Vince Cable recently announced a variety of additional support mechanisms for small business – new funding for loans and additional mentoring and support services.
There is a new website – Business is Great Britain – which aims to provide information and resources to UK businesses to plan, export, lead and nurture their development.
The web pages also contain useful links to funding sources, business grants etc., to help that growth.
The new British Business Bank has allocated its first £45 million pound tranche of funds, the deployment of which should begin in early 2014. The money is being placed with finance intermediaries to explicitly be invested in the support of SME’s.
In the ministerial announcement was an indication that the funds may be invested in ‘…businesses that offer non-traditional channels of lending that may not be regulated by the Financial Services Authority or the Office of Fair Trading’. Is this an oblique reference to the Social Business market?
The Sector Mentoring Challenge Fund aims to encourage employers, trade bodies and others to work together and deliver tailored mentoring solutions that address real business needs in their sector.
This is a one off funding tranche, competitively aspiring to fund innovative mentoring and support for business sectors. The Fund is specifically looking for proposals that can become self funding examples of sector support.
Any help for the SME sector is useful in the current economic climate, although the acid test will be how conservative in approach these new intermediary funds turn out to be. More support, or more of the same, only time will tell?
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Nottingham Trent University Business School will be coming to a complete halt shortly. No, not a disastrous service failure, but the arrival of Thinkubator Challenge 2013.
This is a whole day in which the academic staff and students are divided into ‘hubs’, and will work together to devise solutions and suggest strategic choices for the challenges that they have been submitted.
“With access to the full resources of Nottingham Business School, each hub will focus on one individual challenge at a time. Organisations submitting challenges will receive a short response, electronically, on the day, which will outline the hub’s thinking, recommendations and advice on practical steps to take”.
It will take place at the Business School on November 27th 2013. You can read more about the Thinkubator Challenge 2013 here,
(Ed: What a fantastic idea! How about a one day event in partnership with the Social Finance sector to explore options and support the social business sector in 2014?).
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Academic underpinning of development – Nottingham has two universities…
We featured the early results for GDP from the Office of National Statistics for Quarter 2 in 2013 recently. These are now firm and the results are detailed below. The slight air of optimism about UK Ltd continues to be felt, we would argue.
UK gross domestic product (GDP) in volume terms was estimated to have increased by 0.7% between Q1 2013 and Q2 2013, unrevised from the Second Estimate of GDP published 23 August 2013. Between Q4 2012 and Q1 2013, GDP in volume terms increased by 0.4%, revised up from the previously estimated 0.3% increase.
We were also delighted to read a recent article in the national press, where Nottingham, our home city, was cited by the Governor of the Bank of England as a ‘bell-weather’ for the UK economy. With data showing that nine out of ten jobs in the city are currently in the service sector, a move back to ‘creative manufacturing’, in all it’s diversity, is a great echo to the high Victorian energy of the city.
Katie Allen, writing in The Guardian, described Mark Carney’s view of Nottingham as a city where growth was rising, but that the quality of that growth and innovation was also significant. Gone are bicycles and cigarettes, but they are replaced by significant entities in bio-science, engineering and the arts/creative sector.
Examples in our city include the creation of new Creative Quarter Community Interest Company, as well as the delivery of a new BioCity development to foster the city’s lead in the sciences.
With the development of the Creative Quarter, it is great to see social business as a key plank in the city’s developing enterprise structure.
If, as a social business looking to make an inward investment, or to explore the context of Nottingham a start-up or social business development setting – you can find the city’s Growth Plan online here.
The team at SEEM, with our expertise in social business start-up and skills in delivering social finance would be happy to help you shape your project too. Contact us here…
Interesting web resources:
Mapping the Moment – a map based examination of the ‘cultural industries’ in Nottingham between 1857 – 1867
Knitting Together – an examination of the East Midlands knitting industry, 1600 to 1970. (Much changes in the economic landscape for our city and its hinterland, but much remains the same. New technologies, mergers, enterprise rise and fall…)
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The internet is now a prime driver for economic growth and is continuing to shape how enterprises reach out to partners, funders and their customer/client base. Access to it makes it the conditioning and mediating framework for a discourse about enterprise, from the smallest community business to the very largest corporation.
