Sustaining Growth for Innovative New Enterprises

Lead Research Organisation: University of Manchester
Department Name: Manchester Business School

Abstract

Gaps remain in our understanding of how different combinations of business, technology and relationship strategies influence the growth of small and medium-size enterprises (SMEs), especially in the context of networked interactions by SMEs at regional, extra-regional, and sectoral levels. In each new round of economic and technological development, these strategies evolve, highlighting the importance of tracking in close to real-time the nuances of emerging enterprise strategies. In this project, we will probe differential strategies for SME growth and the role of regional clustering in the growth of innovative companies, building on new and unobtrusive methods of web mining to gain timely information about enterprise developmental pathways. Three key research questions will be addressed: (1) What differentiates the business strategies, technology pathways, and relationships of innovative companies that stay in business and grow? (2) How does regional clustering influence the business strategies, technology pathways, and relationships of innovative companies that stay in business and grow? (3) What are the contributions of policy-induced resources in supporting innovative companies that stay in business and grow? These questions will be probed through a mixed-methods approach using both quantitative and qualitative data. We focus our research on the emerging green goods sector (GGS) - comprising firms producing outputs that benefit the environment or conserve natural resources, with an international comparative element involving the UK, the US, and China. We will identify 300 GGS companies in each country established during the time period 2004-2007, for a total study sample of 900 companies. We will apply a stratified sample selection procedure, to match the distribution of the UK GGS sector by broad product classes with the US and Chinese GGS sectors. We will then combine structured and unstructured data sources to track the origins, business, technology, and relationship strategies, and performance outcomes of these firms through to 2011. Structured data will include corporate databases, corporate patents and publication records. Unstructured data will be derived from new methods of web-scraping and data mining the current and archived web-sites of the sample enterprises. Survival analysis will indicate the pathway of firms from the founding period through to the current period. Hierarchical cluster analysis will be applied to explore differential business strategies by the three countries and by types of metropolitan location and product class. Multivariate regression will relationships between high growth (and other) outcomes and business strategies, technological approach, and the role of regional relationships and policy instruments, controlling for country and other factors. Insights from US and Chinese enterprise growth strategies will be compared with those of UK firms. In the subsequent phase, we will undertake case studies with selected UK enterprises, to test and refine propositions about differential strategies, regional and policy interactions, and outcomes. Interviews (60) will be conducted with high growth firms, stable firms, and other key informants in five UK metropolitan areas. The interviews will examine what differentiates the most successful firms, trace the use and benefit of technology-related and other programmes, and probe for wider policy-related locational attractiveness. The project will be led by the University Manchester in partnership with Experian UK, Georgia Institute of Technology (US), and Beijing Institute of Technology (China). An active dissemination and engagement programme will be pursued with the academic and non-academic worlds, including mechanisms for advanced training and outreach to users in the business sector, including start-up firms and business support programmes, to university and other technology transfer managers, and to local and national policymakers.

Planned Impact

The beneficiaries of this research in the near and mid-term will include business, government, and intermediaries. Management insights will be developed and disseminated of value to enterprise managers, including those in technology-oriented start-up and small and medium-sized enterprises (SMEs), to business support programmes, and to those who undertake investment, financial, and procurement activities with innovative SMEs. Policy insights will be developed and disseminated to university and other technology transfer managers, and to local and national policymakers. Included among these users are the newly-formed local enterprise partnerships, other local economic and business development organizations, and agencies in the devolved administrations. Given our sector focus on green goods industries, we also value in the findings from companies and organizations involved in energy, environment, and low-carbon production and consumption. Methodological techniques (for developing business intelligence from unstructured enterprise web sites) will be of benefit to users in the academic and non-academic worlds, including other researchers, students, management analysts, and consultancies. In the longer term, potential beneficiaries also include metropolitan and regional communities that will benefit economically, socially, and environmentally from the additional jobs, products, and clean and renewable technologies that could accrue through management and policy actions influenced by this research and associated knowledge spillovers.

The user groups will benefit from the research if the findings from the project stimulate changes in management strategy and policy actions that result in (a) additions to the number of SMEs that experience sustained growth in scale and scope in multiple regional agglomerations around the UK; and (b) are successful at home and abroad in marketing products and technologies that benefit the environment or conserve natural resources. Major changes in management strategy and policy take time and effort; the contributions of this project to such changes will be through new knowledge generation, the international comparative elements (learning is often facilitated through comparison), the development of clear and actionable recommendations, the new methodologies developed, training activities, and the active dissemination of results to the user groups directly (workshops and events) and indirectly (media, blogs, web presence, and linkages with other organizations).

