Guest editorial

Environment and Planning C: Government and Policy 2008, volume 26, pages 287 ^ 291

doi:10.1068/c2602ed

Guest editorial

Small business policy and support This collection of papers is the fourth in a series on small business policy drawn from the annual Institute for Small Business and Entrepreneurship (ISBE) conference. In this case, the 29th annual conference was held in Cardiff and was hosted by the Welsh Enterprise Institute based at the University of Glamorgan. The conference returned to the capital city of Wales for the first time since 1988 and I was delighted to act as Chair for an event that brought together academics, practitioners, and policy makers in the field of enterprise and small business. The event attracted some 600 delegates from around the world, making it the largest event of its type. There were over 120 delegates from outside the UK, covering over 25 nations, and the conference themes built upon the renewed emphasis, nationally and internationally, on entrepreneurship in small, medium, and large organisations. The diversity within this field and the continuing emergence of new areas continue to present exciting challenges to policy makers, practitioners, educators, and researchers. My role as guest editor for this theme issue is to collate and summarise some of the papers on policy that were among the most insightful and rewarding presented at the conference. Quality control is always an issue for an event on the scale of the ISBE conference, and the papers I describe below bear testament to the hard work and dedication not only of the individual authors but also of the track leaders and advisers who organised such a hard-hitting and thought-provoking programme. An overarching theme for this issue is the broad area of business support. This is both timely and needed, set as it is against a backdrop of rationalisation and streamlining of all areas of publicly funded business support. The government-led Business Support Simplification Programme in England is currently working with businesses and the government to streamline the existing number of publicly funded business support schemes. This initiative aims to reduce duplication and to make it simpler to access support, so that businesses can find the support they need more easily. Business Link (BL) will be the primary service for individuals and organisations wanting to access business support. This is mirrored, for example, in Wales, where the assembly government's Business Eye service will fulfil a similar mission. One of the most contentious issues that arises from such reviews is the extent to which particular sections or communities within society will be served by such changes. Indeed, it has often been argued that certain groups rarely access current support, even though it is plentiful. The initial paper by Robson et al (2008) examines support for women, and the extent to which it is used by a large sample of business owners from Scotland. Before recent changesöincluding renaming as the `Enterprise Directorate' of the Department for Business, Enterprise and Regulatory reformöthe then Department of Trade and Industry's Small Business Service put considerable effort into developing an overarching strategy for the provision of business advice based upon the premise that there is limited access to informal and formal business networks, mentors, and business support for women. It considered that female entrepreneurs are different to their male counterparts and therefore that they required different sorts of advice and mechanisms for accessing it. The resulting `Strategic Framework for Women's Enterprise' was widely publicised and heralded as a major step in closing the gap in support. Robson et al's work, however, shows that there is little evidence to support the view that agencies need to shape business support to reflect the gender of the business user.

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The study uses a sample of 650 small service-sector firms in Scotland and reports the findings of a detailed postal questionnaire concerned with exploring usage and satisfaction of a range of formal and informal sources of business advice amongst male and female business owners. The paper's findings show that within the service sector there is very little evidence in support of the main hypotheses: that the use of external advice or the impact of adviceöeither formal or informalöis influenced by gender. Instead, it appears to be the size of the business, the reach of markets, and the sector of the economy in which a business operates that drive the extent to which external formal or informal advice is sought. This clearly has policy implications for the provision of business advice and how it is actually delivered. The authors use bivariate analysis and show that amongst formal sources women are more likely to use friends and relatives, the Small Business Gateway, and chambers of commerce but are less likely to use suppliers and consultants. Fascinatingly, the paper also contradicts previous work which has argued that networking should actually be greater among female entrepreneurs (Rosa and Hamilton, 1994) and that women have a greater need for ongoing support (Carter, 2000). The degree to which structural dimensions affect female entrepreneurs depends upon the experience and context. The authors find a preference amongst their sample of women for using contacts that are drawn from familiar social networks. Given the huge range of support initiatives that are available, it seems natural to ask whether or not firms actually benefit from interacting with such support. The pure economic view, of course, is that business support is there to address market failure, but so much support is funded on the basis of short-lived initiatives that the evaluation of `impact' is often based on measures that have little to do with firm performance. In our second paper, Mole et al (2008) start to address the degree to which firms actually benefit from business support, by taking an in-depth look at the case of BL in England. They consider two important questions. Firstly, what types of companies receive advisory support from BLs and, secondly, what types of firms benefit most from that support? The analysis is based on a telephone survey of 2000 firms, around half of which received intensive assistance from BL between April and October 2003. The paper again uses binary regression analysis to show that the probability of receiving assistance appears to be greater among younger firms, those with larger numbers of directors, and those with more gender diversity among the firm's leadership team. In terms of those firms that were receiving intensive BL assistance, the probability of receiving assistance is greater among younger businesses which had limited liability status rather than being partnerships or sole traders. In addition, action by BL to recruit contacts also seems to have substantially increased the probability of potential client firms using BL services. The characteristics of firms' management teams also impacted on the probability of receiving BL intensive assistance, which varied positively with both the number of directors in the firm and the extent of gender diversity among the firm's leadership team. Also interesting, however, are those factors which proved unimportant in shaping the probability of receiving BL intensive assistance: firm size, whether or not the firm was part of a larger group, and the ethnic diversity of the firm's leadership team. This latter result, in particular, is important, suggesting as it does no evidence of any significant differential in the use of BL services in terms of firm's ethnic-minority status. Business growth modelling within the paper suggests that BL intensive assistance only has a positive effect on both sales and employment growth in 2003, although only the effect on employment growth was statistically significant. The employment growth effects tended to be larger where firms' profiles suggest that they may have a management and organisational structure which is more conducive to absorbing and making use of external advice. More specifically,