A recent 2012 study by the Boston Consulting Group – The Internet Economy in the G-20, the $4.2 Trillion Growth Opportunity declared that…
The (internet) contribution to GDP will rise 5.7% in the EU and 5.3% in the G-20. Growth rates will be more that twice as fast – an average annual rate of 18% – in developing markets, some of which are banking on a digital future with big investment in in broadband infrastructure. Overall, the internet economy of the G-20 will nearly double between 2010 and 2016, when it will employ 32 million more people than it does today…
Enterprises – social, community or corporate in governance – ignore web connectivity at their peril. Alongside this bow wave of expansion for connected business comes a shift in perception in what it is that the governance, education, data management, capital and talent needs of our communities of interest are, in order to respond to this internet fuelled growth.
This is a collaborative concept delivered from a number of key internet players in the current EU marketplace. The creators of web based services such as Spotify, Atomico, Seedcamp and Tech City UK amongst others. If the thought of thinking about uber-Geeks and technology puts you off, persist with this article because the thought leaders in their manifesto do have some challenging and innovative ideas that would, if achieved, condition your internet driven social business for decades to come.
Here at SEEM we are always interested in disruptive models of economic creation, good governance, enterprise support and delivery. There are two elements of the manifesto which strike a chime with us and we’ll comment on them below.
Education and Skills:
The manifesto highlights a European Commission study that found across 27 EU countries some 20% of secondary level learners had never or rarely used a computer in their studies. The EU was also critical of teacher training in the IT arena. Our manifesto authors place stress on making teachers digitally confident and with increased competence to rise to the challenge of a digital society.
Teach every child, they state, the principles, processes and the passion for entrepreneurial endeavour from the earliest age. (The web offers a range of free creative, analytical and publishing tools in the Open Source context, that could, for example, transform educative processes around IT if fully adopted).
The final elements of the education manifesto are key to radical economic growth and could, if adopted using the social business framework, transform our sector.
Encourage university students to start a business before they graduate, as well as preparing tertiary level students for a radically different market place. For the social business sector, this chimes well with our debates at SEEM about how to foster the concept of social business creation and support as a life aim in business schools and on IT and commerce based courses.
The authors of the manifesto argue, in a similar vein, that the very largest corporation should open up their training departments to the general public, thereby increasing the critical mass of skills in a community as a necessary condition of creating new, web driven enterprises of every governance hue.
Access to Capital:
Capital is king or queen in starting a new business whatever its philosophical approach to the community marketplace. Revision to tax breaks and increasing the ease with which companies can access finance are mainstays of this part of the manifesto.
Interestingly, the manifesto puts a focus on buying more goods and service from small business. Although not made explicit in the manifesto this is the localism and SME support arguments writ large in EU lettering. It is difficult and complex for small businesses to bid for government contracts in the UK, despite recent moves to make procurement a more open process, but encouraging local purchasing initiatives would be one way to encourage the take up of provision from smaller entities, we think.
The final innovation we recognise in the manifesto is the argument for the creation of a new business form. The E-Corp. This new cross border entity would be creatable on-line and up and running in 24 hours. (A little over optimistic we think…), but the concept holds good. Why should innovative businesses committed to social impact locally not also have the opportunity trade internationally and generate surpluses from outside their local economy to deploy in their own?
This takes the Keynesian notion of ‘leakage ‘ from an economy and reverses its polarity – their leakage can become our social value. Brilliant!
Generated by key thinkers in the EU technology sector, this manifesto none the less offers some innovative and interesting ideas about how to condition change for economic growth across the EU. Changes which are pertinent to start-ups and social innovation across the piece in the UK, whatever profile your business has. See the web site here…
The SEEM Team – thinking about social business start-ups
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McKinsey & Co began a programme of research in 2011 entitled the Cities Special Initiative. One result of which is a report How To Make a City Great. The short video below offers the company heads a chance to explain their thinking on the project and developing cities around the globe in general.
