http://www.nwda.co.uk/pdf/NorthwestEnterpriseStrategy by Northwest Regional Development Agency

Northwest Enterprise Strategy

June 2008

Contents

1.0 Purpose of the Strategy

2.0 Policy and Context

3.0 Evidence Base

Key data

Enterprising People • Enterprise Culture and Skills • Underperforming Groups: women, BME, age groups, disabled

Enterprising Business • Start-up and Development • Growth Potential Businesses • Mature/Exiting Companies

Enterprising Places • Regional Spatial Differences • Underperforming Areas • Areas of Improvement • Rural

4.0 The Strategy and Action Plan

5.0 Monitoring and Evaluation

Appendices • Appendix 1 - Summary Action Plan • Appendix 2 - Supporting Policies and Actions • Appendix 3 - Public Sector Support for Enterprise • Appendix 4 - Glossary

Overview

The 2006 Regional Economic Strategy (RES) identified Enterprise as a Key Factor which included actions: to promote enterprise as a career choice, business start-up and survival (high growth, disadvantaged groups and areas, and social enterprises) and to provide business support for priority sectors, high growth and medium sized businesses and those in the rural economy. In general, enterprise has continued to rise in importance at European, national, regional and sub-regional policy levels. The last five years have seen the Northwest make some gradual improvements against key enterprise performance indicators (e.g. GEM1 Survey results). However, there remains a long way to go until the region reaches business density levels which will significantly reduce its productivity gap. The Northwest remains in the bottom two or three regions on most measures of start-up performance. The region needs another 91,000 VAT registered businesses/ self-employed to be at the national average. Compared to a national average per 10,000 adults, the number of VAT registered business start-ups in 2006 was 32 in the Northwest, 39 in England, and the stock of businesses (i.e. total number of businesses in 2007) was 336 against 407.2 The number of people expecting to start a business in the next 3 years is 6.6% in the Northwest compared to 7.4% nationally.3 Therefore the region, collectively, must act decisively to improve enterprise performance. This Strategy has been developed under the three themes of Enterprising: People, Business and Places. A set of priority actions, which summarise existing projects as well as new initiatives, is identified for each theme in Appendix 1.

1 Global Entrepreneurship Monitor, 2007 2 BERR Business Statistics, 2007 3 Global Entrepreneurship Monitor, 2007

Enterprise in the context of this Strategy is not just about starting or growing a business, although this is clearly very important. Being enterprising is the ability of individuals and businesses to respond positively to change, to take risks, be competitive, innovative, creative and proactive, and to generate and implement new ideas and ways of doing things. In order to improve enterprise performance in the Northwest the region must develop a life-long enterprise culture to realise its potential. Central to the development of a strong enterprise culture are enterprising people who create enterprising businesses and enterprising places. The vision for the Northwest to 2026 is for a region of: ‘People Who CAN and DO’. This leads to personal ambition and achievement, to innovative and productive businesses and results in regional prosperity. To achieve this vision the Northwest needs to: • stimulate a positive culture of enterprise and a lifelong enterprise journey • support a growing supply of entrepreneurs • maximise the competitiveness of existing businesses Achieving the objectives of this Strategy will be the result of actions by many entrepreneurs with business support often provided by the private sector. Therefore, the focus of this Strategy is to provide a framework for enterprise development in the Northwest which ensures that public sector investment provides a supportive environment and is tailored to meet the needs of, and is accessible by, businesses, individuals and communities to contribute towards filling the Northwest’s £14 billion productivity gap.

1.0 Purpose of the Strategy

The following section explains the purpose of the Strategy, its scope and its aims. 1.1. The Northwest needs to significantly improve its enterprise performance in order to become a more productive and prosperous region. Enterprise has a critical role to play in a dynamic and flexible economy. New enterprises drive productivity by exploiting new markets and challenge established firms to innovate and invest. Enterprise also plays an important role in generating employment and fostering social cohesion. 1.2. This Strategy has deliberately taken a broad view of enterprise. People are the driving force behind new businesses, the growth of existing businesses and their innovation. Being enterprising, however, is not just about starting or growing a business. It is the enterprising behaviours of individuals, and through them businesses, to respond positively to change and to generate and implement new ideas and innovative ways of doing things. 1.3. The purpose of this Strategy is to provide a framework for enterprise development in the Northwest; the overarching aim being to ensure that public sector support in the region is tailored to meet the needs of, and is accessible by, businesses, individuals and communities. Inevitably, a strategy entails making tough choices on where to prioritise resources to achieve key objectives. Each section of the document concludes with a policy theme which is taken forward in the Strategy and the Action Plan (Section 4 and Appendix 1).

1.4. Since the autumn of 2007 the Northwest Regional Development Agency has been working with stakeholders to review the region’s approach to enterprise and to develop and obtain feedback on the Strategy. The Northwest Enterprise Strategy has been developed in parallel with the Government’s National Enterprise Strategy and various sub-regional strategies in order to align all approaches with the region’s needs. 1.5. The main aims of the Strategy are to: • develop and ensure that individuals have the right attitudes and skills to be enterprising • improve individuals’ and businesses’ access to enterprise support, as well as simplifying that business support and tailoring it to their needs • prioritise the types of business that need to be supported by the public sector • provide a clear rationale for the allocation of public sector resources to support the growth of enterprise • provide a framework for co-ordinated action and delivery, and provide measures to monitor performance • increase the understanding of the region’s challenges and opportunities when it comes to enterprise • influence national government policies to overcome barriers to enterprise

2.0 Policy and Context

Various levels of policy provide the context to, and have helped inform, the development of the Northwest Enterprise Strategy. Enterprise Strategy The Lisbon Agenda

European

National

Business Environment (Regulation, Taxation, Budget etc)

2008 National Enterprise Strategy

Sub National Review and Business Support Simplification

Regional

2006 Northwest Regional Economic Strategy

2008 Northwest Enterprise Strategy

Related Strategies (Access to Finance, Science; Innovation etc)

City Regions Strategies

Sub-regional Enterprise Strategies

Sub-regional Action Plans/Multi Area Agreements (MAAs)

LEGI/URC Programmes

Local economic development plans

Local Government White Paper and Local Area Agreements (LAAs)

Sub-regional

Local

European Policy Context 2.1 The updated Lisbon Agenda (2005) has the overriding goal to make the EU the most dynamic and competitive knowledge-based economy in the world and has two broad aims: to generate stronger, sustainable economic growth and to create more and better jobs. The Lisbon Agenda puts an increased emphasis on developing competitiveness through innovation and knowledgeintensive activities. The Northwest has an ERDF Operational Programme (2007-2013) of over £500 million to support the delivery of these objectives, including actions on enterprise. UK Policy Context 2.2 The Government 2008 Enterprise Strategy 4 highlighted that “unlocking talent – enterprise talent – for people from all sections of society and in our small businesses, helping them to grow, is where the UK’s long term prosperity is going to reside.” The Strategy provides the Government’s renewed enterprise vision to make the UK the most enterprising economy in the world and the best place to start and grow a business. The report develops the Government’s five enterprise drivers of productivity 5 through five enterprise enablers (see diagram page 6). The Strategy emphasises the need for business competitiveness to be able to respond to, and seize opportunities from, globalisation. 4 Enterprise: ‘Unlocking the UK’s talent’ (2008) (www.hm-treasury.gov.uk) 5 Lisbon Strategy for Jobs and Growth, UK National Reform Programme (2005)

2.3 The Northwest Enterprise Strategy focuses on the first two enablers; there being a separate regional access to finance strategy, and an innovation strategy in development. The regulatory framework is primarily a matter for Government but the region needs to influence national policy where it impacts on regional business performance. 2.4 Government Policy also seeks to simplify the types of business support to be publicly funded, including enterprise, and how that support is co-ordinated, procured and delivered. This includes the Business Support Simplification Programme (BSSP) (www.berr.gov.uk) which aims to simplify individuals’ and businesses’ access to business support, and the Sub National Review of Economic Development and Regeneration (SNR) which aims to ensure that delivery is at the most appropriate spatial level (www.hm-treasury.gov.uk). These policy developments are not yet finalised but the principles of how they might be applied to the delivery of this Strategy are covered in paragraph 4.11.

Enterprise Enablers and Productivity

Drivers of Productivity

Enablers of Enterprise

Skills

Culture

Innovation

Knowledge and Skills

Wider

C C

Productivity

is driven by

ENTERPRISE

is enabled by

Access to Finance

Competition

Business Innovation

Investment

Regulatory Framework

Benefits

2006 Regional Economic Strategy (RES) 2.5 Enterprise is identified as a Key Factor in the RES and a number of key actions are identified: • developing an enterprise culture • developing enterprise skills • the provision of start-up support • a focus on providing business support to businesses in key sectors, medium sized and other growth potential businesses • innovation (products and services, process and markets) 2.6 Enterprise features strongly in each of the five subregional action plans which are produced annually by the five Sub-Regional Partnership (SRPs) areas. Cheshire and Warrington have produced, and Greater Manchester, Lancashire, Merseyside and Cumbria are in the process of developing, enterprise strategies. All sub-regions have specific localities in their area which are underperforming in relation to enterprise (see paragraph 3.65). Even in Cheshire and Warrington, which is recognised as a high performing sub-region, there is still a need to address low enterprise levels in communities which are masked by surrounding high performing areas. Local Authorities are currently developing Local/Multi Area Agreements (LAAs/MAAs) many of which include performance targets for enterprise. 2.7 Enterprise is highlighted as a key driver by all three City Regions: Central Lancashire, Liverpool and Manchester. The City Regional Action Plans include: improvements

in the co-ordination of start-up support, more support for young people to develop entrepreneurial skills, and the need to improve the enterprise culture in underperforming areas. Policy Direction 2.8 Over the last 50 years of economic development, policy direction has moved from individual business support (e.g. grants, relocation, advice, trade support, etc) to addressing externalities outside of the business’ direct control (e.g. skills, cluster development, supply chain management) to latterly considering the ‘people’ aspect of businesses (e.g. leadership and management, mentoring, enterprise culture, etc). These policy themes are synthesised in Section 3 of this Strategy to provide a holistic approach to enterprise. The people dimension of enterprise is seen as the backbone to the Northwest Enterprise Strategy, which is being developed under three themes of people, business and places. This is logical as businesses (especially knowledge-based) and places (i.e. communities) exist around groupings of, and interactions between, people, their norms and (enterprise) culture.

