CEEDR has been having an impact on government policy development for small and medium sized enterprises (SMEs) since the early 1990s, particularly with regard to business support and policy, and SME access to finance.
We have worked extensively with the Department for Business, Innovation and Skills (BIS), as well as other central government departments and regional level organisations.
Our work includes both research for policy (for example, into SME attitudes and behaviour) and research of policy (for example, assessments of policy effectiveness and impact).
Our programme of research for BIS has helped reshape the Government's business support offering:
Concerns over SME access to finance increased from 2007, with the onset of the financial crisis. Our research on this topic – which started with a major study on the financial needs of ethnic minority businesses for the British Bankers Association in 2001 – has contributed to the policy discourse in relation to the extent of market failure of various types of finance, and the nature of relationship between entrepreneurs and finance providers.
Access to bank finance
Our study of Scottish SMEs undertaken for the Scottish Government (2007) found little evidence that businesses with strong business cases were being turned down for finance, although there were specific issues relating to the nature of the relationship between SME owner-managers.
Middle-capitalisation (mid-cap) businesses
Our study into the difficulties that mid-cap businesses face in raising Bank Finance (BIS 2010) concluded that these constrained the growth and development of only a relatively small number of successful and moderately performing businesses. The Minister for Business and Enterprise reported these findings in a BIS Press Release (30 December 2010).
Financing high technology SMEs
Study into the impact of the financial crisis on the financing and growth of technology-based small firms in the UK demonstrated a widening funding gap, which underlined the importance of public supported initiatives.
Comparative research in relation to New Zealand (with Professor David Deakins) led to invitations to Professor David North to present at a policy symposium and to the Ministry of Science and Innovation in New Zealand on the growth potential and financing of technology-based SMEs (2011).
Public supported venture capital (VC) initiatives
Our study of the Early Assessment of the Impact of BIS Equity Scheme Initiatives (BIS, 2010) demonstrated both the need for public intervention in the early stage VC market and its beneficial impacts on investee businesses. These results fed into the Coalition Government's decision to extend the Enterprise Capital Fund focused on start-up and early stage investments.
The Early Assessment of the UK Innovation Investment Fund (BIS 2012) indicated UKIIF's role in addressing the current gap in the supply of UK equity finance, unmet by private and institutional VCs. Our findings underlined the continued need for government backed hybrid equity investment to support early stage innovative high growth oriented businesses in sectors such as life sciences with longer term investment requirements.
Dr Rob Baldock and Professor David North's paper based on this research entitled 'The role of UK equity funds in addressing the finance gap facing SMEs with growth potential' was awarded best paper in the finance track at the Institute for Small Business and Entrepreneurship Conference (Dublin 2012), attracting particular interest from academics and practitioners, including the sponsors Allied Irish Banks.