Small Business Service

 

 

RESEARCH STRATEGY

 

2001 – 2003

 

 

 

 

 

 

 

 

 

Research and Evaluation Unit,

Small Business Service,

St Mary’s House,

C/o Moorfoot,

Sheffield S1 4PQ.

April 2001

Email: tom.cooney@sbs.gsi.gov.uk

Tel: 0114 – 259 7739

 

 

Summary

  1. This paper forms the research strategy of the Small Business Service (SBS) for the next three years. It describes the philosophy and aims of the Research and Evaluation Unit. It additionally lists the initial steps that will be taken to improve the quality, relevance and impact of small business and entrepreneurship research in the UK. Finally, the paper sets out how the strategy will be reviewed and its success evaluated over the planned timeframe.

    2. Philosophy

  2. The philosophy of the Research and Evaluation Unit is sharing through communication. Essentially, the Unit is a gatherer and disseminator of information, and to maximise its critical role, the Unit will heavily promote itself across all stakeholders. This will support its ambition to be seen and appreciated by external personnel as the principal source of research and information on small businesses and entrepreneurship in the UK. Research is not simply an activity that is project based and lengthy in process. It is an integrative course of action that acts in real time, that is inclusive of the needs of others, and that encourages people outside of the Unit to proactively approach team members for assistance. The work of the Unit is the foundation from which the need, value, and outcomes of SBS policies can be appraised. The approach of the Unit is one of partnership and this can be achieved most effectively by informing those outside of the Unit as to the work that is done, the information that is held, and the potential for collaboration that exists.

Purpose

3. The purpose of the Research and Evaluation Unit is to "generate, gather, co-ordinate and swiftly disseminate quality information relevant to small firms in the UK". The Section primarily supports the work of the SBS by ensuring that the organisation possesses the necessary research and information to inform its policies and to aid the design and delivery of its services. The Unit has a diverse range of customers, whose needs must be satisfied through a tailored approach. This can best be achieved by building on its existing capabilities and operations through the development of a structured research program. This program is founded on the establishment of a detailed database of research that positions the SBS at the ‘HUB’ of informational requirements on small business and entrepreneurship. Such an ambition can only be accomplished in partnership with all other stakeholders in this field of activity.

Aims

4. Research will play a significant role in the SBS, and has been identified as a key strategic objective within the Corporate Plan. It is essential that the work of the SBS considerably enhances the performance of its customers. The long-term ambition of the Research and Evaluation Unit is to confirm the reputation of the SBS as an organisation where research is highly valued, and that the Unit itself becomes a centre of expertise in small business and entrepreneurship research. Adding real value requires a comprehensive knowledge both of the needs of small businesses, and of the manner in which the SBS can most effectively contribute to meeting those needs.

5. The short-term aims of the strategy are:

    1. To ensure that a thorough understanding of the needs of SMEs is continually at the heart of what the SBS does;

    2. To ensure that the research activities are more strongly focused on supporting the objectives of the SBS;

    3. To make research on small business and entrepreneurship more co-ordinated across all stakeholders;

    4. To raise the quality and relevance of small business and entrepreneurship research, not just in the SBS but throughout the UK;

    5. To capture more information about small business and entrepreneurship, and to make that information more easily and quickly available to the SBS and other stakeholders.

6. The achievement of these aims requires a perspective that is customer orientated and international in outlook. It necessitates examining best practices on a global basis in order to deliver the most complete information possible (within time and financial constraints) to all of the customers of the Research and Evaluation Unit.

Ensuring that a thorough understanding of SMEs’ needs is continually at the heart of what the SBS does

7. The establishment of dedicated research, monitoring and evaluation teams within the SBS, and the introduction of a research strategy, are positive steps towards ensuring that SBS policies and services are based on a thorough understanding of the needs of SMEs. Building information more systematically, for example through a Research Database, will further assist the realisation of this aim.

8. The Research and Evaluation Unit will continuously work to raise the general knowledge throughout the SBS regarding what is already known about small businesses from research. It is important that everyone working in the SBS has at least a basic comprehension of the principal issues affecting SMEs at the current time. Everyone within the organisation should also be aware of the range of research methods open to the SBS. This will give SBS staff a better understanding for what questions can be answered by the Research and Evaluation Unit, as well as making them more knowledgeable when working with external stakeholders. As part of this process, a leading academic institution has been contracted to lead a series of expert seminars for SBS staff on key issues such as venture capital, micro finance, female entrepreneurship, and regulation.