Policy Theme This Strategy needs to be developed in the context of EU/National policy but prioritised according to the specific needs of the region, recognising the wide variety of challenges and opportunities in each locality.

3.0 Evidence

The following section provides key data related to the overall enterprise performance of the Northwest. A considerable analysis of these issues was undertaken in preparation of the 2006 RES (www.nwda.co.uk). The remainder of this section provides evidence relating to the three main themes of people, business and places. Key Data Key business start-up and survival statistics National

Northwest

Cheshire

Cumbria

Manchester Merseyside Lancashire

Expect to start a business in 3 years (%) (2007)6

7.4(A)

6.6

8.1

6.6

6.7

5.2

6.5

Total entrepreneurial activity (TEA) (%) (2007)7

5.6(A)

5.4

7.1

4.8

5.2

5.4

4.4

Start-ups (VAT registrations, 2006)8

159,315(B)

17,920

2,310

1,280

7,295

2,550

2,925

Survival rates (% start-ups surviving 36 months) (2002)9

71(B)

Start of Year Business Stock, 2007 (per 10,000 adults)10

407(B)

336

443

457

332

233

366

Self-employed (% of employment) 13.2(B) (Jan 2006 – Dec 2006)11

11.6

12.9

14.7

11.1

10.1

11.7

GVA per head £ (productivity) (2005)12

£15,571

£19,367

£13,491

£16,546

£12,784

£14,568

£18,267(B)

(A) UK (B) England

3.1 The Northwest has a low business density: the region’s stock of VAT registered business per 10,000 adults is 18% below the England average and only the North East has a lower density of businesses. The Northwest needs another 91,000 people to start new VAT registered businesses (38,000) or become selfemployed (53,000) to reach the national average. 3.2 In 2006 the Northwest start-up rate per 10,000 adults was also 18% below the English average at 32 against 39, making it the third worst performing region of England and the gap is widening on the national business density rate. 3.3 GVA per head in the Northwest still lags behind English average at £16,234 against £19,082.13 However, GVA per head in the Northwest between 2004 and 2006 increased by 8.3% which is 1.2% above the national GVA growth rate.

6 Global Entrepreneurship Monitor (GEM) 2007. 7 Global Entrepreneurship Monitor (GEM) 2007. TEA is total early stage (less than 3.5 years) entrepreneurial activity 8 BERR Business Statistics 2006 9 BERR Business Statistics 2006 10 BERR Business Statistics 2007

3.4 The Northwest’s TEA14 has risen close to the national average; 5.4% compared to 5.6%. This is a significant increase from 4.3% in 2002 but there are considerable sub-regional variations. Cheshire has seen the highest increase at 7.1% in 2007 from 4.9% in 2006; followed by Merseyside at 5.4% from 4.7% and Cumbria at 4.8% from 4.1%. Lancashire increased from 4.2% to 4.4%; whilst TEA in Greater Manchester decreased from 5.7% to 5.2%. 3.5 The number of VAT registrations in the Northwest peaked in 2003 but has declined marginally over the last three years consecutively mirroring national trends. The only sub-regions to have experienced growth in the number of business start-ups are Cumbria and Manchester. The remainder have either remained static or declined. VAT registrations should only be treated as an indicator of start-ups as many new businesses do not need to be registered.

11 12 13 14

Annual Population Survey 2006 ONS, 2004 ONS, 2006 Global Entrepreneurship Monitor (GEM) 2007. TEA is total early stage (less than 3.5 years) entrepreneurial activity

VAT registrations in the Northwest15 2002

2003

2004

2005

2006

2007

Northwest

17,385

19,005

18,080

17,940

17,920

not available

Cheshire

2,195

2,340

2,245

2,310

not available

Cumbria

1,310

1,535

1,260

1,245

1,280

not available

Manchester

6,985

7,315

7,090

7,165

7,295

not available

Lancashire

3,020

3,405

3,175

3,030

2,925

not available

Merseyside

2,435

2,805

2,695

2,655

2,550

not available

Northwest Start of Year Business Stock16 (per 10,000 adults)

not available 315

320

324

330

336

3.6 The 3 year survival rate of new business start-ups in the Northwest has improved significantly in recent years matching the national average of 71% in 2006. Greater Manchester, however, still lags behind other sub-regions in the Northwest and is below the national average.

15 BERR Business Statistics, 2006 16 BERR Business Statistics, 2007

Lancashire

Policy theme The Northwest is in the bottom two or three regions on most measures of enterprise performance. Over the last 5 years there have been improvements against some indicators but there remains a long way to go to perform to levels which will significantly reduce the regionâ&#x20AC;&#x2122;s productivity gap.

Enterprising People

Enterprise Culture and Skills This section focuses on stimulating enterprising behaviours in individuals throughout their lives as a key driver of setting up new businesses and in developing innovative management and workforce in existing businesses. 3.7 The Government Enterprise Strategy emphasises the need to raise awareness of, and to promote, an enterprise culture. Being enterprising brings personal ambition and fulfilment but with the critical side effect of regional prosperity. The background causes to, and influences on, the region’s enterprise culture are complex and deeprooted from a legacy of manufacturing and employment in large firms, and are reflected in the norms and values of each individual, business and community. The Northwest has a weak enterprise culture which is reflected in: • Low levels of entrepreneurship i.e. low start-up rates • Low levels of innovation hampering improvements in business productivity and growth • High levels of economic inactivity and concentrated areas of disadvantage 3.8 The 2007 GEM survey highlights individuals’ perceptions of their entrepreneurial ambitions which shows that the Northwest lags behind national comparisons and that there are significant sub-regional variations: Attitudes and perceptions of entrepreneurship by sub-region (% of working age adults) Cheshire

Cumbria

Greater

Lancashire

Merseyside

Northwest

Expect to start up in next 3 years

8.1

6.6

6.7

6.5

5.2

6.6

7.4

Know an entrepreneur?

25.0

27.0

24.2

25.9

19.0

23.8

25.7

See good start up opportunities?

22.6

27.6

37.0

36.1

32.6

36.7

39.1

Have the skills to start a business?

54.5

48.7

45.8

45.1

45.8

47.5

48.5

Fear of failure prevents start up?

34.0

30.7

39.6

33.0

30.7

35.0

35.8

3.9 Creating a strong enterprise culture requires developing an enterprise capability which necessitates the development of both enterprise skills and aptitudes. The Smith Institute (Enterprise for All, 2007) suggests that the following capabilities can be nurtured: • Knowledge and understanding of concepts: organisation; innovation; risk; change • Skills: decision making; personal and social; leadership; risk management; presentation • Attitudes: self-reliance; open-mindedness; respect for evidence; pragmatism; commitment to making a difference • Qualities: adaptability; perseverance; determination; flexibility; creativeness; improvisation; confidence; initiative; self-confidence; autonomy; actionorientation 3.10 The Agency with partners undertook original research (Rising to the Enterprise Challenge 2007 www.nwda.co.uk/enterprise) to better understand these enterprise cultural issues. This included a survey of individuals’ beliefs, approaches and activities at each stage of their personal enterprise journey:

awareness p aspirations p attitude p ability p action. The Study concludes that enterprise culture “promotes an awareness of opportunities for new or innovative ways to create value, a ‘can-do’ attitude, an aspiration to pursue these opportunities, the ability to marshal resources and build capability and the action to achieve a goal.” It found that: • National/regional enterprise policy and provision focuses too much on business aspects (i.e. practical skills to set up a business) and too little on encouraging enterprising attitudes and behaviours • At the local level, existing support is not always aligned with the varying needs of individuals at key stages along their enterprise journey or to local circumstances • There exists a plethora of activities often occurring in isolation with little co-ordination and knowledge sharing • Enterprising culture in excluded groups and the informal economy presents opportunities for new business ventures • Enterprise in education is not continuous or consistent with the needs of a modern economy

3.11 The Study mapped existing initiatives aimed at stimulating enterprise and found considerable government resources and activity targeted at young people, in particular at Key Stage 4 (15/16 year olds) but with little specialist resource at other school ages or at FE Colleges and therefore limited continuity or progression. It also found a wide variety of approaches, teachers’ expertise, little pooling of resources or sharing best practice, incomplete coverage by Education Business Partnerships and, in some places, fragmented engagement with employers. 3.12 The Government Enterprise Strategy announced an extra £30 million to extend enterprise education into the primary and tertiary sectors. A National Enterprise Academy is to be established with the Northwest identified as a location to build a wider specialist network for enterprise education through regional hubs. There will also be University Enterprise Networks with the Northwest identified for an early initiative. The Strategy highlights the fear of failure as a key enterprise challenge and the importance of role models to shape people’s understanding of opportunities and risk. The Prince’s Trust will be allocated £1 million nationally to identify role models to engage with disadvantaged young people. 3.13 Universities have increased their capacity to engage with businesses and the community to offer enterprise support which enables students to develop enterprise and employability skills leading in some instances to starting a business. There is a need to further develop the culture of universities to embrace and embed stimulating enterprising behaviours alongside entrepreneurship support, and to work collaboratively and share best practice to further the development of an enterprising university network. 3.14 There is little support for existing businesses to develop enterprising management and employees who can respond positively to change and be creative and innovative. Stimulating enterprise in the existing workforce is critical as 70% of the working age population at 2020 will have already left education17.

