New business creation and economic development: a comparative analysis of the role of brokers in linking entrepreneurs to regional innovation systems

It is widely recognised that entrepreneurship contributes to economic growth and new employment opportunities. Since David Birch's work in the late 1970s it has been accepted that the majority of new jobs are generated by small firms. Therefore, it is important to understand the impact of public sector funding and policy initiatives on the creation of new businesses and the growth of existing small firms. This research will examine this issue from both 'supply' and 'demand' perspectives. First, the intention is to focus on the nature of regional policy initiatives which provide support and brokerage services to encourage entrepreneurship and promote growth in established small firms. Second, the research will explore the challenges and difficulties that face entrepreneurs (especially graduates) and owner-managers in accessing resources from regional policy and funding initiatives. Hence, the research will be concerned to evaluate the extent to which regional policy is effective in promoting entrepreneurship and small firm growth.

The work will have a comparative focus by comparing a number of city-regions in the UK and elsewhere in Europe. First, in the UK, the focus will be on Greater Merseyside in the Northwest which has achieved significant levels of regeneration since Liverpool became the European City Culture in 2008. There are, however, still areas of very high deprivation and the region is also notable for having low levels of business start-ups despite being the recipient of considerable amounts of European funding over the last 15 years. Second, the Leeds city-region in Yorkshire has had relatively higher levels of business start ups in a range of sectors although it has suffered during the recession along with other cities in northern England. On the continent, interviews will be carried out with EU officials and other relevant stakeholders in Brussels to analyse the ways in which European small firm and entrepreneurship policy is developed. In addition, a range of other case study regions will be studied; these include Wallonia, Belgium, which is a region that has undergone significant deindustrialisation since the 1960s but has received considerable European and domestic funding to try to encourage small firm entrepreneurship and innovation. Lombardy, northern Italy, on the other hand, is a dynamic region which performs consistently well on European innovation rankings even though in recent years the Italian economy has been in recession.

This work will adopt an interdisciplinary approach by combining ideas from human geography, regional development and theories associated with entrepreneurship and the dynamics of SMEs. In carrying out the research it is intended to adopt a 'mixed methods' approach including critical discourse analysis of academic and policy documents; the analysis of secondary data (including ONS and Eurostat) and interviews with key actors within each of the city-regions. Those actors will include leading policy-makers as well as entrepreneurs and small firm owner-managers.

In summary, this research will open-up the 'black-box' of regional development by adopting a comparative approach and by the collection of both quantitative and qualitative data. We are particularly interested to evaluate the role of those who act as 'brokers' between policy-makers and the small business communities. Existing studies of regional development are generally based on the analysis of econometric data which provide information of the outcomes but have little to say about the processes associated with policy interventions and particularly the ways in which entrepreneurs engage with and benefit (or not) from public sector support. Also, the comparative nature of the research means that the findings will be of interest to academics and policy makers alike.

The focus of this research is on the small firm sector which is considered to be the bedrock of the European economy and a key driver of growth, jobs and innovation. How to encourage the growth of small firms and enhance entrepreneurship in order to promote economic development, especially in Europe, has become one of the main questions for both policy makers and academics in recent years. This has led to a new policy paradigm in which there is increased focus on public support to assist small firms and a range of measures have been introduced including skilled brokers providing advice on a range of issues, including access to finance and technology; networking; developing new markets etc. Providing the right mix of funding and support for small firms is, however, far from easy and it is apparent that the success of such initiatives has been mixed, especially in less developed regions and more socially deprived localities across Europe. This research, therefore, aims to understand better the dynamics and linkages between the range of public sector funding and policy initiatives to encourage entrepreneurship and small firms in the UK and elsewhere in the EU.

The inter-disciplinary and comparative nature of the research means that the findings will be of interest to range of beneficiaries in the UK and the EU. First, it will be relevant to policy makers, practitioners and politicians from the local, regional, national and European levels who want to explore ways to refine the policy process and improve the ways in which support is delivered and implemented. Secondly, the findings will also be relevant to entrepreneurs and small firm owner-managers who have benefitted (or not) from public sector support schemes; this dimension is important in order to try to tailor better the initiatives to meet the actual needs of entrepreneurs (especially graduates). Thirdly, a range of intermediary organisations that provide services to entrepreneurs and small firms will be interested in the findings including venture capitalists, brokers, consultancy companies and business associations. This group of actors performs a key role in linking public sector support to the small firm and entrepreneurial communities.

Beneficiaries will be targeted in a number of ways. First, the Fellow has professional experience as a practitioner and understands clearly how to provide useful and relevant material for a range of stakeholders. Thus, along with academic publications, a range of outputs will be produced containing the key messages from the research, in accessible plain English targeted at policy makers and other beneficiaries. Second, the findings will be disseminated through presentations at a number of practitioner-led conferences and events, the aim being to obtain feedback to inform further aspects of the research. Third, a key element of the research is to bring together some of the key actors in the respective case study regions to facilitate an exchange of good practice in the field; this will be done with the assistance of colleagues in the Management School in order to help to organise effective user engagement.

Maximising the involvement of a range of beneficiaries in the research is a key priority in order to increase the policy relevance and impact of the findings. The Fellow will build upon the capacity and expertise of the Management School at Liverpool in order to access the wide-range of existing networks and contacts that colleagues have in order to ensure that the impact of the research can be enhanced.