Modelling the Effects of Public Support to Small Firms in the UK - Paradise Gained?



Modelling the Effects of Public Support to Small Firms in the UK - paradise Gained?

INTRODUCTION

Background

The evaluation of the impact of public policies to improve the performance of the
small business sector has provoked a great deal of debate and research activity in
recent years. The debate can be categorised in two broad ways. First, it can be seen
in terms of the actual impact measures and schemes of small business support may
have in terms of enhanced growth performance of SMEs. Second, the search for
appropriate evaluation methodologies which reflect the range of problems associated
with the accurate identification of the true effects of policy support.

The much publicised "Six Steps to Heaven" paper by Storey (1998) provided a
comprehensive overview of the problems associated with evaluation studies in the
realm of the small business sector. Storey argued that the vast majority of
assessments of the impact of policy support fall within the category of monitoring
rather than true evaluation. The intention in this paper is to undertake an evaluation
of Business Links in England adopting a methodology which seeks to avoid the
methodological pitfalls articulated by Storey and in so doing achieve the approach.

Business Links (BL) are England's version of the ‘one stop shop’ approach to
supporting SMEs. The origins of the UK model were outlined in government policy
statements in the late 1980s and finalised in 1992. Each BL was to be a partnership
between TECs, chambers of commerce, local authorities, enterprise agencies and
other bodies such as local universities. The object was not only to co-ordinate
existing SME support services but to create a fully integrated, local strategy for
promoting business and enterprise. In pursuit of this objective the aims of Business
Links are to:

• increase the use of business support by small firms,

• rationalise the provision of support to reduce duplication and to make it more
coherent, and

• improve the quality of support services.

The main initial target of BLs was to be firms employing between 10 and 200 with
growth potential although SMEs in general, including start-ups, would still be helped.
BLs would become, through their close involvement with the TECs, the new main
vehicle for the delivery of DTI funded SME services. A key innovation in BLs was
the ‘personal business advisor’ (PBA) who was capable of providing SMEs with
holistic advice on business problems and signposting to the support services available
to solve them.

By January 1997 a total of 89 Business Link partnerships, with 241 outlets covering
the whole of England, had come into operation. Each Business Link is based on a
partnership between local agencies involved in support for businesses. The
composition of the partnerships varies, but typically the partners include the TEC, a
Chamber of Commerce, Local Authorities and Enterprise Agencies.

Stephen Roper and Mark Hart



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