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employment growth effects proved to be strongest among larger firms with limited liability, among those which are part of multiplant groups, and among those which are exporting. The characteristics of the firm's leadership team also prove important with BL intensive assistance, having larger employment growth effects where the firm has a formal business plan, where there are nonexecutive directors, and where the owner is a serial entrepreneur. Employment growth effects differ little, however, depending on either the ethnic or the gender diversity of the leadership team. Interestingly, the paper suggests that some targeting can have negative opportunity costs. BL could target assistance on those firms that have a greater ability to absorb the advice: in particular, larger, multiplant, and exporting firms that demonstrated greater impacts. Secondly, BL might focus its offers on those contexts where the impact is likely to be greatest, such as the introduction of new products and entry to new markets. Continuing the theme of female entrepreneurship, in the third paper of this theme issue Marlow et al (2008) start to throw some light on the difficult dilemma facing policy makers who insist on using the US as an exemplar in terms of UK policy direction. They argue that successive UK governments have introduced a range of policy initiatives designed to encourage more women to start new firms. Underpinning these policies has been an explicit ambition for the UK to achieve similar participation rates as those in the US where it is widely reported that women own nearly half of the stock of businesses. Their paper critically evaluates the data underlying these objectives, arguing eventually that the definitions and measures of female enterprise used in the UK and the US restrict meaningful comparisons between the two. The paper also tries to argue that the expansion of female entrepreneurship in the US is historically and culturally specific to that country. Defining and measuring women's enterprise has been consistently problematic for researchers and policy makers alike. Compounding this challenge are deeply rooted institutional and legal frameworks which, in the UK, have served to marginalise and make invisible women's contribution to entrepreneurship and to prevent accurate recording of the contribution that women make to enterprise. The current US climate of support and advocacy for female enterprise emerged from a specific and unique set of historical and economic circumstances. Analysis suggests that, in addition to differing historical circumstances, differences in welfare regimes have implications for female participation in business ownership. In the US the liberal market-based approach to welfare provision has significant implications both for the most disadvantaged members of society and for levels of female entrepreneurship. Considered alongside figures which demonstrate that, while the UK female self-employment rate has increased over time, the female share of self-employment has remained constant at around 26% for more than fifteen years, and this suggests that reasons accounting for the fragile nature of self-employed women in the UK should be investigated and used to inform policy in this area. To conclude, the analyses presented suggest that UK policy should be cautious of identifying the US as the benchmark for female participation in business ownership. UK policy should recognise the markedly different socioeconomic history of the UK and the implications that a less extreme approach to the liberal provision of welfare support has for women's business ownership. While drawing from good practice examples from other countries, including but not restricted to the US, policy in this area should reflect the UK's national context and socioeconomic trends. In particular, shifting concentration from initiatives designed to boost female participation in business ownership to those concerned with improving the sustainability of womenowned firms is likely to generate greater economic and social benefits whilst avoiding