17 Leitch Review

The Government Enterprise Strategy and Innovation White Paper highlight the strong two-way correlation between innovation and enterprise and the need to support investment in skills, including increased leadership and management, mentoring, and training for SMEs. The Enterprise Strategy indicates clear evidence that some UK businesses have an organisational culture which does not encourage their employees to be flexible, creative and enterprising. The vision is for ‘more people to have the aspiration, opportunity and motivation to use their talent and initiative to be enterprising, whether expressed through starting or growing a business.’ 3.15 Government policy and strategy is linked by the common statement “unlocking potential” and the NWDA has approached this issue through the work of the Task and Finish Group’s work on “Releasing the Potential of the Workforce”. The analysis has confirmed the need to develop and embed a culture that is enterprising, entrepreneurial and innovative which can be arrived at through high profiled messages and campaigns and by engaging a process of development with the current workforce, the future workforce and inactive workforce. This implies support for organisational culture change/change management that needs to be seen as a whole company approach to workforce engagement; and a stringent focus on the attitude of a company/individuals based on a diagnostic element and tailor made provision. 3.16 The Government Enterprise Strategy places an emphasis on mentoring as a means to develop skills and knowledge within businesses and for RDAs to develop capacity in their regions. Mentoring and coaching support is very fragmented and of variable standards and needs to be included in the further development of schemes to support leadership and management, (Northern Leadership Academy and LEAD Programme) and Train to Gain programmes.

3.17 Skills levels are a key indicator of enterprise and the 2006 RES (www.nwda.co.uk) evidenced a correlation between areas of low enterprise and low skills. In his review of ‘Skills in the UK’ (2005) Lord Leitch highlights low skills as a major constraint to levels of growth and motivation in businesses. Those with low skills are less likely to be in employment and earn less than those with more skills. Skills levels have an important impact on employment and social welfare, and the unequal distribution of skills has adverse effects on income equality and constrains social mobility. 3.18 The GEM Survey (2007) also identifies a positive link between qualifications, training and access to Government programmes and entrepreneurial activity. Evidence links Leadership and Management skills to business success and labour productivity. NWDA’s own research concludes that the NW workforce needs encouragement to be more entrepreneurial and innovative and that this can be achieved in the workplace through changes in attitudes and behaviours as a result of changes in management practice and targeted skills training. The Leitch Report found that UK management is under qualified (41% below Level 2 qualifications; 38% above Level 4). 3.19 Enterprise Insight’s ‘Make Your Mark’ campaign is currently based on young people having ideas and making them happen. In 2007, the Northwest was the second highest region for holding events during Enterprise Week. However, its focus is on 14 – 30 year olds and activity is concentrated around its Liverpool (Merseyside) hub. The Government Enterprise Strategy seeks to broaden their focus to also include women of all ages, BME and over 50s. 3.20There is also a plethora of enterprise awareness initiatives at local levels. This is funded by LSC and Job Centre Plus as part of programmes to address worklessness or by local authority funding streams e.g. Working Neighbourhood Funds, LABGI, LEGI etc. The GONW study of enterprise in disadvantaged areas (EKOS 2008) identified that insufficient emphasis had

been given to learning from the experience of other areas and therefore in order to develop initiatives best practice needs to be shared.

Policy Themes In order to develop an enterprise culture the Northwest needs to: • Stimulate enterprising attitudes, capabilities and behaviours • Extend enterprise awareness campaigns, role models, ambassador networks, etc • Coordinate activity and share the best practice that already takes place in schools, HE/FE • Ensure enterprise education is lifelong in schools/colleges, business and in the community • Develop enhanced mentoring and coaching initiatives • Target activity where it is needed and be responsive to specific local needs • Achieve a complementary balance between enterprise culture and start up initiatives • Themes are developed in Action Areas 1 and 2

Underperforming Groups This section focuses on groups which are underperforming in terms of enterprise due to their specific barriers to enterprise, especially starting a business. Women, BME, the disabled, 50+ and other age groups are national enterprise priorities for intensive or specialist support. Women 3.21 The Government Enterprise Strategy places considerable importance on supporting Women’s Enterprise. New initiatives include proposals for an Investment Fund, Business Centres (including a pilot in the Northwest), support channelled through Children’s Centres, mentoring, a National Enterprise Centre of Excellence, an awareness raising media campaign and accessing public procurement opportunities. “If the UK could achieve the same levels of female entrepreneurship as the US, Britain would gain three quarters of a million more businesses” (Chancellor of the Exchequer Gordon Brown, February, 2005). This under representation of women entrepreneurs accounts significantly for the difference in business density between the UK and US. 3.22 Research, such as ‘The Regional State of Women’s Enterprise in England,’(Prowess, 2005) has consistently highlighted issues which can make starting and growing a business more challenging for women than men: lack of accessible childcare, inappropriate business support services, issues affecting the transition from benefits to self-employment and access to finance. The Government launched the Women’s Enterprise Taskforce in 2006 to drive forward the women’s enterprise agenda across Government departments and throughout the UK. A regional body, the Women’s Enterprise Forum, which mirrors the national organisation, was set up in 2004. 3.23 ASBS (2006)18 indicates that only 12% of Northwest SMEs are women owned/led with 86% being microbusiness (<10 employees) and a relatively high proportion were recent start-ups. Female entrepreneurship in the Northwest continues to be lower than the UK average (3.7% of working ages) but improved to a 5 year high of 3.4% in 2007. Female early stage entrepreneurship activity (<31/2 years) is just 47% of the male rate19 and varies across the region. Established (31/2 + years) business ownership by women in the Northwest is joint lowest of all UK regions indicating that a relatively high proportion of businesses are being closed after the initial stage.

18 Annual Survey of Small Businesses’ Opinions (2006) 19 Global Entrepreneurship Monitor, 2007 20 Global Entrepreneurship Monitor, 2007

3.24 Women are less likely to be thinking of starting a business compared to men (4.3% compared to 8.9%). Women in the Northwest are significantly less likely to think that they have the skills to start a business than the UK average (38% compared to 56%).20 Black and Minority Ethnic (BME) 3.25 Nationally self-employment rates of BME groups are growing faster than British/White groups resulting in a decrease in the comparative rate gap from 4.0% to 2.7% between 2005 and 2007. The Government’s Ethnic Minority Task Force has priorities to help BME entrepreneurs to access public procurement opportunities, finance and business support, and Government wishes to develop a network of BME ambassadors. The NWDA established the Northwest Ethnic Minority Business Forum (EMBF) in 2005 to represent the views of the BME businesses within the region and provide a focus for support activities to address the issues above. 3.26 There are 230,000 working age people of BME background in the Northwest which accounts for 5.6% of the total regional population. ASBS (2006)21 indicates that 7% of Northwest SMEs are BME owned/led with 88% being micro businesses (< 10 employees). Only 0.4% of Northwest SMEs are owned/led by BME women. The GEM Survey (2007)22 indicates variations in enterprise attitudes between groups, with Black African and Caribbean being particularly positive but there remains relatively low conversion into actually starting a business compared to their white counterparts. Early stage entrepreneurial activity (<31/2 years) rates for ethnic groups in the Northwest are higher than UK averages.23 Therefore the proportion of BME businesses has improved, but there remain significant enterprise barriers which, if addressed, would lead to an even bigger contribution to the economy. 3.27 The Wealth Bringers report (July 2005) estimates that BME businesses in the Northwest contribute some £1.7 billion to the regional economy and identified the need for: appropriate business support across the

21 Annual Survey of Small Businesses’ Opinions (2006) 22 Global Entrepreneurship Monitor, 2007 23 Global Entrepreneurship Monitor, 2007

region; more training or formal education (especially for older individuals); access to funding; more awareness of the contribution that BME businesses make to the Northwest economy and the need for BME businesses to diversify from declining industries. 3.28 The recent influx of migrants from new EU countries represents a new source of potentially enterprising individuals which may become new business owners of the future.24 Age Groups 3.29 The GEM Survey (2007)25 shows that the Northwest TEA has a similar age profile to the UK in terms of entrepreneurial activity but that 35-44 year olds, especially males, have relatively higher rates and this age group is often seen as having greatest potential to start new businesses. Also 18-24 year olds have rates close to national averages which provides optimism for the future. 3.30Over 60% of 165,000 businesses surveyed by the Federation of Small Business in 2004 were owned by people over 45. The greatest percentage ownership was amongst the over 55s. This demonstrates the significant contribution that this group already makes to the economy. ASBS (2006)26 indicates that 46% of SMEs are owned/led by over 50 year olds. In addition, in the Northwest 3.8% of 55+ expect to start a business in the next 3 years (3.5% in UK).27

older age groups represent a latent pool of experienced talent to increase their economic activity rates through enterprise. 3.33The Government Enterprise Strategy has recommended a number of proposals to raise enterprise awareness in young people, including more support for enterprise education, and for older people. Disabled 3.34A recent study29 has identified that 140,000 disabled people in the Northwest have indicated that they want to work. The number of disabled people willing to set up a business can be taken as a nominal 10% of those that want to work. This would equate to 14,000 potential disabled entrepreneurs in the region. In benefits savings alone this would save over £59 million per annum plus the regional impacts of their business turnover which is estimated at £280 million. In total, therefore, assistance to disabled entrepreneurs would be worth £339 million. Therefore, disabled people represent a latent supply of potential entrepreneurs, providing their particular barriers to start up can be addressed. The study uncovered a lack of understanding of disability, it often being interpreted as ‘not being able to work.’ It suggests that disability is caused by a society that does not take account of people with impairments creating disabling barriers.