Publications

10 25 50
 
Description The study finds that green goods SME growth in Britain and the United States is influenced by the internal capability of firms to make pivotal strategic changes and to connect with universities, technology centres, government resources and private sector funding. Exporting is also important for British firms; and innovative green goods SMEs are found in multiple locations in Britain, a positive finding in terms of rebalancing.

In China, rapid growth in green goods SMEs has been particularly dependent on government promotion of renewable energy sectors. But following recent declines in such areas as solar panel manufacturing due to over-production and reduced international demand, some Chinese firms are pivoting into more advanced technologies.

Variations in British firms' performance by sector highlight the influence of policy. SMEs in renewable energy equipment have seen relatively strong overall sales and job growth over the last decade, but performance has been weaker in green building technologies. Policy has encouraged offshore wind energy generation, yet proven weaker in supporting energy efficient homes and buildings. In general, SMEs in Britain are still experiencing difficulties in accessing early stage finance, which raises concerns about the UK's fragmented support landscape and a regulatory environment that lacks the predictability needed to provide incentives for long-term investment
Exploitation Route The methods developed have been, and will be, taken forward and developed by the research team and by other researchers to use in further projects. This includes web mining of business strategies of firms in innovative materials sectors (graphene) for Nesta (in progress). The findings will be useful for UK policymakers, businesses, and intermediaries at national and local levels in terms of intelligence for policy and management actions. The findings will assist in bench-marking UK efforts to support growth in innovative manufacturing SMEs in comparison with the US and China. Analyses developed by the project will also be helpful to UK SMEs seeking to compete with US or Chinese firms in the UK, the US, China, and other markets.
Sectors Aerospace, Defence and Marine,Education,Energy,Environment,Financial Services, and Management Consultancy,Government, Democracy and Justice,Manufacturing, including Industrial Biotechology

URL https://research.mbs.ac.uk/innovation/Research/Currentprojects/SustainingGrowthforInnovativeNewEnterprises.aspx
 
Description The research investigates how business strategies, regional linkages and policies influence the growth of green goods manufacturing SMEs in Britain, China and the United States. The new methodological approaches developed by the project (search approach for green goods manufacturing definition and web mining of company web sites to gather business intelligence) have been helpful to other researchers and have been disseminated through publications and training. The findings of the study are being disseminated to policymakers, businesses, and intermediaries, including through conferences, a workshop in London at BIS in December 2014, and a workshop associated with the ESRC Enterprise Research Centre held in May 2015. In 2016, other researchers and policy organisations have cited our outputs and requested further information both about the results and data analytic methods.
First Year Of Impact 2014
Sector Aerospace, Defence and Marine,Education,Energy,Environment,Government, Democracy and Justice,Manufacturing, including Industrial Biotechology
Impact Types Policy & public services

 
Description Citation in Manufacturing Commission Report "Making British Manufacturing Sustainable."
Geographic Reach National 
Policy Influence Type Citation in other policy documents
URL http://www.policyconnect.org.uk/apmg/sites/site_apmg/files/industrial_evolution_final_single-paged.p...
 
Description Evidence Briefing (ESRC)
Geographic Reach National 
Policy Influence Type Citation in other policy documents
URL http://www.esrc.ac.uk/news-events-and-publications/evidence-briefings/support-for-green-goods-busine...
 
Description Narrative in Britain in 2015
Geographic Reach National 
Policy Influence Type Citation in other policy documents
URL http://www.esrc.ac.uk/files/news-events-and-publications/publications/magazines-and-newsletters/brit...
 
Description Centre for Synthetic Biology of Fine and Speciality Chemicals
Amount £10,300,000 (GBP)
Funding ID BB/M017702/1 
Organisation Biotechnology and Biological Sciences Research Council (BBSRC) 
Sector Public
Country United Kingdom
Start 11/2015 
End 11/2019
 
Description Digital Fabrication, Redistributed Manufacturing, and Governance
Amount £98,331 (GBP)
Organisation University of Manchester 
Sector Academic/University
Country United Kingdom
Start 09/2018 
End 08/2021
 
Description Nesta - big data research
Amount £45,350 (GBP)
Organisation Nesta 
Sector Charity/Non Profit
Country United Kingdom
Start 03/2014 
End 03/2015
 
Description Next Production Revolution: Institutions for Technology Diffusion
Amount € 9,000 (EUR)
Organisation Organisation for Economic Co-operation and Development OECD 
Sector Public
Country France
Start 12/2015 
End 12/2016
 
Title Green Goods Identification Method 
Description Green goods companies comprise enterprises in a range of industries that produce or market manufactured items that have environmental or natural resource benefits when used by other businesses, organizations or households. A new identification approach is put forward using search term combinations and text mining to discern green goods sector companies. This overcomes limitations of conventional definitions based on standard industrial classifications. The new method is tested through a search of small and medium-size green goods enterprises in the UK. 
Type Of Material Improvements to research infrastructure 
Year Produced 2013 
Provided To Others? Yes  
Impact The green goods search approach has been used to define green goods companies in the UK. It has also been applied in the United States and in China. 
URL http://www.sciencedirect.com/science/article/pii/S0040162513002813
 
