L in the post-COC period. We cannot establish any direct causal connection between COC 2013 and these trends but suggest that the evidence does at least suggest a prima facie case for the positive longer-term benefits of COCs

Associated Themes
Research Paper

Getting the right recipe: collaboration strategies for radical and incremental innovators in services. Research Paper No 77

Successful innovation requires both effective idea generation and commercialization. Here, we investigate the benefits of alternative collaboration strategies across the idea generation and commercialization stages of the innovation process. Does collaboration generate complementarities between stages of the innovation process? Or, as external collaboration is costly and risky, can having too many partners be detrimental for innovation performance? 

** DUE TO CURRENT PUBLISHING RESTRICTIONS THE FULL PAPER IS ONLY AVAILABE ON REQUEST**
Please email [email protected] for the full paper.

Associated Themes
  • Innovation
Research Report

State of Small Business Britain 2019

The State of Small Business Britain report 2019.
The increasing levels of political uncertainty in the UK sets the context for this review of trends in the small business community in mid-2019.
We seek to provide an overview of business confidence and the extent to which that is reflected in the key datasets we have been monitoring for many years. We focus on the following:
• Business Confidence
• Job Creation and Destruction
• Entrepreneurship
• Firm Growth
Alongside this we will highlight some of the key messages coming out of our core research programme, which provide insights into current debates on high-growth, productivity and management practices.

Author

ERC,

Research Report

Benchmarking local innovation – the innovation geography of England: 2019

Firms’ ability to innovate successfully plays an important role in their ability to sustain growth and competitiveness. This report provides innovation benchmarks for local areas in England, updating our previous analysis published in 2017.
The benchmarks are based on a new analysis of data from the 14,000 firms which responded to the UK Innovation Survey 2017. The analysis is designed to provide representative results for each local economic area. Information is provided on ten benchmarks including new indicators for organisational innovation.
Three benchmarks focus on forms of organisational and marketing innovation. Three further metrics relate to the inputs and structure of firms’ innovation activity with a focus on R&D, design investment and collaboration. Arguably the most important, the remaining four metrics relate to the outcomes from firms’ innovation reflecting both the extent of innovation across the population of firms as well as the success of innovation.

LEP Radar charts 2019 available at:
http://www.enterpriseresearch.ac.uk/wp-content/uploads/2019/06/LEP-radar-charts-2019.xlsx


Author

Roper, Stephen, Bonner, Karen

Research Paper

Innovating into trouble: When innovation leads to customer complaints. Research Paper No 76

This paper examines the unintended consequences of innovation. We show that innovative activity can have adverse outcomes in the form of increased customer complaints with the potential for reputational and financial damage. Complaints may arise directly from adverse reactions to innovative services or service failures where firms prioritise innovation. Our empirical analysis focuses on legal services in England and Wales. Survey data on innovation by legal service providers is matched with complaints data from the UK Legal Ombudsman. This allows us to identify causal links between innovation activity and subsequent customer complaints. Our analysis reveals that higher levels of innovation activity increase the probability and number of consumer complaints. We identify how firms can reduce the potential for consumer complaints by adopting collaborative innovation strategies and engaging in multi-functional teamworking. Our results have strategic, regulatory and policy implications

Associated Themes
Research Paper

Skills, management practices and productivity in SMEs. Research Paper No 75

Public policy related to the performance and growth of existing small firms has focused on improving access to finance and more recently on reducing regulatory burdens. However, there has also been an increasing recognition of the importance of management knowledge, skills and the adoption of best management practices. In this paper we match survey data on management skills and practices in a large group of SMEs with longitudinal data on productivity to examine the causal links between skills and management practices in 2014 and productivity performance in 2017. Our focus is on a group of firms led by a single entrepreneur or owner-manager.

Associated Themes
Research Report

Micro-Businesses in Ireland: From Ambition to Innovation

This report presents new information on the ambitions, growth aspirations and innovation levels of Irish micro-businesses.
Micro businesses, typically businesses with 9 employees or less, play an important role in stimulating innovation, employment and growth. Despite this, relatively little is known about this important segment of the business population as such businesses are often excluded from official surveys. This report presents the findings of a survey conducted on micro-businesses in Ireland.
Ambition plays an important role in ensuring businesses achieve their full potential. The survey conducted during the course of this project reveals that one in four micro-businesses in Ireland want to build a national or international business. Within Ireland, micro-businesses in the West are amongst the most ambitious nationally. Interestingly, however, business and personal ambitions are broadly similar for male and female micro-businesses owners. For many people flexibility is a key personal motivator for running their own micro-business.
This report provides the first detailed information on the uptake of digital technologies by micro-businesses in Ireland. The results suggest that Irish micro-businesses perform well, adopting digital technology at a faster rate than their counterparts in the UK and particularly the USA. Micro-businesses in Ireland also compare well internationally with respect to introducing new or improved products and services. Finally, the report emphasises the importance that micro-businesses, due to their scale and access to technology, should not be left behind larger businesses in the global digital revolution.
This report describes new and unique survey data on established micro-businesses with 1-9 employees in Ireland. The report focuses on the ambitions – business and personal- of the owners; as well as innovative activity and the uptake of digital technology within micro-businesses. In Ireland, most micro-businesses are mature, and many are home-based. They are closely related to the families which own and run them.

