RAKE Project – Anchor institutions and business support

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Anchor institutions and business support – Oliver Mallett, University of Stirling

In 2015 I was awarded Research and Knowledge Exchange (RAKE) funding from ISBE for a study of business support. The research was co-developed with Enterprise Nation, a UK membership organisation that seeks to create a supportive environment for business owners and would-be entrepreneurs and acts as a campaigning voice to help small and medium-sized enterprises (SMEs). By exploring the eclectic mix of influence, support and guidance available to SMEs at a local level, the study sought to understand the role of anchor institutions in supporting SMEs and regional development. In this blog I outline a core element of this study relating to the navigation of business support services and some of the initial findings.

Anchor institutions are regionally embedded organisations that employ large numbers of people, are spatially immobile and have a social purpose, exerting a powerful influence and anchoring function for the sustainability, development and growth of their local economy. Examples of anchor institutions include non-profit organisations such as higher education institutions (HEIs), cultural and religious institutions or military bases but also, potentially, large private sector organisations where a significant part of their identity, resources and social mission are related to their local community.

Anchor institutions’ size and embeddedness in a local economy means that they can impact significantly on SMEs. However, these institutions and their implications for local SME development are poorly understood, especially outside the United States, and discussion has tended to focus on formal HEI activity. The RAKE funding for this project supported the exploration of three alternative forms of anchor institution. The choice of alternatives was generated through the knowledge exchange process and sought to stretch the definition and the potential scope for what can be considered in this category in order to fully explore their potential for SME business support: HEIs; Local Enterprise Partnerships (LEPs); and a national membership organisation (Enterprise Nation, EN).

An important context for understanding these organisations is the rapid expansion of a wide range of business support services, whichhas developed into a significant ‘enterprise industry’. This provision extends from government provision and large-scale organisations such as the Chambers of Commerce, through online services, professional organisations (accountants, solicitors, banking services) to other SMEs offering consultancy services. These arrangements offer a wide variety of services to SMEs but they also pose challenges for those businesses in identifying the services most appropriate for their needs. For example, business support and advice services, like many professional services, are difficult to evaluate prior to consumption.

The potential for confusion that some SMEs might experience when faced with the panoply of services within the enterprise industry suggests a need for central points of contact, where ease of access, trust and other facilities may help to ensure SMEs get the support or advice required. The characteristics of anchor institutions appear to lend themselves to being able to act as a neutral intermediary between different interests and voices in a complex business support marketplace and as a facilitator, emphasising the value of shared learning derived from the open exchange of ideas and experiences. At present anchor institutions are particularly influential appears to principally be where they anchor or orient different forms of external business support or where they offer free or heavily subsidised support.

A good example of the neutral intermediary, anchoring or orientation role are services similar to the recommendation of the 2008 Richard Report for a web-based Business Information Service (likened to ebay) that could act as an impartial gateway to the support services in a marketplace, supported by buyer and seller feedback and ratings. Variations of this marketplace idea have been pursued by all three types of anchor institution included in the study (and others outside of its scope). However, no dominant model has emerged as yet and the interviews conducted in this study did not find any suggestion that this might change. This may in part be due to the difficulties in achieving what business owners perceive as a truly impartial, open service. These types of marketplace are dependent on the quantity and quality of reviews (a topic that led one service provider interviewed to become increasingly frustrated as he recalled his experiences of being reviewed by clients), are never exhaustive (and potentially favour existing partners or types of support) and may come to operate in competition with other marketplace services. As a result, theyrisk distorting existing market provision and could even make accessing support more confusing for SME owners.

When it comes to helping SMEs to maximise the benefits of business support, a key, persistent challenge appears to involve enabling SME owners to effectively identify and engage with relevant, value-adding support services. An alternative approach to online marketplaces or other signposting activities may be helping SME owners to better identify their needs and appropriate sources of support for themselves. This would extend beyond locating or assessing new services to making effective use of existing business services such as accountants and solicitors (which would, in turn, demonstrate the value of external advice and support). The aim would be to equip SME owners as consumers, empowering them to identify the right support for their business so as to ensure that when they do access support they maximise the value from the service they are paying for.

This RAKE-funded project, now in the analysis phase, seeks to better understand the potential roles of anchor institutions in relation to a range of support and advice services for SMEs. Throughout the development and design of the study and the extended period of data collection, both the RAKE-funding and the co-development with Enterprise Nation were particularly helpful and will inform further knowledge exchange as the project moves forwards.

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