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Empowering untapped SME growth potential: Edge Hill University’s unique success story
Real impact for people and places: growth, jobs and innovation
May 2023 marks five years of the SME Productivity & Innovation Centre (SME PIC), based at Edge Hill University, supporting scale-up potential SMEs across the region, helping them transform into high-growth, high-productivity businesses. The Innovation Sprint Programme has been the Centre’s flagship initiative during that time and has transformed Edge Hill into a leading force for empowering previously untapped SME growth potential. This project is part-funded by the European Regional Development Fund.
Steve McArdle – Business Development Manager, Prof. Simon Bolton – Director, Michael Banford Associate Director, SME Productivity & Innovation Centre
Converting policy into practice: a driving force towards levelling up
The SME PIC is focused on supporting business leaders to become ‘productivity literate’. Improving business productivity is intrinsic to economic growth and the UK’s productivity woes are well documented. Recent estimates put the UK 13% behind the G7 average and nationally the disparities between the South East versus other regions are highly pronounced. The North West urgently needs to improve its density of productive businesses and close the overall productivity gap, which in turn creates good jobs, develops a skilled workforce and helps retain workers.
Scaling-up pushes a business into a period of high growth through the more effective use, allocation and tracking of resources, and understanding productivity performance is a vital part of the process. The effectiveness of management practices in SMEs accounts for around 55% of the total factor productivity gap (LSE, 2020) and research from the Institute of Directors estimates that 60% of SMEs also don’t have any formal mechanisms to monitor their own productivity. So, when business leaders find themselves consistently reacting to operational issues, they become highly vulnerable to even the most modest external customer or market disruptions such as: the loss of a key customer; the stagnation or drop-off of
new sales; new technologies which can replicate their services faster and cheaper or key staff exiting to join competitors.
Building trust and collaboration: enabling growth mind-sets in SMEs
To tackle this the SME PIC helps SMEs to develop, adopt and embed data-driven management practices which help them ‘identify’ and ‘seize’ opportunities. All businesses have data, but few use it in ways that allow them to effectively tackle their productivity and growth challenges. Asking critical productivity questions can have an almost immediate impact on revenue and profitability giving the business far greater understanding and confidence to invest in jobs, people and new technologies.
The economic importance of scale-ups
Scale-up SMEs generate over £1.2trn for the economy, which is over 50% of the total revenue generated by all SMEs in the UK, but only 0.6% of the SME population are scale-ups.
Scale-ups also employ three million people and offer apprenticeships and graduate jobs at twice the rate of other firms and they have higher rates of technology adoption and innovation.
Supporting high value start-ups, the ‘unicorns’ and ‘gazelles’, is an important component of any regional economy, but these are rare breeds, and the engine of growth lies in the depths of the growth potential within the established, family and owner-managed businesses. To date, Edge Hill’s SME Growth Observatory has identified more than 9,000 Lancashire SMEs which exhibit the conditions and behaviours for strong scale-up potential.
The continued challenge: investing for impact
The continued challenge for the SME PIC, regional policy makers, and the new UK Shared Prosperity Fund is to keep engaging these businesses with relevant, compelling, impact-driven offers of support which challenge mind-sets, practices and performance.
Edge Hill University's SME PIC stands out as a beacon of expertise in engaging with scale-up potential SMEs. Through tailored solutions, building trust, and a deep understanding of their unique challenges, Edge Hill has successfully unlocked the potential of many businesses. By driving growth and productivity, Edge Hill University plays a pivotal role in fostering inclusive economic development and ensuring that no SME is left behind.
Driving performance and growth in established SMEs
Get in touch for more information about the SME Productivity & Innovation Centre:
pic@edgehill.ac.uk
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