McKinsey, despite their reputation for defense of naked capitalism and overwhelming shareholder benefit, have a strong record in fostering participatory public sector projects. This report nicely captures some of the philosophy around community and public sector engagement, as well as clearly recognising that pure economic growth in the city or city region does not always automatically deliver social justice or environmentally friendly development. It is refreshing to hear it.
We have recently published an article arguing that the social business sector, or the general economy, may be entering a new social business modality…a revolution in approach, if you will. Read more about community economics here.
It is doubly refreshing to see scions of corporate advance taking a collaborative, community engagement and environmentally concerned tack in this report. The report offers a number of key concepts that cities around the globe embrace, in order to become more economically and socially successful than their peers.
Achieve smart growth
Do more with less
Win support for change
Making a great city anywhere…
Achieving smart growth is based on four key principles, adopting a strategic approach to development, planning for change with the environment a key part of that change, and delivering work that insists on opportunity for all.
Cities do more with less when they manage project expenses with real vigour and rigour. When partnerships are fully explored with realistic outcomes and humanity in their engagements. They make accountability for the project investment paramount and finally, embrace new technology in data, communication, marketing and collaboration.
Cities, the report argues, do best in winning support for change when they build projects and sub-projects around a personal vision, affording charismatic ambassadors for the work to lead from the front. Building teams that are committed and skilled in their areas of expertise, whilst still making all accountable are key drivers to success. And finally, although we have heard this many times in the past in a variety of settings – strive to forge stakeholder consensus, listening, reflecting and empathetically working together to achieve city wide advance.
The report offers some great examples of how fresh thinking can triumph. The city of Toledo, whilst only ranking 182nd in a Forbes list of Best Places for Business in the US, still managed to attract $6 million of Chinese industrial manufacturing investment recently, by sending their committed and persistent city mayor to China three times.
Conversely, the Chinese city of Chengdu, regardless of the rigidity and conservatism of regional government in the country, has a dynamic mayor who has changed the department of Migrant Control, a large issue for Chinese cities, into a department of Migrant Integration – with a clear mandate to increase uptake of education, health resources and community resources – adding to the expanding city’s human capital and enterprise creation.
These issues of quality of life for residents and for economic growth really matter. Urbanisation is not diminishing, it is increasing. By 2030, 5 billion people, 60% of the world’s population will live in cities. 1 billion live in slums, so that not only is affordable housing a key priority, but economic growth – ethical, environmentally careful and socially inclusive – are also compound elements of a great city.
We think the ‘talking heads’ at McKinsey are, in the short film above, describing a city based on the principles of social business. They are just not saying so. The global examples offered in the report text are wholly contingent with the idea of enterprise creation, albeit with social equity and quality of life as an admixture of success.
Also interestingly, if we take the key thematic lines of the report about doing more with less, accountability and good, practical team work across development agendas, we think there is a template for rural communities emerging, who could use these key philosophies to enhance non-urban employment, communications and technological access too.
Which community would not want that, urban or ex-urban?
The SEEM Team – thinking about good ideas
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The Office for National Statistics (ONS) has just published its new preliminary data for Quarter 2 contributors to Gross Domestic Product in the UK. It is the first time, according to the ONS, that all principle sectors of UK business have seen positive growth since mid-2010.
The short video below illustrates the ONS data, showing how core business sectors relate to each other and contribute the UK economy as a whole. Services, as a broad economic theme, now represent the largest contributor to ‘UK Limited’.
Aggregated services in the analysis has continually performed well, since the massive economic contraction in 2009. To have so many core indicators rising must be a sign of improvement, or rather a sign that using traditional metrics, the economy has begun to recover.
What is never delineated in such metrics or traditional analysis is the change of thinking, or ‘modality rotation’ that might be occurring as a result of downturns altering mindsets, philosophical attitudes to investment or changes to the political landscape in communities.
In our next, fuller journal post, we will examine the concept of ‘community economics’, and how the emergence of ideas, which we have commented on in recent Mining the SEEM articles, have arguably coalesced into a new economic form.
Overcoming perceptions of enterprise ‘drag’ in communities
Nick Clegg, Deputy Prime Minister and the the Department for Communities and Local Government (DCLG) have just released a new report Ethnic Minority Businesses and Access to Finance, which following talks with the British Bankers’ Association, commits mainstream banks to a series of policy initiatives to support enterprise in ethnic minority communities.
