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A gem of a report: The Global Entrepreneurship Monitor

It can sometimes be difficult to see impact from entrepreneurship research – not necessarily because of poor quality or lack of relevance but simply because it can take so long to disseminate findings. Publishing in peer-reviewed journals is notoriously difficult and slow – typically 18 to 24 months. So have can high quality evidence-based research be disseminated quickly? Firstly, by publishing in conference proceedings, like the one run by the Institute for Small Business and Entrepreneurship (ISBE www.isbe.org.uk) now in its 32nd year, which can take less than 6 months from abstract submission to appearing proceedings. Secondly, by self-publishing on the internet. But how can the reader be sure the research is high quality if it is not peer-reviewed?

In the end I’m afraid it comes back to ‘brand’. We develop relationships with our brands, built up over time and through establishing trust. So if you are looking for high quality entrepreneurship research why not start with the top global brand – Babson College (http://www3.babson.edu). The Global Entrepreneurship Monitor (GEM) is the largest and longest-standing globally focused entrepreneurship research project.

The recently published GEM 2009 Global Report’s key findings include:
1. Attitudes towards entrepreneurship vary widely across the world. Fear of failure is a significant barrier (in Japan) but some can entrepreneurs have a high status (in Denmark).
2. There is a decline the number of early-stage entrepreneurs and evidence that more existing entrepreneurs are stopping their activities.
3. In terms of creating new jobs only 14% expected to create 20 or more jobs. This might be because of increased employment protection or that successful entrepreneurs consider employment more attractive that developing their own business.
4. The impact of the recession meant that over 50% of entrepreneurs felt it was more difficult to start a new business in 2009 and that more experienced ones tended to be the most pessimistic.
5. Venture capital activity in the US and Europe fell significantly yet increased in China were funds will soon overtake those in Europe.

Now in its 11th year and with over 200 researchers involved, the project sets the standard for others – provided it continues to produce gems!

Dr Nigel Lockett
Director of Centre for Entrepreneurship and Innovation Management (CEIM)
www.bradford.ac.uk/ceim
www.nigellockett.com

New Year’s resolution: Time to get closer to your customers?

There could be good news about the recession. There is growing evidence, both from the respected ACCA global survey (www.accaglobal.com) and recent O2 small business survey (http://bit.ly/6UGCZs), that business confidence is increasing. From the ACCA Q4/09 survey (http://bit.ly/4tyUZH) there is even optimism that Q3/09 was the bottom of the downturn. Although, we may still have a year left before recovery is really underway. O2’s survey shows 27% of small business healthier now than this time last year and 59% are predicting better business performance in 2010. However, economic recovery and low consumer confidence remain key concerns. According to ACCA, last year the two big issues for small firms were falling customer demand and accessing finance (http://bit.ly/5ZoFeB). The government and banks continue to make reassuring noises about the latter but what can they really do about increasing customer demand?

But some small firms have already been reporting growth in sales and profits:

Thunderhead, which helps companies to integrate marketing to their communications with customers through automation, saw sales grow by 28% to £16m and Pre-tax profits by 47% to £2.9m (www.thunderhead.com). For details of the top 50 growing companies see Growing Business Magazine (http://bit.ly/7EtnhL)

Deliver Net, a specialist supplier to the community healthcare sector (www.healthcare.co.uk). Managing director Tim Lockett said, “We have seen our business grow in the last two years but it’s been hard work. We have spent as much time on finding efficiencies and reducing costs as we have on developing new business.” And the key to reducing costs and increasing sales? “E-commerce has been critical to both. We have supported our customers in moving their ordering online by bespoke product templates and budget control systems. In the end, they see the saving to themselves rather than us. We now receive over 70% of our orders online.” He added, “The number of customer service staff is down but warehouse and distribution numbers are up. We still employ the same number of people but process more orders.” And what about the future? “I’m optimistic. There are new customers in the pipeline and we can see new markets opening up. In the last year we have had to get better at what we do. This increased efficiency hasn’t gone unnoticed by our strategic partners. Yes, I’m hoping 2010 will be a good year.”

Vickers Laboratories, which has been manufacturing chemicals for over thirty years (www.viclabs.co.uk). CEO Julian Driver said, “Sales haven’t grown. But more importantly, we’ve been able to maintain profit margins and keep cashflow under control.” How has this been achieved in a recession? “Innovation has been at the heart of what we do. Most of these have been incremental but when you add them all up we have come a long way. We’re almost invisible! We have become embedded in our customers’ supply chains and add value to their service offering, which makes it counterproductive to move from us and if cash is tight we still get paid.” And what about the future? “Our markets are deliberately diverse and we are constantly looking for new business that is difficult!” Why? “Well, we are really a solutions company. Not chemical ones – we solve problems and that draws on our knowledge to health and safety and experience of reagents. And this protects our margins. So I’m quietly confident about 2010, even though I know new business is going to be difficult to find.”

