Understanding Local Support Systems for SMEs

Dr. Drew Gertner, Professors Monder Ram and Kiran Trehan

Project Aims • Aim 1: Map support system from demand side

– Which organisations and networks are EMBs engaging with for support?

– What factors affect these relations (e.g. proximity)?

– What are the differences in the provision of support in diverse and less diverse cities?

– How has the changing organisational landscape affected who the entrepreneurs go to for support?

• Aim 2: Map support system from supply side

– Inventory of support, types of support provided

A Focus on Ethnic Entrepreneurs

• EMBs make up a large part of local communities and contribute

significantly to the economy

– 1 in 7 of all UK companies (CFE, 2014)

– 60% of the top 25 tech companies in the US were started by

ethnic entrepreneurs (Partnership for a New American Economy,

2014)

• Supply side: If LEPs and other organisations have the objective to

create locally relevant support, they need to know how EMBs utilise

business support

• Demand side: Ethnic entrepreneurs may need help in better

engaging with support providers; implications for business growth

Methods

• Undertaking semi-structured interviews with 60 entrepreneurs

– Non-ethnic control group

• Sectoral approach (high and low-value-added sectors):

– Overethnicisation of migration research whereby non-ethnic interactions are often routinely precluded from the final narrative (Morosanu, 2013)

– IT, Financial and Business Services, Catering/Restaurants, Construction

• Selected 3 diverse and less diverse cities

– Birmingham (55% white), Glasgow (88% white), Norwich (90% white)

Local support systems • Focus on formal organisations (e.g. Chambers etc)

– Local support system is not just formal organisations

• For ethnic entrepreneurs in particular, overemphasis on ethnic relations – Ethnic entrepreneurs are also utilising non-ethnic resources

• Spatiality of support systems not considered; relationship between local and other spatial scales – Support spans various spatial scales – Entrepreneurs utilise knowledge at both the local and global

scale which are related (Bathelt and Cohendet, 2014)

Background

• As a result, approach business support in a relational way

• Utilising relational economic geography

• Concerned primarily with the ways in which socio-spatial relations of actors are intertwined with broader structures and processes of economic change at various geographical scales (Yeung, 2005)

• Allows us to look at relationships between actors, actors and structures and spatial scales Scalar Relationality

Global

Regional

Local

National

Actor-Structure Relationality

Actor

Structure

Actor

Structure

Case Study: Entrepreneur

• Indian

• Male

• Mids 40s

• Moved to UK in 2006 to attend

Norwich Business School

• Previous entrepreneurial experience

XXX

• Indian restaurant

• Started in 2011

• Family business

– Wife, brother,

sister-in-law

Business

XXX

• Diversity of city

– 91% white (Census

2011)

– 9% minority ethnic

group (Census

2011)

Location: Norwich, East Midlands

Complexity of business support usage

“I pretty much did online research about the business in the beginning, what I want to do and what’s there around and what sort of legal requirements I need for the food business”

“I joined a business course which is organised by NWES, it’s a government funded organisation which helps businesses to start. It was a week course and a few things I learned there”

“My wife helped in the beginning to set up the, you know, to come up with the recipe ideas”

“I tried to open the bank account and approach the bank but they couldn’t give me because I didn’t have much reference this or that, anything at all, you know”

“So I asked a friend in India who then lent me money initially because it was based on trust so I got the funding from them”

Simultaneous use of formal and informal organisations and actors

Local ecosystem is not just formal organisations but simultaneous use of formal and informal organisations.

Use of ethnic vs. non-ethnic contacts

Local ecosystem for ethnic entrepreneurs is not just ethnic support, non-ethnic contacts are also important! In a city, such as Norwich, with a lower concentration of ethnic minorities, non-ethnic formal support becomes even more important!

“I would definitely say local support English people’s support was stronger than the Indian community support…Because, as I said, in Norwich Indian population actually is very, very low”

Relationship between local and non-local scales

Local: - Validation of

ideas - Regulations - Markets - Ways of doing

things - Labour market Global: - Idea/opportunit

ies - Innovation - Funding

Local support/knowledge (Regulations) “You do not ask people what cleaning materials should be used for cleaning in India. So it matters, local knowledge and local laws is important. You have to engage with the local friends and family only for certain advice”

Non-local support/knowledge (Ideas) “What I’ve done is, when I see a similar vegetarian restaurant in London, for example, I like try my best to go to and visit those restaurants and see what do they do, how do they do it? Or how we are different, you know, what can we learn from them?... London in particular is a very good point of contact or a city of observation for me”

Entrepreneurs are utilising both local and global knowledge.

• Continue data collection and analysis

• Focus on unpacking underpinning factors that affect relations

Next Steps

Understanding Local Support Systems for SMEs

Dr. Drew Gertner, Professors Monder Ram and Kiran Trehan