ERC Conference Opening . Stephen Roper and Mark Hart

Presentation to the ERC State of Small Business Britain Conference 2024 opening by Stephen Roper and Mark Hart

1. Stephen Roper and Mark Hart Business Support Conundrums Other Funders

2. Rising levels of start-ups and early-stage entrepreneurial activity but…………….. Great environment to start a business but few scale – 2% get to £1m T/O within 3 years Marginal activity of many of the self-employed and small-scale start-ups – especially for women Inclusivity remains elusive despite some improvements

3. Business dynamism in decline for over a decade – how can we reverse this? Business dynamism important for productivity growth –i.e., creates high level of productive churn Key reason is lack of growth in established firms – proportion growing declined significantly in last decade Scaling remains the major policy challenge in the UK as it has done for decades – how do we break the trend? Access to finance a loaded deck for women-led businesses?

4. Productivity a key policy focus yet.….enduring challenges Remains a large productivity and innovation gap between frontier and non-frontier firms There is a lack of overall investment, especially in the adoption of new digital technologies. Translation of investment into innovation and productivity improvement is also an issue (?). Investment issues are exacerbated by skills shortages, which are highly concentrated spatially There remain open questions over how we can shift the dial on investment, innovation, productivity ….

5. Support for innovation is intensive yet……..remains a problem Public sector innovation support delivers positive outcomes – UKRI-engaged firms grow faster But despite growing R&D tax credit spending, we see persistent declines in innovation rates (particularly product innovation) and SMEs moving out of innovating Why is this? How can we better measure and support and de-risk SME innovation? Partnerships? Peer learning? Pilots?

6. Extensive suite of business support – yet not cutting through Lots of evidence on what works and in what settings (public and private) but the needle not moving on overall growth and productivity at firm level. Why not? Poor design and implementation of programmes Too small scale Short-termism – no stability in delivery (organisations and personnel) Awareness of quality support