Title Sustaining Growth for Innovative New Enterprises: UK Firm Data 
Description The database contains anonymous firm data from a sample of UK firms (N=304) engaged in green goods production. We combine data from structured sources (the FAME database) with unstructured data mined from firm's web-sites by saving key words in text and summing up counts of these to create additional explanatory variables for firm growth. The data is in a panel from 2003-2012 with some observations missing for firms. We collect historical data from firm's web-sites available in an archive. The database, along with a code book, is deposited with the UK Data Service. 
Type Of Material Database/Collection of data 
Year Produced 2014 
Provided To Others? Yes  
Impact This data has been used to investigate the contributions of strategy, resources, and relationships in how growth is achieved by UK firms engaged in green goods manufacturing. 
URL http://ukdataservice.ac.uk/
 
Description Experian 
Organisation Experian
Country Ireland 
Sector Private 
PI Contribution We worked with Experian to obtain their input to the project.
Collaborator Contribution Experian was an associated partner in the project, participated in meetings, and contributed UK and Chinese firm data.
Impact Data from Experian, combined with our own sourced data, contributed to research outputs to understand growth in UK and Chinese green goods firms.
Start Year 2012
 
Description Innovation Co-Lab 
Organisation Beijing Institute of Technology
Country China 
Sector Academic/University 
PI Contribution (1) We are designing an infrastructure for collaboration across the three institutions capable of facilitating research in science, technology and innovation analysis using large-scale databases and joint collaborative teams. We are using available systems and freeware to design this collaborative framework, which involves building shareable datamining capabilities and datasets, methodologies, and communication linkages. (2) We are extending and leverage research and research training capabilities, allowing (a) data-intensive international research projects in science, technology and innovation analysis to be undertaken more rapidly and effectively; and (b) providing new opportunities for research training of junior researchers and doctoral students. (3) We are also develop a model of collaboration that will be sustainable and scalable, and which can serve as a model for other China-US-UK strategic collaborations, also engaging additional partners.
Collaborator Contribution The other two partners have collaborated similarly through participation in collaborative research projects; exchanges; training; workshops & conferences.
Impact Outcomes from this collaboration include 2010, British Council seed funds; 2012 - involvement of HSE Moscow as an associated partner; 2012 - award of ESRC support for collaborative projects including the ESRC project on Emerging Technologies, Trajectories and Implications of Next Generation Innovation Systems; 2013, Designation of the Co-Lab as Innovation Base (Beijing Municipal Government); 2010-present, student exchanges; Conferences (IM2012, Beijing); Atlanta (2013); Academies (2013, 2014) and 2014 International Summer School on Emerging Technologies (Manchester). Collaboration is multidisciplinary, involving economics, policy, political science, management, information science, innovation studies, and other disciplines.
Start Year 2010
 
Description Innovation Co-Lab 
Organisation Georgia Institute of Technology
Country United States 
Sector Academic/University 
PI Contribution (1) We are designing an infrastructure for collaboration across the three institutions capable of facilitating research in science, technology and innovation analysis using large-scale databases and joint collaborative teams. We are using available systems and freeware to design this collaborative framework, which involves building shareable datamining capabilities and datasets, methodologies, and communication linkages. (2) We are extending and leverage research and research training capabilities, allowing (a) data-intensive international research projects in science, technology and innovation analysis to be undertaken more rapidly and effectively; and (b) providing new opportunities for research training of junior researchers and doctoral students. (3) We are also develop a model of collaboration that will be sustainable and scalable, and which can serve as a model for other China-US-UK strategic collaborations, also engaging additional partners.
Collaborator Contribution The other two partners have collaborated similarly through participation in collaborative research projects; exchanges; training; workshops & conferences.
Impact Outcomes from this collaboration include 2010, British Council seed funds; 2012 - involvement of HSE Moscow as an associated partner; 2012 - award of ESRC support for collaborative projects including the ESRC project on Emerging Technologies, Trajectories and Implications of Next Generation Innovation Systems; 2013, Designation of the Co-Lab as Innovation Base (Beijing Municipal Government); 2010-present, student exchanges; Conferences (IM2012, Beijing); Atlanta (2013); Academies (2013, 2014) and 2014 International Summer School on Emerging Technologies (Manchester). Collaboration is multidisciplinary, involving economics, policy, political science, management, information science, innovation studies, and other disciplines.
Start Year 2010
 
Description Manchester Forum on Data Science, Tech Mining and Innovation (November 2013) 
Form Of Engagement Activity Participation in an activity, workshop or similar
Part Of Official Scheme? No
Type Of Presentation workshop facilitator
Geographic Reach International
Primary Audience Professional Practitioners
Results and Impact Workshop stimulated understanding of novel methods for analyzing technological innovation, including through use of bibliometrics and unstructured big data.

