6. Introducing Micro-business Britain
Project Aims and overview
• Addresses knowledge gaps for
micro-businesses around
innovation, digital adoption and
ambition
• Aim to better understand the
pathways to productivity in micro-
businesses
• Survey of 6,500 micro-businesses in
the UK, smaller comparison
samples in the US (2,000) and
Ireland (1,500)
Key themes
• Personal and business
ambition
• Innovation inputs and
outcomes
• Digital adoption and
diffusion
• Resilience
• Business and family
• Growth and linkages
In 2017 there were 1.11m micro-businesses (with 1-9 employees) in the UK,
employing around 4.09m people (17.6 per cent of the workforce). This group of
firms accounted for £552bn in sales, 14.7 per cent of that by all UK firms.
15. Pathways to productivity
• Initial modelling highlights the role of digital adoption in productivity upgrading
• How does adoption in 2015 (or before) influence to sales per employee in 2018?
• Key results are:
– Cloud-based computing adds 13.5 %
– CRM use adds 18.4 %
– E-commerce adds 7.5 %
– Web-based accounting software adds 11.8%
– Computer aided design leads to a 7.1% increase
• Provides strong support for the importance of digital diffusion and related
initiatives
• Being a home-based business, having a larger leadership team, being an exporter
and being an organisational innovator are also positively associated with higher
sales per employee
26. Challenges
Old-fashioned manufacture process
No flow through the factory
Too much paper
Rekeying data
Struggle to log non-conformities linked to ISO
Inefficient manufacture process with wasted time.
27.
28. Process
Oxford Innovation consultants specialising in production
and efficiency
Team engagement and involvement
Complete step-by-step breakdown of manufacture
process backwards from dispatch
Floor plan and flow chart
Highlighted value stages and non-value stages.
29. Findings
Order travels 2 miles from start to finish
26 discrete documents
11 scan points per order
25 value stages (value to the customer)
82 non-value stages
Identified possible “just do its” which are the simple,
obvious and cost effective stages.
30.
31. Changes
Removed the individual daily capture sheets, time saved
= 2 hours per month
Removed the sew book (pad on table), time saved = 1
hour per month
Removed the 2nd cutter inspection, time saved on
average = 2 minutes per suit
Over a month this is a saving of 1 working day.
32. Removed the zig-zag station
Free up the Quality Assurance inspection time which
takes on average 4 minutes per suit
Over the month this saves 13hrs & 20seconds. The
movement saved is 550mts per day, which is 11km per
month on average
Time saved 2hrs per month.
33. Results
Overall time saved per month per suit is 26hrs & 20
minutes
Remember 1 minute per suit = 74 hours per year
Estimated 50% increase in capacity on the shop floor with
these changes and the implementation of a flatbed cutting
table.
34.
35. Next steps
ERP system to
remove paper and
rekeying within the
system
Continued focus on
capacity and
productivity
Drive to increase
sales to fill capacity.
42. Dashboard – Focus on the Geography of
Growing Firms
• Need to understand the various types of firms that are growing and
where they are concentrated
• Greater granularity in growth metrics better informs the development
of local and regional, and indeed, national economic policy
• Focus on a range of metrics across the growth pipeline – start-up,
survival and growth – of whatever scale.
43. Firm Survival and Growth
Start-ups achieving
at least £1m T/O
after 3 years
Established
businesses growing
from £1-2m to
£3m+ T/O
44. A tale of two HGF Definitions!
OECD HGFs –
20% p.a
threshold
(Employment)
OECD HGFs –
10% p.a
threshold
(Employment)
45. Productivity Growth (2014-17)
• Our research shows that there was a very poor correlation
between jobs growth, increases in revenues and productivity
gains.
• Only 8.4% of all firms in the UK achieved positive productivity
gains (revenue per employee) while still increasing jobs over
the period 2014-17.
• Perhaps surprisingly, Northern Ireland had the highest
proportion in the UK at 11% - a ‘catching up’ process?
• Proportion in Wales and Scotland was 7.4% for both home
nations which was below the average of 8.5% for England.
• West of England, the North (Leeds City Region and Greater
Manchester) and London having the highest proportions of
firms with productivity growth
46. Discussion
• Encourage the use of a range of firm growth metrics at local level to
design and monitor business support policy.
• Brexit implications?
– metrics provide a pre-Brexit referendum baseline given the lags in the data.
