Written evidence from "Enterprise
for All" Network
EXECUTIVE SUMMARY
The Enterprise for All Network is a group of
78 "enterprise" experts and providers who are concerned
about the place of enterprise promotion and business support within
the new LEPs. Over the past few weeks we have shared views and
experience, while contributing to, monitoring and discussing developments
of LEPs at national and local levels. These discussions have taken
place via the formation of our network on LinkedIn. The group's
activity can be viewed at http://linkd.in/cew7KY This paper summarises
key conclusions of the group to date.
We have identified seven principles that we
believe should be adhered to in shaping the delivery of enterprise
support within LEPs:
— Enterprise and Business Support must
be central to LEPs' role.
— Engagement not just representation.
— Localism not parochialism.
— Enterprise Inclusion is a competitive
opportunity.
— Take micro-business seriously.
— Procurement and Local Business.
We submit this evidence as private individuals
and our views are not necessarily those of the organisations we
work for. This paper forms evidence for the select committee but
we also see its contents as a briefing paper for the consideration
of the nascent LEPs around the country and their advisers.
EVIDENCE
Our primary concern is the first topic that
the Committee will consider: The functions of the new LEPS and
ensuring value for money. Based on our experience, research and
best practice we would urge the Committee to consider the following
points:
1. Enterprise and Business Support must be
central to LEPs' role
Local enterprise development is increasingly
important. In times of dynamic change, entrepreneurial people
and communities become even more critical drivers of local employment
and growth.
The coalition government has intimated that
"business support" is a national, rather than a regional
or local issue and that it will be dealt with by re-defining the
national web-based business support offer and a welfare to work
programme. At the same time it is suggested that "enterprise"
and "employment" may be included within the broad sweep
of activities which LEPs may deal with. Various, sometimes contradictory
announcements have created a situation where enterprise does not
appear to be regarded as a priority and is indeed missing from
many early LEP plans. LEPs need clarity that promotion of enterprise
and business support is central to their role.
Indeed we contend that in the long-term job
creation via fostering new enterprises and supporting indigenous
business growth provides better returns than those from inward
investment.
Last month the Harvard Business Review reported
that:
The Secret to Job Growth: Think Small
With job growth continuing to lag even as the
economy picks up, local communities will be tempted to resume
"smokestack chasing"—using tax breaks to attract
big employers. That's a misguided approach.
Our research shows that regional economic growth
is highly correlated with the presence of many small, entrepreneurial
employers—not a few big ones. In fact, a study of U.S. metro
regions showed that cities whose number of "firms per worker"
was 10% higher than the average in 1977 experienced 9% faster
employment growth between 1977 and 2000.
Data can be misleading, of course, so it's reasonable
to wonder whether industry structure, tax policy, or some other
special circumstance skewed the results. The answer is no: Even
adjusting for such variables, the relationship between small firms
and job-growth rate stands ...
There is unquestionably a need for real investment
and appropriate support for small firms and start-ups, now more
than ever.
2. Engagement not just representation
Government has invited civic and business leaders
to work together in forming LEPs. However 96% of all private sector
firms are micro-businesses, employing less than 10 people. Those
firms provide 26% of all UK jobs and over a fifth of business
turnover. Almost 75% of private businesses have no employees and
those businesses are growing in number at a much greater rate
than other businesses. The focus on business "leadership"
however largely excludes this vast majority of private businesses—who
are less likely to be members of the main representative business
bodies. LEPs' will need a direct link with the full range of local
business through mechanisms such as: ongoing effective broad-based
consultation, a business forum, and an online social network.
They will also need to assess long-term impacts which should include
social return on investment (SROI) and not (just) the usual often
distorting short-term targets such as Gross Value Added).
3. Localism not parochialism
Localism is an important principle, which will
help to overcome one of the major short-comings of national and
regional approaches to business support and promotion—formulaic
"one-size fits all" approaches which sap rather than
motivate creativity and entrepreneurship. Responding to local
conditions and demand is critical. However the flip side of this
is a danger of significant inefficiencies and financial waste
if LEPs "reinvents the wheel". Within a localised framework
of development and support, a national mechanism for capacity
building, sector training and development and quality standards
will be very important to ensure that LEPs are effectively adapting
national and international best practices and maintaining and
developing their own local activities at the very highest levels.
The use of locally-generated interventions such as Enterprise
Bonds and Voucher schemes for local businesses to access business
support could form part of "the response to local conditions".
4. Enterprise Inclusion is a competitive
opportunity
While the Regional and Nationally-led approach
to enterprise promotion and business support had significant weaknesses,
one area where it was able to make some good progress was in the
promotion and delivery of enterprise and business support to disadvantaged
and under-represented groups (including women, people with disabilities
and some minority ethnic groups). It has also become clear from
various major research reports and reviews that untapping entrepreneurial
potential from those groups represents a significant competitive
opportunity for the UK economy.
Development and piloting activities have been
undertaken over the last few years to improve services for those
groups and excellent progress has been made. There is a real danger
of such groups at the "margins" becoming even more marginal
in a local microcosm. To counteract this we recommend that the
Coalition Government develop a strategic approach to improved
competitiveness through inclusive enterprise, including capacity
building and quality standards for LEPs and their partners. The
valuable work done to date by agencies such as PRIME and the Black
Training & Enterprise Group should not be overlooked in this
regard (see http://bit.ly/bJ1okC)
5. Enterprise for All
The Coalition Government has rightly acknowledged
the value of local ownership and leadership of local economic
development. People do not adhere to a "one size fits all"
nationally defined view. Nowhere is this more relevant than in
enterprise and business ownership. We hope that the localised
ethos of LEPs will set the culture for a client-centred approach
to business support service delivery, which:
— Recognises and responds to individual
needs.
— Is not delivered to people but with them.
— Is aware of how language can attract
or dissuade people from using enterprise services
— Supports personal development and personal
needs that affect and are affected by their enterprise goals;
6. Take micro-business seriously
As outlined above, 75% of UK private businesses
are sole traders and this comprises the fastest growing group
of UK businesses. 2.5 million businesses are based in the owner's
home, a figure that grew by 16% in 2008 alone. Despite their impact
this group of businesses are often dismissed as "lifestyle"
businesses and denied support opportunities. While some of those
businesses do become high-growth businesses, many choose a slower
growth trajectory and often growth may be obscured by outsourcing
and micro-business partnerships. Others are moving from welfare
benefits, supplementing retirement income or achieving ambitions.
They are all worthwhile businesses. They represent people taking
risks and creating their own livelihoods at the cutting edge of
social and economic change. Yet support structures are stuck a
generation out of date (witness the lack of benefit tapers available
to people wishing to start their own business) We would like to
see LEPs developing 21st century support and infrastructure for
micro businesses: IT, workspace and business support.
7. Procurement and local business
Creating a "sense of place" by retaining
money, jobs and investment within a given locality is a key aspect
of successful regeneration. We would like to see wholesale adoption
and adherence to procurement frameworks that give local businesses
and local people unfettered access to procurement opportunities
emanating from the public and voluntary sectors. The West Midlands
procurement framework for jobs and skills provides a potential
template.
25 August 2010
| 