3.31 UK GDP is between £12 billion and £30 billion lower than it might be otherwise because of the underemployment of older people.28 In 2000 the DTI produced an action plan to increase participation amongst the over 50s age group, Foresight: The Age Shift: Priorities for Action. The key priorities included: to increase awareness of the potential of enterprise development as an enabler for older people to remain economically active, to maintain their independence and play an active role in society.

Amongst the key findings of the study were: • Disabled people are often not aware of the business support services available. • The focus of support has primarily been on disabled people as employees not as entrepreneurs. • Disabled people, due to discrimination in employment, are more likely to be necessity entrepreneurs than opportunity entrepreneurs. However, many more disabled people would be attracted to set up their own business with enhanced levels of business support.

3.32 Recent research from the NWDA highlights current comparatively low levels of economic activity in those aged 50 plus. In 2006 economic activity rates were 68.6% for those aged between 50 and retirement age and 8.9% for people aged over retirement age (76.7% for all people of working age). Due to demographic changes the Northwest has an ageing population and, resulting from redundancy and early retirement,

The study identified the need for: promoting equality; providing tailored support to disabled people (e.g. support in participation in networks); and further research into disabled entrepreneurship.

24 MSIO Research, 2006 25 Global Entrepreneurship Monitor, 2007 26 Annual Survey of Small Businesses’ Opinions (2006)

27 Global Entrepreneurship Monitor, 2007 28 Age Concern (2004) The Economic Contribution of Older People: 29 Wealthbringers Too: The Sustainable Value of Disabled Entrepreneurs, 2008

Targeting Resources at Underperforming Groups 3.35The RES already prioritises groups which under perform on enterprise: Women, BME, disabled 50+, ex-offenders, lone parents, etc, and many enterprise initiatives are already focussed on their support. However, simplistic definitions/data of groups, which are not homogenous, can be a ‘blunt instrument’ to identifying individuals with barriers to enterprise and other groups e.g. some unemployed white males may have similar needs. The region needs to move towards a more sophisticated targeting of resources and diagnostic of an individual’s barriers to starting up a business so that intensive and specialist support can be tailored to their needs. 3.36There are many historical issues which relate to worklessness, which includes a culture of worklessness in the family, restrictions in the type of work a client can undertake and the need for a flexible working environment. Developing an entrepreneurial culture with some of the hardest to reach groups such as those who are currently on benefits such as Incapacity Benefit, lone parents and BMEs including migrant workers, might not directly link to business start-ups but might provide an opportunity to engage them into actively seeking employment or a change in their culture of life on benefits. 3.37 There is also a strong argument about the timing of interventions, which typically occur when people reach working age or when accessing benefits; in effect a reactive solution to a problem. To bring forward this intervention and to be proactive may prevent the problem occurring in the first place. 3.38There is a requirement to understand the changing labour market including the increase in migrant workers, many of whom are undertaking low skilled jobs which may often be at a lower level than their technical or educational competence. Again there is a need to engage with community groups to put in place interventions at the right level to make residents aware that adopting a more enterprising approach can significantly improve their opportunity to increase their earnings.

Policy Theme Support for underperforming groups needs to be focussed on: • Further understanding of the barriers and needs of these groups, support initiatives to meet these needs and spreading best practice on how to effectively target support • Ensuring mainstream business support is attuned and can respond to these needs • Stimulating demand for mainstream business support from groups that do not naturally access such services • Ensuring group specific initiatives e.g. networks, ambassadors, role models are aligned with mainstream enterprise support • Developing initiatives which address specific barriers e.g. child caring arrangements • Supporting groups e.g. BME businesses to expand their markets outside their communities and networks • Ensuring all business support products are equality and diversity ‘proofed’ • Themes are developed in Action Areas 1 and 3

Enterprising Business

The following section looks at the role of enterprise for the needs of business at three stages of their lifecycle: 1 Start-up and Development 2 Growth Potential Businesses 3 Mature and Exiting Companies This section also highlights the importance of social enterprise which can be found at all stages of this lifecycle. Start-up and Development 3.39 Government policy recognises the importance of encouraging a more dynamic start-up market in the UK. The policy recognises that levels of entry of new businesses and the efficient exit of less productive ones (‘churn’) are important contributors to productivity and a dynamic economy. 3.40 Paragraphs 3.1 – 3.6 highlight the region’s enterprise underperformance compared to the national average plus considerable sub-regional variations. For the Northwest to be at the UK average the region would require 38,000 more VAT registered businesses and 53,000 more self-employed. The RES 2006 identified the need to improve start-up rates that are high growth/knowledge-based, for groups/areas with low enterprise rates and social enterprises. The RES also identified the need to develop start-ups (selfemployment) in areas with low employment rates. The Government has set a stretching employment rate target of 80% (In Work, Better Off, Next Steps to Employment, 2007). The Northwest rate at the end of 2007 was 72.4%, therefore, there is a need to raise self-employment levels. The Northwest ERDF Competitiveness Operational Programme (NWOP) 2007-13 also prioritises start-up actions for both high growth/added value and for underperforming groups/areas. 3.41 All individuals considering starting a business can receive support through BLNW’s Universal Service which provides information, diagnostic and brokerage to more intensive/specific support. This additional support is required throughout pre-start, start-up and 36 months aftercare. Regional survival rates now being at national levels suggests this approach should be maintained. All start-up support needs to be understood and accessible by the individual and integrated with BLNW so that the entire customer journey is made seamless. 3.42 Support targeted at disadvantaged groups/areas is longstanding in the region and currently involves a wide range of funding providers and delivery agencies,

often to varying standards of quality. Many initiatives are small scale, potentially poor value for money with short term funding timescales. There are clear inefficiencies due to duplication and customer confusion in the market. However a considerable body of expertise has been built up through organisations such as enterprise agencies, chambers of commerce, local authorities, The Prince’s Trust, Jobcentre Plus, Young Enterprise, HE (New Entrepreneurship Scholarship) and FE etc. The challenge (see paragraph 4.11) is how to achieve coordination and economies of scale at the regional level, tailor regional priorities to local needs/opportunities, form delivery consortia which can leverage local networks, capacity and expertise and ensure effective local delivery. Different funding sources need to be packaged into procurement arrangements which can achieve these objectives. 3.43 BLNW and deliverers of enterprise programmes need to undertake outreach activities and engage with local networks, including business, community groups, faith organisations, youth networks etc, which can help stimulate demand and take up of services and help identify local role models to inspire other potential entrepreneurs. Innovative approaches are required to tackling barriers to start-up, and best practice needs to be spread across the region. Programmes need to be equality and diversity ‘proofed’ and advisers need to have achieved relevant professional standards. 3.44 Start-up support targeted at underperforming groups/areas involves intensive help and high unit costs with low GVA returns so resources need to be prioritised. Less than 40% of self-employed have growth ambitions over the next 3 years so resources need to be targeted at start-ups in disadvantaged areas/groups which can sustain and grow. However, groups/areas are not homogenous and there is a danger in simplistic definitions/data (see also paragraphs 3.35 and 3.78). The region needs a more sophisticated and collective approach to prioritising RES objectives and tailoring these, and targeting resources, to meet regional and local priorities.

Growth Potential Businesses 3.45 Start-up initiatives are not necessarily integrated with worklessness initiatives which are often targeted at the same individuals. Individuals often require some up-front ‘lifestyle’ coaching before being equipped to select either the start-up or training/employment option. Employment needs to be seen as a good first stepping stone towards starting a business. 3.46 Based on the Government’s definition the region may have as few as 200 high growth start-ups per annum, and the region needs to significantly increase this volume. These individuals require a specific and intensive service which includes specialist guidance and support, coaching and access to non-executive directors. The ERDF NWOP, including the Agency’s High Growth Business Support Project providing intensive support from 2008, forecasts an extra 1700 high growth start-ups up to 2013. This project will be closely linked with enterprise initiatives in HEIs to support spin-out businesses. Policy Theme There is the need for two types of start-up support: for underperforming groups/areas and for high growth/high value businesses. The former needs to be highly targeted at regional/local priorities, and a framework for doing this is outlined in paragraph 3.78. The latter should be region-wide and where ever the entrepreneur is located. Themes are developed in Action Areas 4 and 5.

