Robert J. Bennett

SME Growth: The Relationship with Business Advice and External Collaboration

The paper presents multivariate analysis of the relationship of SME growth with the acquisition of external business advice, whilst controlling for the influence of SME characteristics of age, manufacturing/services, high technology, innovator, level of skill of the workforce, exporter and number of competitors. The relationship of external business advice with SME performance is statistically significant for only a small number of sources and fields. Obtaining external advice in fields such as business strategy and staff recruitment is associated with positive firm performance. The main positive relationships of advice and performance are dominated by private sector sources such as lawyers, suppliers, customers and business friends/relatives. Collaborative arrangements with suppliers nationally/internationally have a strong positive relationship with employment and turnover growth; collaboration with local suppliers has a strong positive relationship with growth in profitability. There is little evidence of statistically significant relationships between government-backed providers of business advice such as Business Link and firm performance.

The use of external business advice by SMEs in Britain

This paper reports new survey results on the extent, sourcing and impact of external business advice to SMEs in Britain. The survey, covering 2547 respondents, is the largest and most definitive assessment to date. Its results demonstrate the very wide extent of external advice: used by 95% of respondent SMEs, an increase from 85.8% in a similar survey in 1991. The analysis of the survey assesses sources of advice in terms of the level of trust that exists between the supplier and the SME client. The market appears to be strongly segmented and dominated by high trust specialist sources (accountants, lawyers), customers, suppliers and business friends. Business associations and government-backed sources play an important but lesser role. The recent government initiative of Business Link has, however, established an important market, used by 27% of respondents. Impact assessments confirm the significance of high trust private sector suppliers for the most crucial supplies of advice. Variations in use occur ...

The benefits of external support to SMEs: “Hard” versus “soft” outcomes and satisfaction levels

Purpose – Aims to provide an assessment of the role of external business advice for small to medium‐sized enterprises (SMEs), comparing “soft” outcomes (improved ability to manage, ability to cope), “hard” outcomes (profitability, turnover, reduced costs), and overall satisfaction levels.Design/methodology/approach – A telephone survey using a stratified random sample frame provides a representative sample that allows comparison of the benefits of advice to SMEs in different size categories.Findings – The paper demonstrates a large and varied supply of advice with no evidence of reluctance by owners/managers to seek advice. “Hard” and “soft” outcomes tend to be combined for many SMEs, but the widest effects of external advice seem to be intangible, such as reassurance or reducing uncertainty. There is less variation between SMEs of different size than expected, but strong variation between types of external suppliers of advice. The level of regulation of suppliers and extent of their reputation or brand a...

SME policy support in Britain since the 1990s: what have we learnt?

I examine the evolution of British government support to small and medium-sized enterprises (SMEs), using results from four waves of survey evidence in 1991, 1997, 2002, and 2004, and comparison with other analyses. Whilst government support is often based on overcoming market failures in the availability or use of supports to SMEs, I argue 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. If a market gap existed in the past, it is no longer apparent. Any systemic market failures that remain can influence only the start-up, very early stage growth, and/or the very smallest single-person businesses. I also find that different modes of delivery by centralised, regionalised, or localised structures have very little influence on market penetration. Decentralisation can increase take-up marginally, but this has been achieved only with tenfold increases in costs and major increases in administrative complexity. There is some marginal but significant benefit of policy delivery being in the hands of market, or near-market, agencies. But for all delivery bodies there is massive variability in use, impact, and satisfaction levels achieved. Finally, a brief analysis of gender differences suggests some significant variations in use of advice from different sources, but that government sources have some of the most adverse use levels for female-headed business, and this particularly applies to Business Link. Over the period 1991 – 2004 there is little to indicate the overwhelming success of government SME support policies, particularly at the level of cost that they now involve.

Business associations and their potential contribution to the competitiveness of SMEs

This paper examines the relations between small and medium sized enterprises (SMEs) and business associations. It identifies sectoral, local and national dimensions and reports survey results in Britain that evidence the range of services supplied and demanded. The paper reviews the theoretical understanding of how associations operate and how they can be expected to relate to their SME members. Using this framework the paper then assesses, largely using new survey evidence, the types of associations most relevant to SMEs, their characteristics, and their services. The paper concludes by arguing that SMEs are one of the least well represented groups of business, their interests are often likely to be swamped in association governance either by large businesses or by employee–status individuals. In general there are also limits to development of services through business associations, although there is strong variation between businesses by sector, location and size. The author concludes that contributions...

