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

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

Published: 13 June 2015

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.

Published: 19 April 2020

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