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problematic displacement effects. This approach requires a longer term view, sensitive to the manner in which self-employment reflects employment structures and opportunities. Hence, the greater penetration of women into higher order employment will be followed by changes in self-employment. This trend has already been identified in professions such as accountancy, although vertical segregation still persists (Marlow and Carter, 2004). In essence, the message to policy makers is to focus on supporting quality and sustainability. Encouraging more women to enter self-employment without considering the implications of displacement and crowding in poorer performing segments of the service sector is likely to contribute to even higher rates of closure and exit than those already evident amongst women business owners. This will not achieve the much vaunted contribution to the British economy, nor will it offer women bright entrepreneurial futures. Moving to our fourth paper, Ram and Jones (2008) provide a much needed injection of realism into the growing research area around ethnic-minority entrepreneurship. In recent years this has become a fruitful area for analysis and publication, but here the authors take a step back and attempt to place current developments into a more rigorous theoretical perspective. The idea behind the paper is to assess the key academic and policy developments in the UK and to present suggestions for a future research agenda. Initially, the paper outlines the `conceptual base' that underpins policy initiatives towards ethnic-minority entrepreneurship. The authors argue that an `ethnic resources' model has held undue influence upon policy and academic discourses in the field, with a move towards what is termed cultural determinism. This then neglects the context that actually shapes ethnic-minority entrepreneurship. They argue that a `mixed embeddedness' perspective, which recognises the economic and social context of ethnic-minority businesses (EMBs), might be a better way to capture these nuances. The second objective is to assess the extent to which policy initiatives have kept pace with developments in the evidence base. Finally, they lay out an agenda for future research. Despite highlighting some excellent work, the authors argue that the overall balance of research has been undermined by ``an overenthusiasm for panacea-style interpretations'' (page 364). Instead, they give some proposed future directions for research that emphasises the importance of context, emerging issues yet to be addressed in existing studies, and the promotion of a `policy learning' culture. The available research on the economic contribution of EMBs continues to be hampered by a lack of reliable information. This gives scope for developing more robust approaches to data gathering on the economic role of EMBs, where the US could be instructive as a model to copy. Ram and Jones also argue that future research could also be directed at investigating ``the substantive meaning and practical implications of ethnic entrepreneurship'' (Zhou, 2004, page 15). In terms of the link between gender and ethnicity, it has long been recognised that women often play a pivotal role in family-owned firms and that their contribution to the enterprise is often unacknowledged. However, this recognition has not generated many, or indeed any, large-scale systematic studies of EMBs that are owned and run by women. The authors argue that the need for such information is pressing in the light of current government interest in boosting entrepreneurship amongst women. Finally, the area of new communities is mooted as an important area for future research. There is, for example, little research on the constraints faced by new arrivals/refugees moving into self-employment, their perception of support provided, and the potential contribution they make to disadvantaged areas. The final paper in the issue by Bennett (2008) wraps up the story of business support in the UK. It makes a detailed examination of the emergence and shaping of British government support for SMEs, and seeks to do this using the results of

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the large-scale surveys of established SMEs (of 1 ^ 500 employees) by the Centre for Business Research and its predecessor, the Small Business Research Centre, at Cambridge University for the cross-sections of 1991, 1997, 2002, and 2004. In returning to our theme of attempting to justify support in a pure economic sense, the paper argues that successful government intervention is difficult to make effective at realistic cost ^ benefit ratios. The analysis demonstrates little evidence of market failure in provision or take-up of business support. Indeed, if a market gap existed in the past, Bennett argues that it is no longer apparent. He goes on to contend that any systemic market failures that remain can influence only the start-up, very early stage growth, and/or the very smallest single-person businesses. The paper also discovers that the way in which support is actually delivered, whether by centralised, regionalised, or localised structures, has little or no influence on the degree of market penetration. Decentralisation seems to increase take-up, but only marginally, and this is achieved only with substantial increases in both costs and the construction of layers of expensive bureaucracy. The author does find some marginal but significant benefit of policy delivery in the hands of market, or near-market, agencies. However, for all the delivery bodies examined and discussed in this paper, there is huge variation in use, impact, and satisfaction levels achieved. In line with the earlier papers in this issue, a brief analysis of gender differences suggests some significant variations in use of advice from different sources. However, government sources have some of the most adverse use levels for female-led firms. The final conclusion is that over the period 1991 ^ 2004 there is little to indicate the overwhelming success of government SME support policies, particularly at the very high level of cost. Overall, the papers presented here demonstrate that policy research remains a strong and vibrant theme within the ISBE conference. The analyses are both informative and thought provoking. They provide evidence not only of academic rigour, but also of the relevance of the work in terms of how policy can and should be challenged and shaped for the future. David Brooksbank University of Wales Institute, Cardiff References Bennett R J, 2008, ``SME policy support in Britain since the 1990s: what have we learnt?'' Environment and Planning C: Government and Policy 26 375 ^ 397 Carter S, 2000, ``Improving the numbers and performance of women-owned businesses: some implications for training and advisory services'' Education and Training 42 326 ^ 333 Marlow S, Carter S, 2004, ``Accounting for change: professional status, gender disadvantage and self-employment'' Women in Management Review 19 15 ^ 16 Marlow S, Carter S, Shaw E, 2008, ``Constructing female entrepreneurship policy in the UK: is the US a relevant benchmark?'' Environment and Planning C: Government and Policy 26 335 ^ 351 Mole K, Hart M, Roper S, Saal D, 2008,``Differential gains from Business Link support and advice: a treatment effects approach'' Environment and Planning C: Government and Policy 26 315 ^ 334 Ram M, Jones T, 2008, ``Ethnic-minority business in the UK: a review of research and policy developments'' Environment and Planning C: Government and Policy 26 352 ^ 374 Robson P J A, Jack S L, Freel M S, 2008,``Gender and the use of business advice: evidence from firms in the Scottish service sector'' Environment and Planning C: Government and Policy 26 292 ^ 314 Rosa P, Hamilton D, 1994, ``Gender and ownership in UK small firms'' Entrepreneurship: Theory and Practice 18 11 ^ 25 Zhou M, 2004, ``Revisiting ethnic entrepreneurship: convergences, controversies, and conceptual advancements'' International Migration Review 38 1040 ^ 1074

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