This report represents a collaboration between University College Cork and the UK Enterprise Research Centre. Views in the report are those of the authors alone and do not necessarily reflect those of the sponsoring organisations.

Author

School, Cork Univeristy Business

Research Report

Understanding business resilience among under-represented groups in London

Supported by the JPMorgan Chase Foundation this report highlights the preliminary findings from a new survey of business adversity and resilience in 600 small businesses located in six London boroughs, three low-income and three middle-income. The study aims to identify the characteristics and strategies that foster resilience survival and growth in SMEs, and to develop practical toolkits to support under-represented entrepreneurs in their efforts to develop more resilient businesses. Four key findings emerge:

• Male and female-led businesses were equally likely to have experienced an existential threat to the survival of their business in the past five years. However, male business owners judged the potential for future threats to be less significant than their female counterparts.
• Ethnic-led businesses were significantly more likely than non-ethnic led businesses to have experienced a threat to the survival of their business. This effect was more evident for younger ethnic businesses and those located in low-income boroughs.
• Ethnic-minority business owners also judged the potential for future threats to be greater than their non-ethnic counterparts. Key issues included increased competition from new and existing sources, cost rises, problems with premises and changes in regulation or legislation.
• Psychological measures of personal resilience on average vary little between male and female business leaders and those from ethnic and non-ethnic groups. There is more significant variation within each group.

Author

Wishart, Maria, Roper, Stephen, Hart, Mark

Research Report

Understanding micro-businesses in Northern Ireland

Drawing on new survey data this report provides a profile of micro-businesses with 1-9 employees in Northern Ireland in comparison to UK regional, Irish and US benchmarks. The report provides the first evidence on levels of business ambition, resilience and digital adoption for this group of firms. The Micro-business Britain Survey covered 6,200 firms in the UK - 495 in Northern Ireland – 1,500 companies in Ireland and 2,000 in the US.

Author

Dundas, Nola Hewitt-, QUB,, Roper,WBS, ERC and Stephen, ERC,

Research Paper

Industry 4.0 is coming: Is digital adoption a new mechanism linking entrepreneurial ambition to business performance? Research Paper No 72

The advent of Industry 4.0 emphasises the potential importance of digital adoption for sustained competitiveness. Here, based on new survey data for over 9,000 firms in the UK, Ireland and USA we consider whether digital adoption provides a new mechanism through which firms’ growth ambition is realised. Our analysis emphasises the commonality of factors linked to adoption in each of the three countries. Four key conclusions emerge.

Associated Themes
  • Innovation
SOTA Review

Innovation and Quality Management – What are the links? SOTA No 1

TQM and ISO9000 are two of the most widely adopted quality improvement approaches. What does the evidence suggest about the relationship between these quality improvement approaches and firms’ innovation outcomes? Internationally, SOTA studies of ISO9000 adoption suggest small positive innovation benefits of 2-13 per cent. International studies of TQM adoption also suggest positive innovation benefits of 4-7 per cent with the strongest benefits arising from the ‘soft’ elements of TQM related to work practices and cultural change. A lack of both survey and population data mean we have no evidence of the implications of either ISO9000 or TQM for innovation and firm performance in the UK.

Authors
Associated Themes
  • Innovation
Insight

Exploring the links between design investment, innovation and productivity

The case studies and design survey undertaken for the “Design Economy 2018” have suggested the different mechanisms through which design and designers can contribute to firms’ innovation and performance. Here, we use data from the UK Innovation Survey to undertake a causal analysis of the links between design, innovation of different types and productivity. Our analysis draws on data from around 15,000 UK companies which responded to two consecutive waves of the UK Innovation Survey.
The starting point for our analysis is the UK Innovation Survey indicator of whether or not each firm ‘engages in … design activities, including strategic, for the development or implementation of new or improved goods, services and processes’. Are firms which are engaging with design more likely to be innovating? More specifically, we explore whether firms which are engaging with design are more likely to be engaging in product or service innovation, process innovation and organisational innovation. The second stage of our analysis explores the extent to which each of the three types of innovation results in improvements in firms’ productivity.