3.47 The Government Enterprise Strategy emphasises the need for businesses to be able to respond in an ever increasing competitive global market. In particular Government wants to drive the UK’s productivity performance through business innovation and growth and sees a strong correlation between innovation and enterprise which is also reflected in the Innovation White Paper and Northwest Regional Innovation Strategy. 3.48 Nationally SMEs represent 99% of all firms but only 50% of GVA output. Analysis of business performance, provided by the Office of National Statistics, highlights that the vast majority of businesses remain relatively small in terms of turnover and that rates of growth also remain relatively low. In reality few firms have the ambition to achieve high growth. The 2006 ASBS indicates nationally: • 61% of SMEs had no employment growth in the 12 months prior to the survey; • 21% of SMEs had experienced declining turnover 3.49 In comparison with UK averages, the Northwest has a gap of about 6,500 firms which have grown to a turnover between £500K and £10 million per annum. Around 30% of regional GVA is generated by such businesses. Almost 60% of businesses with a turnover >£500,000 are over 10 years old.30 3.50 Compared to the UK the Northwest has more (74% compared to 65%) micro businesses (less than 5 employees) but fewer other SMEs. This implies our small firms either lack ambition to grow and/or are unable to break through the early stage barriers to growth. Many small businesses are often set up by their owners to provide an income but with no intention to grow. The GEM Survey (2007)31 indicates that the Northwest has a relatively low proportion of established business ownership (EBO) compared to early stage activity (TEA) (> and < 31/2 years respectively). This suggests substantial churn with new businesses not converting into strong, growing businesses at the same rates as other regions, and is particularly the case for women owned businesses. 3.51 However, a small number of SMEs are more innovative than larger firms being nimble and able to exploit higher quality niche products/services. ASBS (2006) indicates that the larger the SME, the more likely it is to have growth ambition, to have innovated, supported training, undertaken leadership and management development, sought business advice and adopted

30 RES baseline data/NOMIS data for the North West 31 Global Entrepreneurship Monitor 2007

the internet. Therefore it is essential for the region to develop its growth potential businesses to achieve a size which can reflect these competitive attributes and that specialist and intensive support is targeted at those businesses with the ambition and capacity to realise this potential. 3.52 Achieving more high growth businesses does not mean just those businesses based on science and technology. High value can also be created by exploiting a wide range of knowledge, design and creativity particularly in the service sector. This requires continued improvements to enable SMEs to access expertise in HEIs, and through networks, the wider business community. University initiatives to attract and retain graduates are also important to enabling growth businesses to recruit high calibre staff during their growth phases. The universities are also an important source of new high growth businesses and help existing businesses grow through innovation and knowledge transfer, etc. The Innovation White Paper makes a number of recommendations to exploit HEI/business opportunities. 3.53 The ASBS (2006) indicates that the biggest obstacles to business success were competition, regulation, taxation, cash flow, the economy, recruiting staff, skills shortages, premises and finance. Growth tends to occur as a result of step-changes in the progress of the business and when support is most needed: • Start-up • Employing people • New product or process innovation • Trading outside of region/overseas • Expanding/moving premises • Merger & Acquisition activity • Product obsolescence • Downsizing/exiting 3.54 Research indicates that businesses (especially early stage) which take on external advice are more likely to survive and grow faster.32 Of particular importance is mentoring where the individual builds up a flexible and long-term relationship with the mentor which involves an emotional dimension to developing the individual’s attributes and skills in order to boost business performance. This requires trust developed through a long-term relationship with an experienced mentor. 3.55 It is essential that intensive and specialist support for growth potential firms is highly targeted. Whilst such 32 Barclays Bank Small Business Survey/NFEA 2002 33 DTZ Inward Investment in the Northwest: Player or Pretender? (June 2005)

companies will be able to access private sector support, there will be specific services where there is market failure requiring public sector support. The Agency is to launch a High Growth Business Support project in 2008 aimed at such businesses. These growth businesses will also be priority clients for BLNW’s targeted service and brokerage to the wide range of business support products relating to business finance, sector support, innovation and international trade outlined in Appendix 2. 3.56 The enterprise agenda needs to be more closely aligned with sector initiatives as drivers of growth and a source of new start ups and growth potential businesses. Some sectors e.g. digital and creative industries and environmental technologies are characterised by dynamic, growth potential entrepreneurs. All businesses in key sectors need an enterprising workforce to enable innovation and to be able to compete for global opportunities. Inward investment also drives competitiveness in the region with research showing that the 2,200 foreign owned firms account for 16.5% of regional GVA and inward investors pay 29% more per worker and are 34% more productive per worker than the regional average.33 3.57 Some social enterprises also have growth ambition and potential, in particular in employment terms. Government policy identifies social enterprises and VCS organisations as potential deliverers of public services e.g. NHS, due to their networks in local communities. Such opportunities are important to social enterprises to allow them to grow and diversify their income streams away from their traditional charitable/grant funding. Social enterprises require capacity building and training and support to be able to come together as bidding consortia to be able to effectively tender for commercial opportunities. Policy theme A relatively small percentage of SMEs have realistic growth ambitions and will need access to intensive and specific business support at different threshold steps in their development. Similarly some social enterprises will have the ambition and opportunity to secure commercial contracts and diversify their income streams but need mainstream and specific support to exploit these opportunities. Themes are developed in Action Areas 6 and 8.

Mature and Exiting Companies 3.58 Levels of entry of new businesses and the efficient exit of less productive ones are important contributors to productivity and growth and to a dynamic and competitive economy. This ‘churn’ of businesses is a healthy indicator of enterprising economies e.g. US where their business base rapidly responds to new opportunities. 3.59 Non-SMEs contribute 50% of national GVA. Mature, non-growth businesses will still need to change and innovate if only to stand still. However, over 40% of businesses in the Northwest do not innovate.34 The region also has a large number of medium sized family owned businesses which can face particular challenges when planning for, and implementing, succession. 3.60 The ‘Rising to the Enterprise Challenge’ (2007) study highlighted that both growing and shrinking companies demonstrate stronger enterprising attitudes than static companies. Static companies are living in their comfort zone, and only when they fall into decline do they demonstrate enterprising characteristics i.e. a necessity to survive. The challenge is to create the conditions in which mature businesses want to change and innovate. Most enterprising companies are driven by a compelling vision for the future that seemed to drive the behaviour of the business and was absent in firms that did not have a desire to grow. 3.61 Even if a company is not growing in total turnover terms, it is still important to recognise the impact mature businesses can have on regional productivity. Intensive support for businesses which are in a nongrowth situation needs to be highly selective due to their limited potential to contribute to extra GVA growth. However, a number of these companies will be strategic to the region/locality and require an ongoing relationship to aid their survival and impact. This requires further development and coordination of existing initiatives to engage in strategic discussions on their future plans and investments; both in the region and with national/overseas HQs, to determine and assist any barriers to growth and survival. Such companies include:

34 DTI Occasional paper 6, Innovation in the UK: indicators and insights, July 2006

• Major employers whose scale and therefore survival are critical to local employment • Companies which form a critical part of a supply chain to a key RES sector • Companies in decline which demonstrate enterprising characteristics and a desire to innovate into new products/services or niche markets • Companies involved in large scale mergers and acquisitions 3.62 In mature companies there could still be business segments with niche growth opportunities. This may present opportunities to set up new internal business units or spin out smaller business operations. Such ‘intrapreneurship’ is more advanced in the US than the UK and requires a positive enterprise culture in a mature company to succeed. 3.63 In a rapidly changing global economy some businesses inevitably mature and exit. However, within these firms there will be considerable assets, both human and physical which can be redeployed in new business opportunities e.g. management buy-outs, new startups and a retrained workforce. A multi-agency rapid response team bringing together their existing resources and expertise will be required to exploit these opportunities. In other instances, positive impacts may result from a ‘serial entrepreneur’ deciding to close a business unit or consolidate through merger and acquisition to the competitive advantage of the whole business. Policy Theme The region needs to maintain a high level relationship with its strategically important businesses. Inevitably some businesses will exit, but there will be the need to capitalise on the business assets; both physical and in particular human. A rapid response is required to support individuals into new business opportunities, re-training and employment. Theme is developed in Action Area 7.

Enterprising Places

The following section examines the different spatial concentrations of growth and underperforming areas in the Northwest. Addressing both opportunity and need are important to addressing the region’s RES objectives. Regional Spatial Differences 3.64 The Northwest region has significant variations between areas of growth and disadvantage, urban and rural areas and a historic industrial legacy which impacts differently on the enterprise culture in each community. 3.65 The RES identified the following underperforming areas as priorities for enterprise: Barrow, Blackpool, Halton, Knowsley, St Helens, Wirral and HMR and URC areas. There are also pockets of deprived areas in other localities. Along with the 3 major cities of Manchester, Liverpool and Preston, the RES also identified 5 growth opportunities around Crewe, Chester, Warrington, Lancaster and Carlisle. As well as their growth potential, these areas also include some of the regions most deprived areas. There are local variations in enterprise performance: VAT registered Business Starts per 10,000 Adults (2006)35 Business Starts per 10,000

High

Low

England

Northwest

Cheshire

Macclesfield – 54

Ellesmere Port & Neston – 23

Cumbria

Eden – 40

Barrow in Furness – 22

Greater Manchester

Trafford – 55

Wigan – 27

Lancashire

Ribble Valley – 43

Pendle – 26

Merseyside

Liverpool – 25

Knowsley – 17

Underperforming areas 3.66 The Enterprise Strategy36 identifies that the Government’s aim is “through enterprise (measured by the self-employment rate) to bring significant social and economic benefits to more deprived parts of the country and those groups in the population heavily represented there”. The national start-up rates of the 20 most deprived local authorities are half the rate of the 20 most prosperous. 3.67 UK economic development policy has had a spatial focus beginning in the 1960s with an emphasis on area regeneration e.g. Urban Programme, Inner Area Partnerships, and Single Regeneration Budget etc. The last 10 years has also seen an emphasis on the economic potential of cities e.g. Urban Task Force, work of the 8 Core Cities (including Manchester and Liverpool) and the City Regions Action Plans under the Northern Way which provide analysis and priorities of the growth potential and deprived area challenges that occur often alongside each other.