…the government has agreed with the British Bankers’ Association that the banking industry will commit to a series of measures to improve access to finance for ethnic minority business groups. This includes collecting data through independent research, for the first time, on the experiences of ethnic minority businesses seeking finance.
The Ethnic Minority Businesses and Access to Finance report was published on the 30th July 2013 by the Communities Minister, Don Foster – with the analysis in the report indicating that there is already much good work underway to enhance enterprise funding in these target communities, but that there is also still much to be done.
The report tells us that business in ethnic minority communities carry a quintuple burden to accessing finance…
shortage of collateral
low credit scoring
minimal formal savings
an unestablished financial track record
the difficulty of language barriers
Whilst some of these drag factors can be attributed to any sector where social finance is deployed, for example, language and culture can be additional burdens on enterprise creation in a dynamic, culturally mixed and enterprise leaning community.
The report does recognise interestingly, whilst there is no apparent discrimination or prejudice in play within mainstream financial cultures, the report states, there is strong evidence that ethnic minority entrepreneurs perceive this to be the case and that access to mainstream financial advice and guidance is, in itself, seen as an intimidating process.
The report suggests that banks and mainstream lenders must make a continued commitment to overcome these mis-perceptions.
Finally, the report outlines the role that Local Enterprise Partnerships (LEPs) can play in supporting the policy roll-out, and the particular relevance that Community Development Financial Institutions (CDFI) and alternative sources of finance can play in supporting ethnic minority community enterprise.
Promoting these alternative finance schemes is a strong part of the report action plan, which coupled with our sector knowledge of local communities and awareness and sensitivity to cultural norms, can only endorse the role that Social Finance can play.
On balance the report is well considered and broad in its scope and to be welcomed. The elephant in the corner, despite the passion and commitment of the Social Finance sector, is how committed mainstream banks will be regarding pressure to lend and fund business projects. Their track record to date, even towards core SME support, is not one of sparkling achievement.
The second part of Lord Young’s report on business, delivered as business advisor to the Prime MInister, focuses on the importance of the micro-business in the UK. A key plank to the development of enterprise and sustainability, whether in the social sector or not, is the long term growth of organisations with less than ten members.
Growing Your Business – a report on growing micro-businesses offers insights into the importance of the sector, and how, as community populations flex and employment rates fluctuate, it is the micro-business that inexorably feeds the enterprise seed-bed activity of the nation.
The report, publish in May 2013, does contain some reference to the social economy, although not significantly, however the index of resources and the layout of strategies for growth are highly applicable to any ambitious social business organisation.
The report focuses on three key strategic areas for enterprise growth…
Confidence – in the small enterprise embracing the belief that they can make it happen. Particularly important in a groundbreaking Social Business.
Capability – Mapping and deploying your key skills, as well as recognising the ones you do not have, is a key factor in growth. The report clearly evidences that asking for external help is a key indicator of business ambition, but also a key factor in growth and sustainability.
Coherence – a belief that support for micro-business, particularly in the social sector, is ‘…designed and marketed in way they understand, trust and can find…’.
SEEM can play a key part in this role, disseminating good practice, articulating the needs of the sector in a language understood across the piece, as well as working with members and partners to stimulate social finance initiatives and growth across all elements of the sector.
Lord Young covers several key areas on marketing issues in this regard. Do the government articulate or disseminate loans and finance information for any sector widely and effectively?
Is public sector procurement significantly focused on a one stop shop approach, and are procurement processes properly understood, both in the social sector, as well as by the public sector when looking back at us?
This ‘single market’ response to all forms of procurement is of particular importance to the social sector, we would argue. Small or ‘social’ does not necessarily mean unprofessional or ineffective. Do local authorities and other major procuring organisations in the public sector still, even in the summer of 2013, fully appreciate the latent delivery capability of the micro-social sector?
The ‘using what we have better’ section of the report is particularly telling in this regard. Exploit your Social Business potential to the full. Talk to SEEM.