Authors
Associated Themes
  • Innovation
Research Report

State of Small Business Britain Report 2018

The report brings together a range of the latest data and insights on the growth and performance of UK SMEs. It sets out key SME trends based on a round-up of the latest research evidence including analysis of the Business Structures Database and the Longitudinal Small Business Survey. It also reports on the key findings from the ERC’s first Micro-business Britain survey, and from the 2018 UK Local Growth Dashboard – an annual publication which presents growth metrics for start-ups and existing firms across a range of sub-national geographies, including LEP areas.
Launched at the ERC’s Annual State of Small Business Britain Conference 2018.

Author

ERC,

Insight

Recent trends in the digital creative sector in Coventry and Warwickshire

The digital creative sector plays a key role both a provider of jobs in its own right and also as an enabler of digital innovation in other sectors. In this note we provide a brief statistical profile of the development of the digital creative sector in Coventry and Warwickshire over the last decade. This is one of a series of papers ERC will be publishing in the run up to Coventry City of Culture 2021.

Authors
Associated Themes
Research Paper

Export status and SME productivity: learning-to-export versus learning-by-exporting. Research Paper No 71

Exporting offers firms the opportunity both to maximise profits from their existing products and services and, through ‘learning-by-exporting’, to identify new innovation opportunities. In this paper, we exploit a unique data source to examine the strategic choices of smaller firms in terms of exporting or non-exporting. We pay particular attention to a substantial group of export-capable firms which state that they have products or services suitable for exporting but have no intention to export.

Associated Themes
Research Paper

Using RCTs as a research method for SME policy research: The UK experience. Research Paper No 66

Randomised controlled trials or RCTs have a number of theoretical advantages over more standard econometric evaluation approaches, particularly the avoidance of selection bias. Over the period since 2010 five publicly funded RCT projects and a range of communication trials have been undertaken in the UK designed to test aspects of small business and innovation policy. We briefly describe the trials and identify the operational and tactical issues which arose. Experience from medical trials also suggests the value of replication and synthesis, epitomised in the Cochrane Reviews.

Authors
Associated Themes
Research Paper

Organisational capital, exploration and exploitation: Econometric evidence for UK services firms. Research Paper No 65

Across all sectors, firms face pressure to serve their customers better by innovating in the delivery of goods and services. Undertaking innovation involves a range of different activities, however, from exploratory knowledge creation or acquisition to commercial exploitation. This may create tensions due to the very different resource and organisational requirements of effective exploration and exploitation. Here, we draw on new survey data for five UK service sectors which separately identifies firms’ exploratory and exploitative activities, to identify those organisational practices which are associated with effective exploration and effective exploitation. Strong contrasts emerge, with more ‘organic’ practices associated with exploration and more ‘mechanistic’ practices better supporting exploration. We find no evidence, however, that those organisational practices associated with effective exploration have any detrimental effect on exploitation, and vice versa. Our results suggest very different organisational strategies for services firms adopting business models which emphasise exploration, exploitation or both.

Associated Themes
Research Paper

Assessing the business performance effects of receiving publicly-funded science, research and innovation grants – Research Paper No 61( Revised )

UK Research Councils spend around £1.7bn pa on supporting research. Here, we provide the first comprehensive assessment of these research grants on the performance of UK firms. Using data on funding and partnership from Gateway to Research on all funded projects by the UK Research Councils over the 2004 to 2016 period and business performance data from the Business Structures Database we have applied a difference-in-differences propensity score matching technique to evaluate the performance of UK firms who participated in publicly-funded research projects. Our analysis suggests five key conclusions. First, firms who participated in research projects funded by UK research councils grew their turnover and employment 5.8-6.0 per cent faster in the three years after the project, and 22.5-28.0 per cent faster in the six years after the project, than similar firms which did not receive support. Second, the impact of participating in projects is larger for firms in high-tech manufacturing and knowledge intensive services. Third, we find evidence that the impact of participating in projects is larger for small firms and those with lower starting productivity (turnover per employee). Growth impacts on firms in the top quartile of the productivity (turnover per employee) distribution are small. Fourth, support relevant to businesses is provided largely by EPSRC and Innovate UK. Participation in projects funded by both organisation increases both employment and turnover growth in the short and medium terms with only marginal differences in their impact. Fifth, the effects of grants vary depending on the size of the project. Participating in projects involving small and very large grants have smaller growth effects than medium-sized support packages. Our results have implications for the extent and targeting of future Research Council funding.
Our analysis is subject to a number of caveats. First, data limitations mean that we measure economic impacts using turnover and employment data rather than value added per worker or hour worked. Secondly, at this point we only consider the direct impacts on firms. Spillovers or multiplier effects may significantly enlarge these effects; displacement may reduce them. Both will be considered in a future study. Thirdly, data linking and the timing of some grant awards in recent years mean we are able to consider growth effects for only around two-thirds of firms which participated in publicly funded science and innovation projects.