35 BERR Business Statistics, 2006 36 Enterprise: unlocking the UK’s talent (2008)

3.68 The Local Government Strategy ‘Strong and Prosperous Communities’ sees the improvement in the economic vibrancy of an area as essential to the Government’s ‘place shaping’ agenda to build prosperous and cohesive communities. Local authorities are planned to have a statutory economic duty to carry out an assessment of the economic circumstances and challenges of their local economy. Enterprise, skills and reducing worklessness are likely to be high priorities. 3.69 The 2007 Review of Sub-National Economic Development and Regeneration (SNR) will provide a framework to ensure that underperforming localities reach their potential. “Places must have incentives to promote economic growth and tackle the problems of deprived neighbourhoods.” SNR identifies Local Area Agreements (LAAs) as the primary mechanism for “place shaping” along with Multi-Area Agreements (MAA) covering more than one local authority area. In the Northwest 22 LAAs and 4 MAAs are being

developed, most of which include start-up targets. This provides the opportunity to co-ordinate enterprise actions locally and ensure that national, regional and local priorities are aligned and actions integrated to achieve local and, in aggregate, regional targets. 3.70 The Government has attempted to stimulate enterprise in underperforming areas in the Northwest through specific programmes such as the Local Enterprise Growth Initiative (LEGI) which provide four areas with £67.3 million resulting in some major enterprise programmes. In addition, underperforming areas attract Working Neighbourhood Funds for tackling worklessness including enterprise. 3.71 In developing the 2006 RES, supporting data found a strong correlation in each area between its performance on start-ups/self-employment, business density, earnings, skill levels, and population change. The Index of Multiple Deprivation (2007) identifies in the Northwest 21 local authorities (66 nationally) which are included in the 20% most deprived areas. 3.72 Troni and Kornblatt37 suggest interventions in underperforming areas require a careful consideration of local factors, including: a genuine understanding of specific market failures, a need to develop tailored local solutions, the extent to which start-ups are the answer to generating employment, how demand in the economy can be expanded, and the need to intervene at the most appropriate spatial level. The conclusion is that “underperforming areas” with similar symptoms may not have identical root causes of problems and therefore a universal solution should not be applied. The EKOS Study38 identified that enterprise support is sporadic, has insufficient capacity and needs tailored solutions. 3.73 Local Authorities play a significant role in creating the right local conditions for enterprise and will need to use their proposed economic duty to assess economic circumstances and their LAA/MAA to ensure the provision of supporting infrastructure; in particular new/refurbished work space on flexible terms, serviced accommodation, potential grow-on sites and premises, sector specialist facilities and incubators/science parks for high growth businesses. Developments may need gap funding support where market conditions dictate. In addition the wider environment needs to be

37 “Business Location in Deprived Areas” (Troni and Kornblatt, IPPR, 2006) 38 A Review of Partner Capacity and Capability in Developing Enterprise in Deprived Areas (2008)

made conducive to effective business operations. This includes housing, skills, and education, local transport, the quality of space, public realm, crime, waste collection, etc. 3.74 Local authorities/other public agencies can also play a significant role in maximising the local impact of their procurement activities. This requires public agencies to make their processes SME friendly and business support to equip local firms and social enterprises to be ready to tender. The Government’s Innovation White Paper has made proposals for introducing more innovation into public procurement and plans to review the practicalities of a 30% target for Government procurement for SMEs. 3.75 Resources targeted at underperforming areas have to be prioritised. Deprived areas need to be defined in a robust but flexible way as the identification of whole towns/areas can be too simplistic and include relatively prosperous areas. Official data can also mask pockets of deprivation. Using only highly localised data such as the Index of Multiple Deprivation (2007) would result in a scatter-gun approach and would miss the opportunity of joining up adjoining areas of need and opportunity. In addition different funding regimes use various area definitions which can result in a post code lottery and mitigate against the packaging of different funding. 3.76 Deprived areas can often attract significant public funding with the potential to support local enterprise e.g. ERDF, LEGI, Working Neighbourhood Fund and LAGBI. It is estimated that circa £200 million p.a. over 2008-2011 is potentially available for worklessness/ enterprise initiatives. However, not all of this funding is ring-fenced for enterprise activities and needs to be prioritised for this purpose, despite wider pressures on local authority budgets, if LAA/MAA targets are to be met. However, these enterprise schemes tend to result in self-employment whereas LAA/MAA and regional targets relate to VAT registered start-ups. From autumn 2008, the Government plans to monitor start-ups based on PAYE returns which will remove this distinction. Due to the variety of funding schemes this can result in different procurement arrangements which may result in overlapping delivery and client confusion unless careful integration is ensured.

Areas of Improvement 3.77 Also separately funded employment programmes, some of which include self-employment support, are invariably targeted at the same areas/individuals as start-up programmes. The region needs a concerted effort to provide the individual with a single enterprise journey if the region’s enterprise performance is to be improved. Despite their enterprise needs, some areas may have sufficient funding and it could be argued that new resources should be targeted at the next tier down where there is still enterprise underperformance but much less available resource. 3.78 It is considered too simplistic to have one definition/data set for underperforming areas. More local intelligence is required to understand the barriers to enterprise and the relationship between low start up rates and indicators of deprivation. It is proposed to move towards a framework of criteria which will prioritise resources based upon the optimum impact on the following dimensions: • underperforming areas already prioritised in relevant national/regional policies and official data • areas with concentrations of the underperforming groups (see 3.21 et al) • the additionality/impact of targeting additional resources on areas with a shortfall in enterprise support (scale of need offset by existing activity (paragraph 3.77 above) and value for money being achieved by packaging different funding schemes. 3.79 The objective therefore is to maintain the integrity of national/regional policy priorities but to tailor these and target resources to local needs. This approach needs to be undertaken in parallel with business support simplification and applying “regional flexibility” principles and according to how the region responds to SNR objectives. The intention would be on each major regional enterprise project to assemble an Agency/SRP/key partner ‘design and development’ team to package funding, prioritise resources using the framework of criteria (see paragraph 3.78) and monitor delivery. Policy Theme Move towards a more sophisticated and intelligence based method of prioritising areas and targeting resources and tailor regional programmes to meet local needs by applying the delivery principles outlined in paragraph 4.11. Theme is developed in Action Areas 4, 9 and 10

3.80 Establishing the right environment for enterprise to flourish involves a complex mix of infrastructure, quality of place, access to skills, finance, business support, etc. Enterprise resources need to be targeted at areas undergoing positive change and initiatives integrated with wider regeneration activities. This way the positive effects that initiatives of genuine scale can have by making a tangible impact leading to investor confidence and more positive aspirations in those communities. Enterprise support needs to be integrated with such initiatives. The effective promotion of these areas’ potential will stimulate not only local enterprise but potentially attract new businesses from outside the region. 3.81 Historically, regeneration projects were led by physical developments but not always with the proper planning and integration of enterprise, skills, business support, etc. Going forward, where major regeneration schemes are planned, the non-physical support elements need to be planned from the outset, building upon best practice that does exist in the region. This is not to suggest that new local initiatives need to proliferate but mainstream business support needs to be targeted at, and phased in, as opportunities arise. There are a number of such opportunities in the pipeline e.g. URC/HMR areas, Mediacity, Daresbury, West Cumbria Energy Coast. Other opportunities include areas where there are concentrations of key growth sectors, high growth businesses and knowledge assets e.g. science parks, the growth opportunity areas identified in 2006 RES, and other major development projects identified in sub-regional action plans. Policy Theme There needs to be targeting of mainstream and specialist enterprise support to complement major regeneration initiatives and other areas of opportunity. Theme is developed in Action Area 9.

Rural 3.82 Government priorities for supporting enterprise across rural England include targeting greater resources at areas of greatest need, providing fair access to services and opportunities for all rural people and protecting the natural environment for this and future generations.39 The NWDA is required to ‘rural proof’ policies and programmes at design and delivery stages and demonstrate how support for rural needs is mainstreamed.40 Since October 2006, RDAs have administered the socio-economic elements of the integrated Rural Development Programme for England (RDPE) on behalf of DEFRA. 3.83 The RES includes actions to focus support for businesses and sectors with growth potential in the rural economy, promote sustainable farming and food production, develop skills to enable businesses to diversify and expand, and ensure that ICT infrastructure meets business needs. 3.84 Over 80% of the Northwest region’s land mass is defined as rural 41 with 12% of the population. Rural areas include parts of Lancashire, the majority of Cheshire, all of Cumbria except Barrow and parts of Merseyside and Manchester are classified as rural. 40% of the region’s businesses are located in rural areas (with 25% of the workforce) but only generate an estimated 23% (£21billion) of the Northwest GVA total reflecting the higher proportions of smaller businesses. The estimated average 2002 GVA percapita in the urban Northwest is £13,780 compared to just over £13,000 for rural areas. 3.85 Over 40% of Northwest land has specific planning regulations associated with three National Parks, four Areas of Outstanding Natural Beauty and numerous Sites of Special Scientific Interest,42 which can limit the provision of suitable workspace, housing and transport infrastructure and constrain the creation and expansion of businesses. 3.86 Rural entrepreneurship in the Northwest compares well with the UK as a whole. Rural men, however, are slightly less entrepreneurial but rural women are slightly more entrepreneurial than rural women in the rest of the UK.

