EXPRESIÓN DE PROTEÍNAS

A good starting point here is the stated aims of the Enterprise Directorate within the UK Department for Business, Innovation and Skills (2011) for boosting enterprise, start-ups and small business growth by helping small and medium businesses to start and thrive through:

improved access to finance

a more positive business environment which supports growth and ease of starting a business, and where new businesses and economic opportunities are more evenly shared between regions and industries

a major programme to reform the way that people running a business get the information, guidance and support they need to start and grow a business

building a more entrepreneurial culture, equipping people with the skills and ambition to start a business.⁴¹

The implications of the findings of this study for the above policies, especially in the recovery period as the recession slowly recedes, are:

5.6.1.1 Improved access to finance

The aim here is for more UK entrepreneurs and businesses, both start-ups and those wishing to grow, to be able to access the finance needed to enable greater levels of enterprise and innovative activities. Current UK Government initiatives include:

the Enterprise Finance Guarantee Scheme, a Government-guaranteed scheme that facilitates additional commercial lending to viable SMEs unable to obtain a normal commercial loan because they have insufficient security

the National Loan Guarantee / Funding for Lending scheme designed to reduce the cost of term loans, hire purchase agreements and lease agreements

41For completeness, there is a fifth aim: recognising and celebrating successful business through the Queen’s Award for Enterprise.

a proposed ‘Business Bank’ that would offer longer-term loans with a maturity of about 10 years that small businesses find hard to secure from high-street banks a mix of Government and private equity funds to fill in the ‘equity gap’ between

£1m and £5m, where firms require more than Business Angels will lend but less than is usually of interest to Venture Capital funds.

The finding that older firms are more adaptable and that adaptability assists in longer-term survival, possibly more than maximising profitability, suggests that the effective application of funding requires a greater engagement with, and understanding of, the firm rather than a reliance on computer models or well-crafted business plans. Lending against or investing in a plan that maximises profits at the expense of adaptability might be more risky than it seems, especially in a recession where profitability can slip away very fast, and the flexibility to accommodate unexpected changes in demand (above or below forecast) and unanticipated disturbances in the supply chain and cash flow is a valuable attribute for survival.

An excellent, even professionally written, business plan designed to secure bank lending may also be a worse risk than it seems if execution of the plan requires substantial internal adaptation to make it work and the firm has no real propensity to manage such a transition.

One well-established firm making electronic component assemblies that participated in the initial quasi-structured interviews on the survey pilot had excellent bank support for a change management process designed to reduce production cycle time. The owner, an accountant by training, was unable to get the long-established 25 man production department to implement the desired change, despite taking on a specialist to make it happen, and was increasingly unable to service the debt on his loan. By contrast, another firm interviewed that had been trading for 18 months making and selling new health food supplements, was unable to secure any bank or equity-gap financing despite the management team having a track record in business and a track record of rapid adaptation to market demand and product feedback, and despite having pre-orders for a range of innovative new products including a ‘vitality water’.

As the results also suggest that the entrepreneurship of the senior management team is one of the keys to adaptability and longevity, lenders might do well to insist that a business shows by whatever feasible and credible means possible that the owner and senior managers

have the staying power and track record to make the plan a success. This might be along the lines of the funding criteria of the Venture Capital community, where five of the top ten most important criteria have to do with the experience of the entrepreneur/Chief Executive Officer and the management team (Macmillan, Siegal and Narashima 1985). This approach may result in better justification for funding or for the refusal of funds and may make any investment, loans or equity, more secure through a greater probability of survival of the firm.

The research results also indicate that the willingness of the senior management team to take external advice is related to higher adaptability. This author’s ethnographic experience of some 500 SMEs is that firms seek advice either when in trouble or when they have very specific issues (often human resources or accounting issue) to deal with, but they do not typically have non-executive directors. The research suggests that lenders might insist for everyone’s benefit that the firms they finance take on a non-executive director. The UK Corporate Governance Code positively recommends that a smaller company should have a least two independent non-executive directors, although SMEs have no obligation to appoint them.

The finding from the recession survey that factors other than adaptability, notably cash-flow management, contribute more strongly to survival than in non-recessionary times supports the need for longer-term sources of finance so that sound businesses can better manage very short-term cash flow issues. Bank lending is by far the largest source of external finance currently used by businesses in the UK and the research supports the potential for longer-term loans with a maturity of 10 years or more that small businesses find very hard to source. Such financing has served well the Mittlestand, the small and medium-size companies in Germany, Austria and Switzerland, and its wider availability might help UK companies become more innovative and adaptable and so improve the chance of longer-term survival during which loans get repaid.

5.6.1.2 More positive business environment (better regulation for SMEs)

This policy is all about building a more positive business environment, making it easier to start a business and share economic opportunities more evenly between regions and

industries. Specifically, the aim is to make new regulations as small business friendly as possible to allow successful compliance. The current ‘red tape challenge’ campaign is asking businesses to say which regulations are working and which are not; what should be scrapped, what should be saved and what should be simplified.