What do they all have in common? In the end, they are all focused on process innovation. They appear to anticipate their customers’ needs. And the key to this? Get close to your customer. Or in the words of Mrs Wilson, the housekeeper (Helen Mirren) in Robert Altmans’ Gosford Park (2001), “What gift do you think a good servant has that separates them from the others? It’s the gift of anticipation. And I’m a good servant. I’m better than good. I’m the best. I’m the perfect servant. I know when they’ll be hungry – and the food is ready. I know when they’ll be tired – and the bed is turned down. I know it before they know it themselves.”

So perhaps 2010 is the year in which to get so close to your customers that you can anticipate their needs before they do – well at least before your competitors do!

Dr Nigel Lockett
Director of Centre for Entrepreneurship and Innovation Management (CEIM)
www.bradford.ac.uk/ceim
www.nigellockett.com

Standing out in the crowd

The Public Relations (PR) industry is all about how organisations communicate their message and differentiate themselves or simply just ‘stand out in the crowd’ (www.cipr.co.uk). But the industry faces many challenges from building the profession to ensuring the workforce is well trained and representative.  The PR industry is not unique in having a profession, which does not fully represent the communities it serves. Now in its second year, the high profile Brunswick Intern Programme seeks to address this imbalance in an innovative way (http://bit.ly/6rHyUn). Brunswick (www.brunswick.com), a leading communications company, and unicornjobs.com (www.unicornjobs.com), which specialises in placing graduates in PR jobs, designed the 10-week training programme for recent black and minority ethnic graduates. The six participants receive formal training, meet leading practitioners and participate in practical PR projects.

So how did this year’s six interns fair? Well, judging from their weekly blog (http://bit.ly/8zFqo7), Charlotte, Claude, Jenard, Junior, Param and Tina have certainly had access at senior level in major media and PR companies. By week 10, they had even been able to escape London for the cities of Leeds and Bradford and brush up against the Yorkshire Dales (www.yorkshiredales.org.uk). The two-day Yorkshire experience was instigated and arranged by Northern Lights PR (www.northernlightspr.com) and even included a trip to the Northern Ballet (www.northernballettheatre.co.uk)!

Having spent the morning with Pace (www.pace.com), the set-top box manufacturer based at Saltaire, the World Heritage Site (www.saltairevillage.info), their afternoon focused on innovation. The interns experienced a three-hour innovation workshop at Bradford University School of Management (www.brad.ac.uk/management) designed to help them recognise and develop their innovative thinking. As leaders of the future Charlotte, Claude, Jenard, Junior, Param and Tina will all have to initiate and manage change. Perhaps they have been given a head start with the Brunswick Intern Programme but their ability to bring about change will be based firstly, on the combination of attributes, background, experience, network and values they each have now and secondly, how they set about enhancing their innovation skills.

Judging from their performance at Bradford, change is on the way! Each has the potential to stand out in the crowd.

Dr Nigel Lockett
Director of Centre for Entrepreneurship and Innovation Management (CEIM)
www.bradford.ac.uk/ceim
www.nigellockett.com

STOP PRESS Final blog from interns

Reflections on the trip to Bradford University School of Management (by Jenard)

“After a great morning session at the Pace headquarters in Saltaire, we were driven to the Bradford University School of Management, where we had a truly inspirational session with Dr Nigel Lockett. He delivered a master class on innovation.

During the class he showed us the different ways he might conduct sessions like this. For example, he used techniques like role-playing to promote interaction between the people in the class and himself as the lecturer.

But more importantly, he gave us an unique insight into “innovative thinking”, demonstrating such thinking wasn’t something that only a special few could take part in. Rather, it was about strategically looking at the world around you, and having the gusto to go ahead and put new ideas into action.

He gave us some great examples of how just one person in a company can recognise an improvement or innovation that can be made, and how that person – even if they fear others disagree – can push ahead, make a change, and initiate growth for both their company and themselves. I definitely took away the idea that I can be a leader too.”

More …

Fertile soil for innovation?

The Food and Environment Research Agency (FERA) (www.fera.defra.gov.uk) is the UK Government’s main research-focused investigating sustainable food chains, healthy natural environments and protecting us from biological and chemical risks. Based near York, it has historically been shrouded in secrecy. However, this is rapidly changing. FERA now has an IP Exploitation Manager and spin-out companies located nearby. For example, Forsite Diagnostics (www.forsitediagnostics.com). The company develop and manufacture on-site test kits and is led by Chris Danks since its launch in 2007. Their ‘Pocket Diagnostic’ is the market leader for on-site plant disease testing used by growers, advisors and plant health inspectors. They certainly bring testing for potato blight right into the 21st century (http://bit.ly/7JlX0K)! But I wonder what Pippa Greenwood would say?