39 DEFRA: Rural Strategy 2004 40 Strong, prosperous communities, England’s Regional Development Agencies, July 2006 41 DEFRA 2005 definition, 42 State of the Rural Northwest, Pion Consulting March 2005

3.87 Most rural businesses are micro employing less than 10 people. High quality management and leadership skills are an important element of raising the productivity of the UK economy and the vast majority of SME owner/managers do not hold formal management qualifications.43 3.88 Most current interventions are as a result of the response to the Foot and Mouth crisis in 2001 and targeted at farming, land-based and tourism activities. Rural areas also include, and have the potential to attract, a far wider range of businesses, some of which may exploit niche markets from a rural presence (e.g. local food producers). There’s a need to help connect all businesses with their markets and supply chains outside of the rural areas. Small local markets and distance from national and international markets is a competitive disadvantage faced by rural small firms which niche focusing and market development support may help overcome.44 3.89 In the Northwest urban areas have an average population density of some 22 persons per hectare, whereas rural towns have around 7 persons per hectare and other rural areas are less than 1 person per hectare.45 Businesses in rural areas face many of the same issues of all businesses and therefore need access to mainstream business support. However, this lower density results in more expensive delivery costs.46 Many businesses in rural areas have low growth aspirations, requiring careful use of business support resources to ensure that a positive balance is struck between maintaining businesses important to sustainable rural communities and targeting those with true growth potential.47 Policy Theme Improve the provision of mainstream business support for businesses in rural areas with particular focus on diversification and growth for all businesses in the rural economy. Themes are developed in all Action Areas as they relate to the needs of individuals/businesses in rural areas.

43 Productivity in the UK: Enterprise and the Productivity Challenge June 2001 44 Encouraging and Supporting Enterprise in Rural Areas, SBS, February 2002 45 State of Rural Northwest, Pion Consulting, March 2005 46 Encouraging & Supporting Enterprise in Rural Areas, SBS, February 2002 47 Encouraging & Supporting Enterprise in Rural Areas, SBS, February 2002

4.0 The Strategy and Action Plan

Vision

Strategy 4.2 The analysis of the evidence (Section 3) indicates that the region has: • improving attitudes to enterprise (GEM survey) • inadequate levels of business start-ups especially VAT registered resulting in a relatively low business density • improved 3 year survival rates of those businesses that do start • too few businesses that have growth ambition and the capacity/skills to realise that ambition 4.3 A key strategic question is the balance between public sector investment in growth businesses as compared to addressing the needs of underperforming groups/ areas. Simplistically this could be equated to the £10 billion business productivity and £4 billion underemployment elements of the region’s £14 billion output gap and therefore it could be argued that the priority should be on the former. However, this takes no account of market failure and the fact that growth businesses are often able and willing to access private sector expertise complemented by specialist public

sector support where there is market failure. Conversely underperforming groups/areas are less likely to access private sector services and therefore there is an ‘equity’ justification for intensive public support. Therefore this Strategy recognises these different policy drivers as both contributing to RES objectives which results in a balanced Action Plan. However, within this balance, the Strategy places more emphasis than in the past on stimulating business growth. 4.4 The Strategy is based around stimulating a positive culture of enterprise in people of all ages and in all areas. The region needs dramatically more enterprising people who are talented and creative risk takers with a strong passion and perseverance to succeed; people who have the self-confidence, ‘can do’ attitude, to break through any barriers to success. These attitudes need to be nurtured through an individual’s lifetime; their own personal enterprise journey from school to adulthood, and supported by skills and knowledge. 4.5 The Northwest Enterprise Forum and partners crystallised this approach with the phrase: ‘People who Can and Do.’ Therefore the strategic drivers of change and improvement are:

CCC

4.1 The vision for the future is that you would find enterprise embedded in everyone’s thinking from school age through to adulthood. People who were enterprising would be admired and respected in their everyday activities; in fact colleagues would expect it of them. In management and the workforce, people would get a ‘buzz’ out of feeling empowered and the culture of embracing competition, innovation and change would pervade. The career option of starting a business would be commonly accepted and achieved with entrepreneurs recognised for their achievements, not only in business circles, but in their local communities. Successful business people would regularly feature in the media and they would naturally be prepared to act as role models to inspire others to follow in their footsteps. The initiatives currently required to target underperforming groups and areas would have diminished as all individuals and businesses could access mainstream support and receive a service tailored to their needs. The improved demand would mean that the private sector would increasingly provide most business support. The public sector would have pooled its resources to fill any remaining support gaps and the client being helped would not have sensed any of these changes taking place; only assured that they can easily access a service how and when they want to 24 hours a day and receive information and support of the highest standards.

Positive Enterprise Culture

Personal Ambition and Achievement

More Entrepreneurs and Innovative, Competitive Businesses

Regional Prosperity 4.6 This approach will drive up demand for enterprise support from both individuals and businesses. This will lead to more opportunities for the private sector to provide support and BLNW will meet most individuals’/ businesses’ information, diagnostic and brokerage needs. However, some additional major initiatives need to be undertaken, principally by the public sector if the Strategy is to be realised. The challenge for the public sector, if the Strategy’s objectives are to be achieved, is to collaborate and package its combined resources into the delivery of the following 11 priorities.

The Strategic Framework and Actions are summarised below:

Vision People Who Can and Do. Stimulate an enterprise culture, a lifelong enterprise journey and individual attributes: • • • • • • • •

Passion Attitude Belief Aspiration Trust Confidence Ability Skills

Aims Support a growing supply of Entrepreneurs

Maximise the competitiveness of existing businesses

• Inspire people to want to start a business • Address barriers to start-ups • Target priority groups/areas and high growth start-ups • Increase total entrepreneurial activity • Achieve a step change in the region’s enterprise performance

• Develop an enterprising management and workforce • Support growth ambitious businesses • Increase the rate of GVA growth in businesses • Increase the proportion of high value firms in the business stock • Step up levels of innovation in business processes

Actions Enterprising People

Enterprising Business

Enterprising Places

• Inspire young people to be enterprising • Stimulate enterprise in business • Overcome the cultural barriers faced by potential entrepreneurs

• Encourage business start-ups among people from underperforming groups and areas • Stimulate high growth, high added value start-ups • Support SMEs with high growth potential • Develop a long-term relationship with strategically important businesses • Support social enterprises’ growth and diversification

• Develop infrastructure and exploit enterprise opportunities in local areas • Create a good business environment and raise perceptions as an enterprising place

Leadership and Co-ordination • Provide leadership to the region’s enterprise strategy

4.7 The Action Plan is structured around 11priorities which are summarised in Appendix 1. The prioritisation and application of these actions will need to be tailored to meet local needs and circumstances and specific proposals developed with, and by, local partners. These actions are focussed on enterprise and complemented by supporting policies and actions outlined in Appendix 2. The Action Plan is seen as a ‘live’ document that will require updates in line with changing circumstances and the latest version will be available on www.nwda.co.uk/enterprise. 1. Inspire young people to be enterprising. Raise awareness of enterprise among young people throughout their primary, secondary and tertiary education and help them develop enterprising attitudes and behaviours. This approach should run in tandem with initiatives to influence young people through their social, leisure and community networks. 2. Stimulate enterprise in business. Develop enterprising attitudes among employers and employees as a way of increasing business’ innovation, productivity and growth. Areas of focus should include leadership and management, and mentoring support. 3. Overcome the cultural barriers faced by potential entrepreneurs. Awareness-raising initiatives should stimulate interest in enterprise, and in the idea of starting a business, among groups who currently under perform in this area, e.g.women, Black and Minority Ethnic people, people with disabilities, the young and those over the age of 50. 4. Encourage business start-ups among people from under performing groups and areas. Provide intensive and tailored business support to enable women, Black and Minority Ethnic people, people with disabilities, those over the age of 50 and all individuals in priority areas to start and develop a new business. 5. Stimulate high growth, high added value start-ups. Provide specific business support to meet the needs of start-up businesses with the potential for high growth and high added value, including mentoring, access to non-executive directors and access to specialist advice.

6. Support SMEs with high growth potential. Provide targeted business support to growth SMEs with high growth potential, including access to business finance, innovation, international trade, and sector-specific support. 7. Develop a long-term relationship with strategically important businesses. These companies will be pivotal in their sectors and supply chains, and as major local employers they need high-level engagement and on-going, appropriate support. 8. Support social enterprises’ growth and diversification. Provide specific support to help social enterprises to find new sources of income and growth by winning new contracts e.g. in the delivery of public services. 9. Develop infrastructure and exploit enterprise opportunities in local areas. Develop a portfolio of sites, workspace and related infrastructure.Target business support at major areas of improvement e.g. regeneration areas. Make sure that initiatives on the ground are joined-up, and provide business support in rural areas as well as urban ones. 10. Create a good business environment and raise perceptions as an enterprising place. Ensure that the wider environment in the region – including housing, education, transport, quality of life – is attractive to business, and promote these advantages to inward investors. 11. Provide leadership to the region’s enterprise strategy. Develop the role of the Northwest Enterprise Forum and its Stakeholder Group in supporting this Strategy, and in sharing best practice.

Impacts

Delivery Principles

4.8 A range of indicators to monitor future progress and success are summarised in section 5. In terms of a single target it is proposed to monitor the region’s business density i.e. the total stock of businesses; both VAT registered and self-employed. However, Government plans to monitor start-ups via PAYE returns in the future. Changes in business density will be made up of new businesses offset by exiting ones, i.e. a net figure.

