Speaking at The Women’s Organisation, Professor Mark Hart said the current gap in Government support to support business growth needed to be addressed as a matter of urgency. Tony McDonough reports
A leading UK expert on enterprise and business growth has told an audience in Liverpool he believes the country’s “dynamic” entrepreneurs will pull us out of our current economic uncertainty.
But, speaking at an event at The Women’s Organisation, Professor Mark Hart said the current gap in Government support to help businesses grow was of great concern and needed to be addressed as a matter of urgency.
The event, Start-Up City: Building an Effective Ecosystem for Entrepreneurs, was organised by Liverpool Business Group in conjunction with the Enterprise Hub, and was attended by a select group of professionals and business leaders.
Prof Hart is deputy director of the Enterprise Research Centre and Professor of Small Business and Entrepreneurship at Aston Business School, and is an advisor to Government and other areas of the public sector on enterprise.
Economic uncertainty
Britain’s economy has faced significant headwinds since the financial crash more than a decade ago and its fragile recovery is facing another obstacle amid uncertainty over the country’s departure from the European Union in March next year.
“Despite the uncertainty at the moment there are a lot of variations in business dynamics and that is down to the entrepreneurs,” said Prof Hart. “And so I have faith in our entrepreneurs to get us out of this difficult period.”
And, addressing the current lack of Government support, he added: “The business support agenda has fallen away. In 2015 and 2016 business growth services were wrapped up.
“In the last three years we have had a situation where Whitehall still struggles to get a coherent business support programme up and running. There is a clear connection between business dynamism and growth and productivity, both at a local and national level.
“Innovation is at the core of driving business dynamism but currently the UK does not have a business start-up programme. Despite this, almost a fifth of all start-ups in the EU are in the UK.”
Enterprise Hub
Liverpool city region’s Enterprise Hub, backed with funds from the EU, has offered advice and support to more than 5,000 people looking to start up their own businesses since its launch in December 2015. The Women’s Organisation is the lead agency on the project.
Mr Hart added that, with the exception of Japan and New Zealand, the UK does lag behind many other countries in having start-up businesses who will grow to employ 10 people or more.
“Our key concern is not the volume of start-ups but the initial survival and scaling up of those businesses,” he explained.
“Around 25% of start-ups have ambitions to grow and create further opportunities and jobs within the economy. Around 75% do not have any ambitions to grow but that is ok because they are still succeeding.”
High-growth hairdressers
Prof Hart says a source of irritation around the debate on high-growth businesses was the focus on particular sectors, such as manufacturing, and how other sectors might not be taken as seriously.
He explained: “Sometimes people will disparage enterprises such as hairdressers but I have come across hairdressing businesses that are high growth and are making a lot of money – it is not about sectors but about the ambitions of the people.”
Mr Hart offered an fascinating insight into the dynamics of high-growth firms. He said even the most successful businesses won’t always maintain their growth – but will experience periods of growth.
He said: “A firm may have a period of high growth – and then stuff happens. A key person might leave and take clients with them and that will cause things to slow down. We have to be realistic about what happens on the ground.
“We are now of the view that there is no such thing as a high-growth firm. Only firms that have high-growth episodes.”
Innovation policy
Prof Hart also spoke about the link between high growth and productivity saying one does not necessarily lead to the other.
He added there was evidence the right innovation policy, both at a regional and a national level, can yield results and said there was a need to promote diversity, enterprise and innovation.
“The UK lags behind many international competitors in terms of both entrepreneurial activity and innovation,” he said. “We need to develop a private and public business support framework based on evidence. And we need to challenge owner-manager mindsets in developing growth ambitions and enhancing leadership skills.
“Just adopting stuff, say for example cloud accounting, is not enough in itself. People have to know what they are going to do with it. We need to develop a growth-oriented mindset.”