– some regions exhibit a weak ‘growth’ dynamics on a range of firm-level metrics.
– with the predicted official impact on the regions now in the public domain there
is a ‘perfect storm’ brewing for some regions given their lack of ‘dynamism’.
47. More information at http://enterpriseresearch.ac.uk/
Contact us about this research: Mark Hart mark.hart@aston.ac.uk
This work reflects the joint effort by the research team of the ERC, including,
Karen Bonner, Neha Prashar, Mark Hart and Michael Anyadike-Danes
This work contains statistical data from ONS which is Crown Copyright. The use of these data does not imply the
endorsement of the data owner or the UK Data Service at the UK Data Archive in relation to the interpretation or
analysis of the data. This work uses research datasets which may not exactly reproduce National Statistics aggregates.
50. A new way of doing business support
at the local level
Andy Lee – Strategic Lead for Diversity in Business, NatWest
Business Banking
Information classification: Public
51. Building an inclusive ecosystem
Information classification: Public 51
Pilot project bringing together civil society, Academia, Private and Public Sector to
explore a new support systemCollaboration
Collaborating with the entrepreneurs to design their support programme, focused
on training and leadershipTailored Support
Inclusion has to be a core principle in mainstream business support provisionEmbedding Inclusion
Anchor organisation supported the rebuilding of trustBuilding Trust
55. Embedding Inclusion
Information classification: Public 55
Firms engaged over 18 months
Entrepreneurs signed up to business
support workshops
Firms had no previous experience
of mainstream business support
57. Information classification: Public 57
Tweet your organisations
commitment to inclusive business
support #smallbizbritain2018
Follow our inclusive journey
@CREMEatBham
@CitizensUKBham
@AndyJRLee
58. Mark Hart , ERC
Irene Graham, ScaleUp Institute
Ben Still, West Yorkshire Combined Authority
Andy Lee, NatWest
Tsitsi Mudokwani, Sisters Care Services Ltd
64. Our mission
Be the Business is the
movement to drive up
UKproductivity through
inspiring and helping
everyfirmin the country
to improve their own
performance, and the
performance of those
they workwith.
65. Be the Business was founded on two fundamental insights
about productivity
65
Distribution of businesses relative to the expected
productivity for a firm of their size in their sub-sector
Link between management practices and productivity
Median productivity in each group of firms
Good management practices are one of the
biggest drivers of productivity
The gap between ‘the best’ firms in the UK and
‘the rest’ is significant
66. We start with a focus
on the hump of
underperformingfirms
Distribution of businesses relative to the expected productivity
for a firmof their size in their sub-sector
“This empirical evidence suggests a
long tail of countries and companies
with low,slowproductivitygrowth.
These productivity laggards have
been unable to keep-up,much less
catch-up, with frontier countries
and companies.
Bank Chief Economist,
Andy Haldane, March 2017
“We will launch a Call for Evidence
to understand how bestwe can help
the UK’s least productive businesses
to learn from,and catch-up with,the
most productive.”
Chancellor Phillip Hammond,
13 March 2018, Spring
Statement
67. Atailored offer
forSMEs
Propagated and
multiplied by larger firms
We’re focusing on the 240,000 SMEs
with between 10 –249 employees,where
we know improvements to management
practices can have significant bite.
(There are 7,000 businesses in the UK
with more than 250 employees).
Examples
72. Online advice and
benchmarking
- Improvement advice in
accessible language
- Dashboard of business
practices
In-person communities
-Cornwall
-North West
-Supply chain
Management and
Leadership
-Lancaster
-Bath
-Glasgow
Mentoring
-Birmingham
-Manchester
We’re developing four core areas of focus, applied in regions across
the country, to iterate what we’re doing and learn quickly
73. Hospitality firms in Cornwall
- Met with key business leaders and identified
partners
- We have engaged and inspired business
leaders
- Almost 100 businesses registered their
interest in the pilot
- We’ve held our first workshops in person
and launched our online community
We are building communities to develop practices that can scale
Family businesses in the North
West
Graham Ramsbottom
Grosvenor/Wheatsheaf
group
Martin
Rayner
Lakeland
Robert
Hough
Peel
Gill Hall
Butler’s
Cheeses
Jacqueline
Jackson
Thomas Jardine
Richard
Topliss
RBS
75. Chris Waterfield
Mentor: Arunima Dhar
Organisation: Waterfield
Bakery Sector: Mfg food
Area of improvement: Build
credibility as a leader to take over the
business from his father, adopt lean
techniques in the plant and guide the
company during times of financial
challenge.