The findings of this research have little to contribute to policies making it easier to start a business, as business start-ups and firms in their first year of trading were specifically excluded from the analysis. For the ‘red-tape challenge’, the findings here also have little to contribute other than the observation that what may be a burden for one firm may be reasonable corporate social behaviour for another, based on path-dependent preferences for compliance.

The policy of wishing to share economic opportunities more evenly between regions and industries is being implemented through the channeling of development money through Local Enterprise Partnerships – joint local authority-business bodies brought forward by local authorities themselves to promote local economic development and replacing the Regional Development Agencies. The finding of this study, that industrial change evolves through the mix of firm level adaptation and population level selection, serves as a reminder to development agencies that business deaths are as much part of the industrial landscape as business births. Progress comes from improving the balance of births over deaths so development effort is need both to encourage new business and help existing businesses improve their adaptability for longevity. Some of the funding aimed at supporting innovation and growth activities might well be spent encouraging and supporting the effective implementation of innovations as well as the generation of new ideas themselves.

5.6.1.3 Better and more targeted business support

The twin tracks of policy here are support through the online Business Link facility and the successor mentoring and coaching agencies as well as support from the Local Enterprise Partnerships. In particular, resources are aimed through the GrowthAccelerator programme, providing personalised support for high growth businesses that have the potential to achieve 20 per cent growth year on year, and through Mentorsme, a resource designed to provide mentoring services to SMEs.

The finding that adaptability and survival are related to both the willingness to take external advice and the associated willingness of senior managers to do things differently (but not with the number of senior managers brought in from other firms in the past 5 years) suggests that Government policy to encourage the use of external advice and guidance is likely to prove beneficial. The GrowthAccelerator programme, however, is focusing its efforts only on the estimated 26,000 companies in England that the Government says have genuine potential for rapid and sustainable growth, a small percentage of the millions of the country’s registered businesses. The limiting eligibility criterion of ‘high growth’ for direct support, however, may be very limiting if high growth also means high risk and does not imply greater survivability, as indicated by the research findings. Indeed, any innovation

‘premium’ may well be wiped out by the potential liability of newness in a firm. Older firms with larger revenues will find it statistically more challenging to demonstrate the potential for 20 per cent year on year revenue growth than younger firms or recently started firms.

There seems no reason why innovative activities designed to substantially reduce costs or refresh product lines that keep an existing firm and its associated employment in steady, profitable existence should not equally be eligible for sponsored advice.

For the Business Link website and national contact centre and for other government-sponsored advice and mentoring, the finding that firms have different and internally conflicting propensities to act suggests that standard text-book advice might sometimes do more harm than good. It may be worth making a sharper distinction between the mere presentation of business information, advice and guidance without some sort of health warning and advice that helps a firm think through the consequences of any actions based on the real ‘handedness’ of the firm for action in order to make better strategic trade-offs.

Where BusinessLink East had previously asked firms about the benefits of accessing online advice (other than for a very specific issue) without Business Advisor support, many felt they lacked the skills to translate the information they were reading into practical action for their particular circumstances.

This author has experience of nine firms referred to the Manufacturing Advisory Service (MAS), funded by the Department for Business, Innovation and Skills, that provides initially grant-funded advice on streamlining processes, energy efficiency and general business improvements. In four cases, their advice was implemented and had a significant

impact on process times and costs (frame-making procedures, waste product reductions, sourcing and supply chain efficiencies and faster new product development). In the remaining five cases, however, the companies involved were not able to implement many or, in two cases, any of the technically appropriate and seemingly sound advice they were given. In one case, a small commercial bakery was unable to implement the process and procedure changes recommended simply because they had no processes at all for making such wholesale change. The advice from MAS, while comprehensive and relevant, did not address the implementability of the recommendations, or even recommend prioritized actions (in this case, better order quantity management and product line profitability analysis to assess a product's contribution to the bottom line) or suggest how at least these key actions could actually be put into practice. Similarly, a joinery firm fully accepted the benefits of re-organising their layout and stock-control so that work would flow faster and more cost-effectively, but found staff so resistant to change that the short-term risks to the business of making the change were perceived to outweigh the longer-term benefits and the plans were abandoned.

Without stretching biological analogies too far, just as the goal of pharmacogenetics is to maximise drug effectiveness while limiting drug toxicity based on an individual's DNA (broadly genotyping individuals so that genetic information can guide drug therapy decisions), so businesses may one day benefit more profitably from advice based on their own broad routine dispositions and preferences.

The research findings also have applications for the ‘skills agenda’ – the efforts to address the lack of basic skills among a large proportion of the UK workforce in comparison to other EU countries. The findings show that congruence of routines can assist adaptability and survivability and make the implementation of innovation more effective and efficient. If a non-linear rather than traditional, deterministic approach to innovation is beneficial, it is likely to be even more effective if the associated routine changes are also kept congruent.

New technologies and the implementation of those technologies need staff in all areas of the firm to be trained to make them work and the research hints at the beneficial effects of new in-house, firm-specific skills development that ensures all the routines in all the constituent areas of the firm remain congruent and up to speed.