9. Staff in the SBS will have access to research findings through:

i) The SBS Intranet which will contain summaries of specific research areas and links to the Research Database (online by October 2001).

ii) Regular briefing and short policy focused summaries of new research as they becomes available, and an annual report (March) on research completed into the needs of small businesses, SBS outputs, and the continued barriers to formation, growth, and survival.

iii) Providing advice on request from the SBS Research. Since it is also in the SBS’s interests for its partners and other stakeholders in the small business sector to have access to research knowledge, a telephone ‘Helpline’ number and email address for the Research Unit has been made publicly available (published and staffed since August 2000).

10. A training and development plan for the research, monitoring and evaluation teams will establish a set of core research skills for all staff, and the training and development options open to them. The Unit will encourage study towards professional qualifications. All staff will also have a personal training and development plan to help them continue their professional development. To help spread the impact of research throughout the SBS and develop the understanding of the value of research to achieve aims, the Research and Evaluation Unit will offer coaching sessions and training seminars to policy makers.

11. Much of the success of the SBS will depend on its ability to influence policy in other parts of Government. This aspiration will be more feasible if there is a greater understanding of the needs of SMEs due to the information gathered and disseminated by the Research and Evaluation Unit. Sharing knowledge of the work of the Section across the Government research community can encourage this process. Advising researchers in other Departments of the methodological issues and considerations surrounding small businesses can engender collaborative responsibility for the development of the potential for small businesses.

Ensuring that the research activities are more strongly focused on supporting the objectives of the SBS

  1. The objectives of the SBS are the priorities of the Research and Evaluation Unit. Reinforcing this commitment is achieved by identifying key research areas such as social inclusion, ethnic entrepreneurship, and barriers to growth, and then initiating research that will lead to greater entrepreneurial opportunity and potential for the targeted groups.

  2. A central requirement for small businesses achieving their potential is access to information. Good information allows decision-makers to make a more informed judgement leading to the increased probability of a successful outcome. With the Research and Evaluation Unit possessing an easily accessible database of high quality relevant research on small businesses and entrepreneurship, entrepreneurs and owner-managers can better realise the potential of the enterprise through the utilisation of this database.

  3. The Research and Evaluation Unit is committed to the continual investigation of world class benchmarking by reviewing international research on areas of primary interest to the SBS. This will involve constantly scanning the work in other countries to unearth best practices from elsewhere that would lead to the improved performances of small firms in the UK.

  4. The Unit will continuously monitor the performance of the services of the SBS itself, and assess the impact that its work is having on the UK economy. This will be done by commissioning regular external surveys of SBS clients, and by establishing guidelines and good practice for internal client surveys. This process of perpetual self-evaluation will facilitate the SBS’s ambition of achieving the highest standards of service delivery and value for money.

Making research on small business and entrepreneurship more co-ordinated across all stakeholders

16. The SBS itself has limited resources for research. This means that the Research and Evaluation Unit must prioritise the time and money spent on research on a relatively small number of projects that are most likely to help the SBS meet its objectives.

17. All research projects that will be conducted or sponsored by the Unit should be clearly identified with at least one of the objectives set out in the SBS Strategy or the SBS Business Plan. Furthermore, all research projects should explicitly set out to answer one or more of the following policy questions:

    1. What is the contribution of small and new business to prosperity? Research should help the SBS to understand the role of small and new businesses (both actual and potential) in job creation, the competitive process, the supply chain, the diffusion of new technology, innovation, labour market flexibility, etc. It should address areas where the contribution of small businesses is perceived to be weak, as well as strong (e.g. workforce training). It should not generalise to the ‘typical’ small firm but formulate a realistic assessment of the contribution made by different types of smaller businesses and entrepreneurs. Example: a study to quantify the number of jobs created and lost by firms of different size.

ii) What is hindering small business owner-managers or potential entrepreneurs from achieving their potential? Research should identify barriers to small firm formation, survival or growth. The barriers may be internal (e.g. lack of management skills) or external (e.g. regulation). They may be the result of markets, cultural factors, government intervention, a relative weakness in the UK small business sector compared to other countries, or a gap in the delivery of a service provided to business. The research should additionally identify enablers to the fulfilment of small firm potential. Example: research to identify the key features of a supportive business environment

iii) What is the impact of the barriers that prevent small business owner-managers or potential entrepreneurs from reaching their potential? Research should identify where the impact of a barrier mainly falls and then quantify it. The barriers may hinder the exploitation of people’s ideas and talents, suppress the rate at which new businesses are started or survive, or reduce their inclination or ability to grow. They may have social as well as economic consequences. The impact may be universal or concentrated in certain locations, or on certain types of business or sections of the population. Example: research to quantify the effect of late payment on avoidable business failure.

iv) What is the most effective way of removing or reducing the barrier? Research should assess the appropriateness of government intervention, the most suitable form of intervention (e.g. financial support, the provision of information or advice, or legislation), the identification of best practice, and estimate the likely impact and value for money of removing the barrier. A further important issue for consideration is the extent to which different forms of intervention can complement both each other and private sector activity. Example: research to assess the relative impact on late payment of legislation and the encouragement of better payment practice.