FERA and Forsite Diagnostics form part of a more general regional innovation strategy for Yorkshire Forward – the Bioscience Cluster (www.yorkshire-forward.com). It links universities, government departments and industry (there are over 50 companies and 3,700 life scientists work within 8 miles of York). This strategy is also supported by Science City York (www.sciencecityyork.org.uk)

But commercialising bioscience innovation is going to take more than locating firms near to FERA. Getting scientists, academics, venture capitalists and entrepreneurs to collaborate is going to be the key to getting innovations to germinate. Recognising that innovation it is fundamentally about people and that it can be managed could be two of the first seeds to sow!

Dr Nigel Lockett
Director of Centre for Entrepreneurship and Innovation Management (CEIM)
www.bradford.ac.uk/ceim
www.nigellockett.com

Is there something a food[t] or have I just got a BEE in my bonnet?

When we think of successful food retailing companies, most of us think of Tesco, the now huge global company. A few might reflect on Morrison’s achievement in absorbing the Safeway chain, acquired in 2003 (http://bit.ly/5tiq49) and after a hard struggle emerging as a survivor (http://bit.ly/4JNzGD).

But how many of us think of the Co-operative? They have just reported a 17% rise in first-half profit – largely due to an increase in food sales and this only a year after buying Somerfield in 2008 to become Britain’s 5th biggest chain of grocery stores. So what are they doing right?

According to their CEO, Peter Marks, it’s down to taking customers away from its competitors. “We’ve improved our product range, spent a lot of money modernising our stores and all of that together has meant that we’re getting new customers” (http://bit.ly/7JRBdb). But is that really innovative enough to beat off competition from the likes of Tesco?

Founded in Rochdale, Northwest England, in 1844 the group now has 5,300 retail outlets and about 4.5 million members (www.co-operative.coop). However, it’s more that a food store, is democratically run by members and arguably leads the way in ethics and sustainability (www.co-operative.coop/aboutus). Now that could be innovative enough to take on the competition!

Perhaps I’ll BEEcome a member and get one of those pretty honeycomb cards (www.co-operativemembership.coop)

Dr Nigel Lockett
Director of Centre for Entrepreneurship and Innovation Management (CEIM)
www.bradford.ac.uk/ceim
www.nigellockett.com

Best place to be a small business?

Perhaps the US isn’t the best place to be a small business after all. According to research by the Center for Economic and Policy Research (http://bit.ly/4DES0T). The US has long seen itself as the home of entrepreneurship – ignoring GW Bush’s gaff ‘The thing that’s wrong with the French is that they don’t have a word for entrepreneur’ – with low tax, low regulation and more flexible labour market. But how does the US compare with other nations? Self-employment and small businesses is one way to measure entrepreneurship. The US has 7.2% self-employment compared with 13.8% in the UK and a staggering 26.4% in Italy. Does this really mean that Italy is more entrepreneurial that the US?

What is clear to policymakers in Europe is the need to promote entrepreneurial behaviour as a means of economic growth but also as a means of achieving sustainable enterprise – ‘Inspiring young entrepreneurs to build a better tomorrow’ (http://bit.ly/4ofCfb).

Do business angels have wings?

The Association of Chartered Certified Accountants (ACCA) (http://www.accaglobal.com) seems to think so. In fact,  Robin Jarvis, Head of SME affairs at ACCA, said ‘For years individual equity investors have been out of the limelight, first hit by the dotcom bust, then crowded out by easy credit and now discouraged by the economic climate’ in the Financial Times on 14th September 2009.  (http://bit.ly/8UCnyr)

The ACCA have proposals for helping entrepreneurs to create realistic valuations of their businesses, greater support for business angel networks and improvements to tax incentives, notably the Enterprise Investment Scheme.

Maybe it’s entrepreneurs that need wings to get their new ventures off the ground. Although, Geoff Britton, director of GBAC Accountancy & Business Service (http://www.gbac.co.uk), warns ‘Create an environment where businesses prosper’ but ‘don’t over-assist’.

But where do you find a business angel (with or without wings)? You could start with the British Business Angels Association (BBAA) (http://www.bbaa.org.uk) or if you are looking for something between business angels and venture capitalist, at British Private Equity and Venture Capital Association  (BVCA) (http://www.bvca.co.uk), you could try MMC Ventures (http://www.mmcventures.co.uk)

Time to belt up and get ready for take off!

One lump or two?

So Sir Alan has been offered a role as an adviser to small businesses or ‘Enterprise Tsar’ for short (http://bit.ly/7W3MG6).  The Conservatives think Sir Alan must choose between working for the government and working for the BBC’s The Apprentice. (http://bit.ly/7KsHzn). Are they right?

But what is in the interests of the 4.7 million small to medium-sized enterprises (SMEs) in the UK?

What we do know is that politicians tend to go to university then into parliament perhaps having had a job in the public sector. But with less than 10% having more than 10 years of business experience, and most of this will be with corporations, do that need a like sugar to sweeten politics?

Whether we like Sir Alan or not he does know a like bit more about business than your average MP so why not forgot the politics and get real. A caring nation needs to generate wealth from a successful economy is driven innovation fuelled by entrepreneurship.

I don’t normally take sugar but perhaps today I’ll have a lump or two!