Liz Smith
Mentor: David Low
Organisation: LG
Davis Sector: Mfg
Area of improvement: Step above the day to
day firefighting mode and focus on the futureof
the organization that is owned by her uncle. Liz
wants to understand business processes like
risk management, performance management
etc from David who has worked in GSK all his
life.
Pilots underway
in Greater
Manchester and
Midlands
A mentoring pilot that is ready to scale up
77. Scaling
interventions
that work Visit Cornwall +
Visit England
PtP scale-up
(672)
Family run-
business
networks
Mentoring scale-up:
1274 firms
Digital platform at
scale
79. We will be the
enemy of
complacency,
unmoved by the
latest quarterly
statistics
80. After a decade of flatlining
productivity performance, we believe
the UK now needs a decade of
productivity outperformance to be
competitive in a post-Brexit world.
81.
82.
83. Panel discussion:
SMEs, productivity and Brexit –
challenges and opportunities
Adam Marshall, British Chambers of Commerce
Sonali Parekh, Federation of Small Business
Matthew Fell, Confederation of British Industry
Phillip McCann, University of Sheffield
85. ’Core’ projects to end 2018
• Investing for the future? Investigating the determinants and barriers of
investment in smaller firms
• Leadership and management practices and the take-up of innovation -
How do boundary spanning practices and work organisation influence
adoption?
• Innovation and productivity in SMEs – which types of innovation and
which combinations of publicly/privately funded innovation drive SME
productivity? IP issues come in here.
• Understanding local productivity disparities – What explains productivity
distributions between local areas?
• Best practice/digital adoption across supply chains – to what extent are
supply chains spreading best management practice or digital adoption to
smaller suppliers?
86. SOTA Reviews
Curating the evidence base
Pre-publication
• How can we attract and retain more internationally-mobile R&D? Nigel Driffield
• Discouraged Borrowers: Measurement, Determinants and Impact, Ross Brown
• Regional Differences Accessing Finance in UK SMEs: Do They Exist and Do They
Matter? Ross Brown
• Identifying ways to tackle barriers faced by women-led firms in accessing Venture
Capital through new behavioural research Aloña Martiarena
• Innovation and Quality Management – What are the links? Stephen Roper
• How can we improve R&D collaboration across the supply chain? Andrew Thomas
• What supports the adoption of innovations within established (non-frontier)
firms? Rosa Caiazza
In preparation
• Formal IP protection and innovation. What is the evidence? Suma Athrye
• What is the relationship between innovation support and productivity.? What
works? Abdullah Gok
• Diversity and R&D team performance Marian Garcia
• How can clusters be initiated, supported and sustained Chris Van Egeret
87. ‘Commissioned’ projects (selected)
• Micro-business Britain – analysis and benchmarking using the US
and Irish data
• Productivity in metal forming and foundries – IS funded fellowship
project working closely with two industry associations
• Assessing the impact of Creative Industries – Coventry will be City
of Culture in 2021. How will this impact local economic and health
outcomes?
• Supporting growth and productivity in Northern Ireland – series of
projects for Dept for Economy, NI
• Building better business resilience – helping develop stronger
business resilience among disadvantaged communities
88. Building better business resilience
• Funded by the JP Morgan Foundation this two-year project asks:
How can we help new firms develop resilient strategies, thereby
promoting survival and growth?
• Focussing on entrepreneurs from disadvantaged backgrounds this is
a five-country study lead by ERC with Spain, Italy, France and
Germany.
• The literature review phase is now completed. Survey work and
related case studies and focus groups will take place in the UK this
autumn and in our partner countries in early 2019.
• The outputs from the project will include practical policy guidance
as well as toolkits for SMEs and business support practitioners
89. Engagement, influence, impact
• We continue to maintain high levels of ‘soft engagement’ – providing
advice and input to Funders and non-Funders including LEPs, FSB, and
HMRC
• One element of this has been ‘Teach-ins’ with BEIS, FSB and IPO (coming
up) on the latest thinking on SMEs and innovation
• We have also convened/planned workshops and events with BEIS (on the
2.4% R&D target), IPO on innovation and IP (forthcoming) etc.
• Always happy to talk and see how we can help you …