After the policy response has been decided, Evaluation is used to assess how that response has been implemented and its impact and value for money. In particular, Evaluation aims to measure the net effect of policy after allowing for other influences which affect the outcomes of policy interventions. This involves measuring against a benchmark of the outcome if there was no intervention. Evaluation work often needs to establish that benchmark as well as measuring the effects of the policy. Evaluation evidence adds to the knowledge base that is used to inform consideration of future policy options.

18. Social inclusion is a theme that runs strongly throughout the research activities of the Research and Evaluation Unit. Given advances in research methodology and client management systems, it is possible to record relevant social inclusion characteristics within most research projects as routine, particularly within the national client database. Where it is particularly relevant to a project, the researcher will also ensure that the research design (e.g. survey sample) will generate robust findings for socially excluded groups. Beyond better recording, research activities will draw on available expertise in the social inclusion field to ensure that the research methods themselves (e.g. questionnaires, collection methods) fairly and comprehensively reflect the needs of all types of SMEs and potential entrepreneurs.

19. Beyond the overall criteria identified, the choice of projects will be determined by:

i) How much is already known which suggests that a particular issue is a major barrier;

ii) The extent to which there is a clear gap in understanding of the particular barriers facing SMEs or people considering starting a new business. To a lesser extent, the research priorities will include issues where there is a lack of up-to-date research or a lack of consensus in existing research findings;

iii) Whether the barrier is an untried area of government intervention;

iv) The amount of SBS resources already involved or likely to be needed to resolve the issue.

v) The degree to which the research will help identify the most effective way of achieving the objectives of SBS.

20. In summary, the priority areas for research over the next three years are:

i) The barriers facing small businesses which most seriously affect their inclination or ability to grow;

ii) The strengths, weaknesses and gaps in the supply and awareness of business support;

iii) The impact the SBS is having in creating an enterprise culture;

iv) The barriers to firms achieving their full potential (particularly barriers which socially excluded groups must disproportionately endure).

Raising the quality and relevance of research

21. Most small business and entrepreneurship research in the UK takes place beyond the SBS, and indeed beyond Government. However, the SBS is in a unique position to help ensure that all such research is more co-ordinated and policy focused. To achieve this ambition, the Unit is building a database of research publications regarding small business and entrepreneurship in the UK. This database will give access to quality, relevant, and easily accessible information for all stakeholders via the Internet. The database will deliver two critical co-ordination functions. First, through the database, researchers will be able to clearly identify what research has already been done, thereby reducing the prospect of duplicating research already done. Secondly, by building a database of such size that it becomes the automatic first point of contact for information requirements, the SBS will become ‘the HUB’ of the information network. In establishing standards for what is accepted onto the database, the SBS will raise the standard of research generally throughout the UK, because to get on the database the research must be of a certain quality and so not being on the database will reduce the visibility of a researcher’s work. Further steps that the Research and Evaluation Unit are taking to accomplish this ambition include:

i) Easier access to a wide range of statistics on the size and composition of the small business sector. This will allow researchers to judge the representativeness of their studies and help ensure that, when it is appropriate to do so, quantitative research is weighted to the true population. As a first step the Section will make the annual SME Statistics for the UK dataset available free online by May 2001.

ii) Part of the SBS website will be dedicated to the reporting of small business research, including findings and current areas of interest. This will be expanded to include not just past research but also related links, conferences, agencies, institutes, and other relevant stakeholders. This will help researchers ensure that their work builds on existing knowledge, and will also encourage collaboration.

iii) Producing a private edition of the Register of Research Interests, with each person on the list receiving a monthly email update of SBS activity (by May 2001).

iv) Making available further funding for dissemination purposes, wherever it is considered that it adds value to the services of the organisation. For example, the Research and Evaluation Unit is a principal sponsor each year of the ISBA conference).