Associated Themes
  • Innovation
Research Paper

Home Alone: Innovation and sales growth intentions among the sole self-employed. Research Paper No 59

It is widely known that solo self-employed entrepreneurs enjoy non-pecuniary benefits from their employment status and earn less compared to those employed. They have greater ‘freedom and autonomy’ in running their business and as such they pursue their intrinsic commercial ambitions relying on their experience, abilities and exploiting the available opportunities from their external environment. In this paper we argue that solo self-employed entrepreneurs’ growth ambitions shape their future innovation strategy. We develop a theoretical framework and empirically analyse the relationship and the determinants of innovation and growth intentions using a large sample of UK self-employed entrepreneurs. In doing so we extend the theory of planned behaviour to incorporate the role of entrepreneurs’ past experience in innovation and growth in shaping their corresponding future intentions. Our empirical results suggest that past innovation performance and achieved growth rates shape future entrepreneurial intentions and ambitions through an adaptive learning process given the level of entrepreneurial capabilities and external environment opportunities.

Associated Themes
  • Innovation
Research Report

Benchmarking Local Innovation

Firms’ ability to innovate successfully plays an important role in their ability to sustain growth and competitiveness. This report provides innovation benchmarks for local areas in England, updating our previous analysis published in 2015.
The benchmarks are based on a new analysis of data from the 14,000 firms which responded to the UK Innovation Survey 2015. The analysis is designed to provide representative results for each local economic area. Information is provided on ten benchmarks including new indicators for organisational innovation.
Three benchmarks focus on forms of organisational and marketing innovation. Three further metrics relate to the inputs and structure of firms’ innovation activity with a focus on R&D, design investment and collaboration. Arguably the most important, the remaining four metrics relate to the outcomes from firms’ innovation reflecting both the extent of innovation across the population of firms as well as the success of innovation.
Our analysis highlights the diversity of innovation activity across the UK. Some local areas are marked by strengths in organisational innovation but weaker elsewhere; others exhibit higher levels of collaborative behaviour and R&D. Both suggests the value of differentiated local innovation strategies which can build on existing strengths and remedy weaknesses.

Download the LEP Radar Chart 2017 data here : https://www.enterpriseresearch.ac.uk/wp-content/uploads/2017/06/LEP-radar-charts.xlsx

Author

ERC,

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
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 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
Research Paper

Market failures in open innovation: implications and policy responses. Research Paper No 49

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 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

Roper, Stephen, Love, James, Bourke, Jane

Associated Themes
  • Innovation
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
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
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
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
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
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
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
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
Research Report

ERC Annual Reports

The Enterprise Research Centre (ERC) was launched in January 2013 to deepen understanding in the UK of the factors affecting small and medium sized business
investment, performance and growth. The Centre is a collaborative venture between five University Business Schools: Warwick,Aston, Imperial, Strathclyde and Birmingham. ERC aims to build long term research capability
which will act as a focal point for world-class research on SMEs in the UK and internationally. Our work informs stronger SME strategy and policy development in the UK by developing and
drawing on the evidence base and providing commentary, evaluation and challenge to policy makers and those serving small and medium sized firms.
The ERC’s research programme is distinctive in that it aims to place SMEs in their operating context recognising that:
 growth is strongly influenced, both positively and negatively, by the business eco-system;
 growth depends significantly on the role of SME leadership and capability;
 different SMEs have very different ways of growing – organically or by acquisition – and the barriers and enablers of each type of growth, and in each type of firm, may be very different.

Download the 2013/2014 report here : https://www.enterpriseresearch.ac.uk/wp-content/uploads/2015/03/ERC-ANNUAL-REPORT-2013-14.pdf
Download the 214/2015 report here : https://www.enterpriseresearch.ac.uk/wp-content/uploads/2015/10/ERC-ANNUAL-REPORT-2014-15.pdf

Author

ERC,

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
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
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
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
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
Research Paper

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

The Legacy of Public Subsidies for Innovation

Authors
Associated Themes
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
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
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
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
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

Authors
Associated Themes
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
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
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.

Authors
Associated Themes
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 Growth
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.

Authors
Associated Themes
Research Report

Benchmarking local innovation – the innovation geography of the UK

Benchmarking local innovation – the innovation geography of the UK is the first ever study mapping where firms developing new British goods and services are concentrated. The UK has an ‘arc of innovation’ stretching from Cambridge through the South-East Midlands and along the M4 corridor.
Key nodes of the arc of innovation include well-known university spin-off centres Oxford and Cambridge, as well as more surprising areas like Gloucestershire and Milton Keynes.

Author

ERC,

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
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

Authors
Associated Themes
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