Local Economic Development Partnerships: An Analysis of Policy Networks in EC-LEDA Local Employment Development Strategies

BENNETT R. J. and KREBS G. (1994) Local economic development partnerships: an analysis of policy networks in EC-LEDA local employment development strategies, Reg. Studies 28, 119–140. This paper assesses the agents and networks involved in local employment development in thirty-three localities from the twelve European Community (EC) countries. The sample is that used in the EC Local Employment Development Action (LEDA) programme. The analysis concentrates on which activities are pursued by which agents, and how the agents work together in partnerships. It demonstrates the importance of government leadership at all levels, and the significance of co-finance and collaboration with other agents, particularly the private sector and Chambers of Commerce. There is a major contrast between less and more developed regions. In Southern Europe central government and agency leadership is generally the most crucial structure of networks. In declining industrial areas in Northern Europe more complex networks usually ...

Intensity of interaction in supply of business advice and client impact: a comparison of consultancy, business associations and government support initiatives for SMEs

This paper assesses the supply of business advice using new empirical evidence from a large scale survey of SMEs. The chief focus of the paper is on a comparison of suppliers that operate in different environments of regulation, contract and reputation. The paper argues that interaction intensity varies with the level of information asymmetry of these different environments, between different types of service supplier and their clients. Interaction intensity between suppliers also varies as a result of the level of trust they enjoy: for example, the low trust enjoyed by consultants appears to encourage higher intensity of interaction which improves the tailoring of the service to the clients needs and enhances impact. The paper assesses interaction intensity using the existence of site visits and/or a written brief/contract as indicators. Although these measures have limitations, the paper demonstrates clear and significant differences between suppliers in terms of interaction intensity, use of contracts and impact in three broad categories: private sector consultancy (low trust, high intensity, high impact), business associations (high trust, low intensity, moderate impact) and government support agencies (moderate trust, moderate to high intensity, moderate or low impact). Multivariate estimation methods demonstrate that significant differences in interaction intensity, use of contracts and impact by client type are much less important than differences in supplier type. This indicates that suppliers generally develop more into niche service fields or groups of services rather than niches related to types of firm.

Enterprise and human resource development : local capacity building

Learning to Meet the Global Challenge PART ONE: CHALLENGE-CAPABILITY-RESPONSE The Global Challenge Economic Capability Britains National and Local Position Britains Institutional Capability Reactions to Economic Challenges The Current Response PART TWO: FIELDS OF ACTIVITY: VERTICAL PROGRAMMES Enterprise Education Training PART THREE: THE LOCAL DIMENSION: HORIZONTAL INTEGRATION Local Networks Dimensions of Local Capability Large Cities and Metropolitan Cores Metropolitan Fringes Dispersed Industrial Areas Central Places and Rural Areas PART FOUR: AN AGENDA FOR THE 1990S Towards a National Strategy

Business Routes of Influence in Brussels: Exploring the Choice of Direct Representation

This paper presents one of the first statistical analyses of the factors that determine the extent to which direct influence strategies are used by companies. New survey evidence and multivariate analysis is used to assess seven hypotheses to explain direct influence strategies. The factor of greatest significance is company size since direct influence is open only to large companies. But the extent to which direct influence is followed by large companies depends on their sector, its extent of organization, the sectors size and ‘weight’, and the form of the business association relevant to the sector. Direct influence is more likely where associations cover large corporate businesses (rather than owner-managers, professionals, federations or mixed associations), in sectors with a high degree of market concentration within large companies, and where their associations are relatively small. These findings are related to the logic of collective action suggesting that in sectors where there is the least chance to opt out of an association, there is a greater chance of a business also directly lobbying in order to assure itself that its interests are not being diluted and so that it can gain direct specific information or influence benefits.

The Contribution of Business Associations to SMEs Strategy, Bundling or Reassurance?

This article assesses the motives for membership of associations by established SMEs with one or more employee. The article concludes that membership motives span a complex ‘bundle’ of services, ranging from individual supports to collective lobbying. Bundling gives advantages of scale and scope to specialist providers, but also combines individual and collective benefits in order to mitigate the effects of free riding. Established SMEs also seem to look on associations, as a whole, as a bundle, belonging to an average of 1.85 associations per firm. There is some size segmentation of the association market, but, in general, size variation appears less important than the target markets which associations cover: the sector (trade and professional bodies), the locality (chambers of commerce), the specificness of the SME (such as FSB, FPB), or the role of the SME owner as director (such as IoD).