Improved recognition of community of scholars and practitioners in the UK and other European countries engaged in data and text mining in science, technology and innovation analysis and policy domains, leading to informal and formal follow-up activities.
Year(s) Of Engagement Activity 2013
 
Description Policy Workshop - Sustaining Growth for Innovative New Enterprises 
Form Of Engagement Activity A formal working group, expert panel or dialogue
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Public/other audiences
Results and Impact Co-organized with the Department of Business, Innovation and Skills (BIS) in London (December 4, 2014), this policy workshop presents the results and implications of the project on Sustaining Growth for Innovative New Enterprises. A Policy Workshop on Sustaining Growth for Innovative Enterprises was held in London on 04 December 2014, co-organized by the Manchester Institute of Innovation Research and the Department of Business, Innovation and Skills (BIS). The workshop presented results and discussed policy implications from the ESRC Project on Sustaining Growth for Innovative Enterprises. Presentations at the workshop were made by Philip Shapira, Abdullah Gök, Marianne Sensier, and Elvira Uyarra. Additional input was provided by Mike Newman (ORE Catapult), Susanne Baker (EEF), Stephen Roper (Warwick University), Mark Franks (BIS) and Alan Harding (University of Liverpool). Other workshop participants were drawn from government, business organizations, research councils, non-profits, and academia. The project is probing differential strategies for SME growth and the role of regional clustering and policy resources in the growth of innovative companies, building on new and unobtrusive methods of web mining to gain timely information about enterprise developmental pathways. Research is focusing on the emerging green goods sector (comprising firms producing outputs that benefit the environment or conserve natural resources) with an international comparative element involving the UK, the US, and China. Papers, background reports, and the workshop presentation materials are available via http://bit.ly/sustaining-innovation. Opportunities for question and answer and open discussion were offered. About 35 people attend the workshop.

We received business and policy follow-up interest in obtaining more information about the results of the project, and will leverage this network to further disseminate information about the project findings to policy, business, and intermediaries.
Year(s) Of Engagement Activity 2014
URL https://sustaininggrowth.eventbrite.co.uk
 
Description Sustaining Growth for Innovative New Enterprises - Academic Workshop 
Form Of Engagement Activity Participation in an activity, workshop or similar
Part Of Official Scheme? No
Type Of Presentation workshop facilitator
Geographic Reach National
Primary Audience Policymakers/politicians
Results and Impact This academic workshop presented new methods of gathering and analysing data on the strategies of innovative technology-oriented enterprises. It presented and built on work undertaken by the Project on Sustaining Growth for Innovative New Enterprises, on related projects in the Manchester-Atlanta-Beijing Innovation Co-Lab, and on contributions by other leading international researchers. Presentation topics: Overview and UK results from the Project on Sustaining Growth for Innovative New Enterprises (Philip Shapira & Marianne Sensier, University of Manchester); Green goods enterprise development in the United States (Jan Youtie, Georgia Tech); Green goods enterprise development in China (Jie Ren, Beijing Institute of Technology); Using unstructured data - web scraping for enterprise strategy analysis (Abdullah Gök, Alec Waterworth, University of Manchester); Using unstructured data - using Twitter to gains science and technology insights (Sanjay Arora, Georgia Institute of Technology).

After this workshop, there was follow-up interest in the methods presented by academics and analysts.
Year(s) Of Engagement Activity 2013
 
Description Sustaining Growth for Innovative New Enterprises - Co-Lab and Project Workshop 
Form Of Engagement Activity Participation in an activity, workshop or similar
Part Of Official Scheme? No
Type Of Presentation workshop facilitator
Geographic Reach International
Primary Audience Postgraduate students
Results and Impact This workshop brought together research team members of the project on Sustaining Growth for Innovative New Enterprises of the Innovation Co-Lab of the University of Manchester, Georgia Institute of Technology, and the Beijing Institute of Technology. On the first day, kick-off plans for the project were discussed and refined, including review of the approach, methods, and workplan. Research presentations were made, including by a panel of junior researchers from the UK, China, and the US. A video conference was held to involve additional Chinese participants. The second day of the workshop included an Open Roundtable with the Sustainable Consumption Institute and discussion of advanced methods of analysis.

After this workshop, there was an improved understanding of green goods manufacturing strategies in the UK, US, China, and elsewhere among the participants; a stronger basis and plan was developed on which to advance the project; and information was shared with a wider set of colleagues at the University of Manchester.
Year(s) Of Engagement Activity 2013