    1. Stimulating the development of new methods for studying small businesses and entrepreneurship through partnership and sponsorship, even if the research project itself may not help answer a specific policy question. The Unit will also encourage the innovative application of methodology. In particular the Unit will aim to include in its research program at least two such projects a year (e.g. the development of methods of measuring small business and entrepreneurial activity by socially excluded groups).

    2. Establishing better links with research councils in order to develop partnerships and networks for stakeholders in small business and entrepreneurship research.

    3. Sponsoring a PhD Bursary of one new student per year, and also delivering Doctoral Seminars in conjunction with key stakeholders.

22. The Research and Evaluation Unit will disseminate with alacrity what it regards as exceptionally high quality and focused research on macro issues. This will help researchers to maximise the impact of their work on SBS policy. This can be achieved through the tendering process, by giving feedback on proposals received or funded, by highlighting what is regarded as exemplars in small business research, and in the annual report of the Unit on research. The Unit will also stimulate more peer review and feedback in the small business research community by acting as conduit for information and research needs. For example, the Research and Evaluation Unit will fund a more sophisticated feedback exercise for authors of papers presented at the ISBA conference each year.

Capturing information and making it more easily and quickly available

23. The great breadth of small business and entrepreneurship research, and the number of researchers involved, is naturally of great advantage in helping the SBS meet its objectives. However these same factors have in the past made it difficult to collate and distil sound research findings in time to inform the policy making process. As previously stated, the Research and Evaluation Unit plans to build a substantial Research Database and a Register of Research Interests, and to make more effective use of the Internet to share knowledge. The Section will also:

    1. Establish a small roster of researchers, probably on call-off contracts, to speedily allow the commissioning of literature reviews or presentation of expert seminars in response to policy makers’ changing areas of interest;

ii) Build stronger lines of communication with key researchers especially among:

24. The growing reliance on research based on relatively large scale sample surveys has regularly impeded the ability of the Unit to speedily answer research questions posed by policy makers. Survey work has increasingly tended to be ad hoc, slow, and superficial. A planned regular small business omnibus survey will partly improve the quality and focus of this survey work. During the course of the research the Unit will also seek to exploit further a range of non-survey sources increasingly available to the Unit since the SBS was established, including:

i) The National Client Database, which will generate data on many different kinds of interaction (enquiries, applications, advice sessions, etc.) between small businesses and the SBS and its outlets.

ii) The qualitative knowledge gained from direct contact between SBS officials, colleagues in partner organisations, and small businesses themselves. The Unit is investigating means of capturing and ordering this knowledge but these can only effectively commence now that the new franchises have been established.

iii) Existing datasets (official and commercial business databases, bank account records, Companies House records, SBS client management records, etc.). The Research and Evaluation Unit is additionally expanding its experience in linking datasets (or subsets of them) to allow tracking of the growth and survival of businesses in tandem with the advice and support that they receive (continuous).

25. The increased utilisation of the above data sources for research also helps to minimise the survey burden placed by the SBS on small businesses. More generally, the Unit will operate survey control procedures across the SBS to minimise duplication and unnecessary survey burdens (in place by July 2001).

Monitoring the strategy

26. Given the limited resources for research in the SBS, the strategy outlined is ambitious and courageous. This means it needs reviewing regularly which will be done informally every six months and more formally, including a consultation exercise, every year. The review will consider:

i) The research priorities, in the context of the SBS Business Plan and the national strategy for small business support.

ii) What steps have been taken to improve the quality, relevance, and accessibility and use of research, and whether they have been successful.

  1. The programme of projects – what progress has been made and their continued relevance.

26. All completed research projects that the SBS either conducts or sponsors will also be individually reviewed against written quality standards. These are still being developed but will include the following:

27.The Research and Evaluation Unit will publish an updated strategy annually, including the findings of reviews and a summary of its work throughout the preceding year.

Summary

28. The vision of this strategy is broad, inclusive, and future orientated. It builds from the existing capabilities of the Unit, and drives the Research and Evaluation Unit towards becoming an acknowledged centre of expertise in small business and entrepreneurship research and information dissemination. The Unit will be ‘the HUB’ of the information flow, making a difference to the performance and strategy of the SBS by informing policy decision-making, and to the government through the provision of detailed research, analysis and interpretation. Stakeholders outside government departments will also be well served through the co-ordination and promotion of high quality and relevant research that is made available quickly and accessed easily. This commitment to a rapid response to the needs of all of its customers will make certain that a reputation for excellence will be developed by the Unit and by the SBS.