4.11 In designing, developing, procuring and monitoring the performance of these actions the following principles will be followed:

4.9 Recent trends in growth of business density of VAT registered start-ups and self-employed have both been at around +1.24% per annum. It is proposed that a step change target would be a 20% improvement to this annual rate of increase, i.e. nearer +1.5% per annum. By 2026 this would equate to a total net increase from 2006 figures of around 64,000 VAT registered businesses and around 121,000 selfemployed. (There is some degree of overlap between these two types of business which official data sources cannot distinguish and may need to be recalibrated when the PAYE returns system is implemented). Clearly these are long-term targets and progress will vary markedly each year not least due to prevailing economic conditions. The achievement of these targets will require concerted effort and co-ordinated action by all regional stakeholders. Risks 4.10 The region’s enterprise performance will, to a large extent, be dependent upon macro economic conditions and government policies which aim to establish a business friendly environment. These wider conditions will potentially impact upon overall levels of business start-ups and their growth or failure, inward investment and international trade. Whilst the region needs to maximise its own potential it cannot be immune to wider conditions, and at the time of drafting this strategy in early 2008, overall the economy was being affected by the ‘credit crunch.’ In addition the strategy is based around making positive impacts on the region’s enterprise culture. As this deals with deep-rooted cultural values built up over generations there will be significant lead time before impacts on targets such as start-up levels will be achieved. Consequently the strategy and targets are seen as taking place over a 2006-2026 time horizon.

• Simplifying business support • BLNW will be the primary access channel for individuals/businesses seeking business support, including for enterprise. Each enterprise related product will be designed with this linkage in mind to enable an easy customer journey via BLNW then brokered into a specialist support service. This will include alignment of marketing and branding and sharing CRM systems. Any regionally managed programmes will need to ensure sub-regional/local delivery and integration with any existing activities. Service delivery needs to have easy local access and responsiveness; especially outreach initiatives with disadvantaged groups/areas. • Market failure • The public sector should only fund interventions where there is clear evidence of market failure e.g. failures in information/awareness/co-ordination of support and barriers to entry into the market for the private sector. • Coordination • Business support will be co-ordinated regionally and procurement will normally be managed at this level. This will ensure alignment with the RES and this Strategy, and achieve economies of scale and value for money. In line with BSSP/SNR the Agency will seek opportunities for local partners to complement regional programmes by co-funding, co-procurement or through call-off arrangements. For major regional business support projects, the Agency will establish ‘design and development’ teams comprising sub-regional/local stakeholders to develop the project specification; overview procurement and monitor delivery and performance. This approach will enable partners to: – identify opportunities to develop cofunding/co-procurement approaches – tailor regional priorities to target specific local needs and opportunities – provide local intelligence on specific needs and barriers to be addressed – support the integration, and delivery of initiatives on the ground – undertake initiatives to stimulate take up of regional programmes

• Value for Money • All business support projects should be the subject of open and competitive tendering and follow public procurement best practice. This will ensure best market rates and lower unit costs and provide the opportunity for expertise from existing delivery organisations and the private sector to come together, often in the form of bidding consortia. • Additionality • Target areas e.g. underperforming areas already receive significant public funding which support enterprise. New resources should be targeted according to the scale of the shortfall in enterprise support i.e. the scale of enterprise underperformance offset by existing or planned project output. 4.12 Applying the above principles and taking forward the actions outlined in Appendix 1 requires concerted and coordinated action by many partners. It is proposed that the Northwest Enterprise Forum, primarily through its Stakeholder Group, helps coordinate the delivery of the Action Plan, identify specific organisations that will deliver each action and ensure regional/sub regional/local initiatives are integrated. Shared targets need to be agreed both at the LAA/MAA and individual project levels. Progress will be monitored through the measures outlined in Section 5 and progress reported back to the region through existing arrangements to monitor delivery of the RES. Going forward the Action Plan will require updating annually as circumstances, wider policies and priorities change.

5.0 Monitoring and Implementation

Key Performance Indicators 5.1 Spatial Indicators It is vital that the implementation of the actions outlined in this Strategy are monitored and evaluated to ensure that the objectives of this Strategy and the region’s enterprise performance are being realised. Success will be measured annually towards a 2026 vision (see paragraph 4.9). Monitoring will take place at various levels: Regional Level i) PSA Target – the regional number of VAT registered start-ups per 10,000 adults ii) Start-up data48 – business density (VAT registered businesses per 10,000 adults); VAT registrations/de-registrations per 10,000 adults; positive ‘churn’ rate (increasing VAT deregistrations but overall business density increasing); % of employment being selfemployed; % start-up survival rate at 36 months iii) Annual GEM Survey of Total Entrepreneurial Activity and its sub-set analyses of positive indicators of entrepreneurship. These measures will be disaggregated to sub-regional/local levels where available.

Sub-regional/local Level i) Achievement of LAA/MAA targets and, in aggregate, regional targets ii) Performance of relevant regional programmes to achieve agreed local targets Programme Level i) Performance management and monitoring of each enterprise support programme, plus post completion evaluation ii) Increasing instances of different funding streams being aggregated into single programmes resulting in value for money i.e. improved outputs/outcomes and/or reduced unit costs Individual Level i) Increasing levels of market intelligence from BLNW on clients barriers/needs and its ability to broker to relevant products, including from the private sector ii) BLNW customer satisfaction ratings e.g. for startup enquiries iii) Pilot an approach to survey businesses to measure indicators showing a positive enterprise culture e.g. growth ambition, indicators of innovation, leadership and management, etc.

5.2 Thematic Indicators Entrepreneurial Attitudes

Start-up Levels49

Business Performance

GEM survey of entrepreneurial attitudes and perceptions: • Expect to start a business in 3 years • Know someone who has recently started a business • See good start-up opportunities • Have the skills to start a business • Fear of failure start-up Levels

• VAT registered start-ups/survival rates • Business density • Self-employment rates • Total entrepreneurial activity (GEM survey)

• New/ improved products • Number of exporters • Business productivity

48 The Government plans to monitor business start-ups via PAYE returns from Autumn 2008. 49 The Government plans to monitor business start-ups via PAYE returns from Autumn 2008.

Appendix 1

SUMMARY ENTERPRISE ACTION PLAN Strategic Theme Action

Detail of Required Actions

Lead(s)

N = new initiative , E = existing initiative, E/N = combination of existing and new/on-going developments, Actions in bold = new key priorities for 2008/9

The NWDA/SRPs will have a role in co-ordinating many actions. Organisations with a lead role/funding responsibility are identified, but not all delivery agencies.

Enterprising People 1. Inspire young people to be enterprising

Issue: The region has a weak enterprise culture. Enterprise education is not continuous and delivery needs to be better co-ordinated with improved and consistent quality. Action: 1.1 Implement Government Enterprise Strategy proposals to embed and extend enterprise education from primary to tertiary sectors; develop a regional initiative for the National Enterprise Academy for 16-19 year olds and University Enterprise Networks; develop enterprise through Premier League football clubs and Prince’s Trust’s initiative to develop role models for disadvantaged young people (all N). 1.2 Support Enterprise Insight’s ‘Make Your Mark’ campaign’ culminating in promoting regional activities during Enterprise Week (mid November each year) (E). Roll out best practice across the region, initially through an Agency supported project in Cheshire and Warrington (N). 1.3 The Agency to take forward two regional projects in 2008 which build upon Northern Way pilots. To support a network of HE Champions (N) to promote and embed enterprise across all aspects of university work. (N) The FE Hub project (N) which involves working with selected FE colleges and their ‘cluster’ of primary/secondary schools to deliver seamless progression and continuity enterprise education to wider age groups and re-develop the enterprisenw.net portal to make it more interactive and to share curriculum materials and best practice. 1.4 Influence education funders to align resources and initiatives (E); work with stakeholders to influence the use of the region’s share of additional £30m government funding to further develop the collaboration between primary and secondary schools, FE and HE.

2. Stimulate enterprise in business

Prince’s Trust Enterprise Insight

NWDA/NCGE

NWEF NWDA

Issue: Management and workforce need to develop enterprising behaviours to be responsive to change and as a pre-requisite to innovation and encourage business intrapreneurship. Action: 2.1 Take forward Government Enterprise Strategy proposals regarding mentoring, leadership and management. Pilot approaches to diagnose a company’s culture and attitudes to being enterprising through Leadership and Management (LEAD), Train to Gain and Mentoring schemes and as necessary broker in specialist change management support (E/N). 2.2 Take forward proposals resulting from the ‘Releasing the Potential of the Workforce’ Group. 2.3 Increase innovation skills and capacity (‘Innovative People’ theme from Innovation Nation white paper).

3. Overcome the cultural barriers faced by potential entrepreneurs

BERR, NWDA, HE/FE, LEAs/Young Enterprise

NWDA/BLNW/LSC

NWDA NWDA

Issue: Various groups (e.g. women, BME, disabled, 50+, lone parents, young people, ex-offenders) have low rates of enterprise and experience particular barriers to starting and developing a business. Action: 3.1 Evaluate Enterprise Strategy proposals for women’s enterprise; Investment Fund, pilot a Business Centre, target support through Children’s Centres, mentoring and public procurement opportunities.

NWDA

Strategic Theme Action

Detail of Required Actions

Lead(s)

N = new initiative , E = existing initiative, E/N = combination of existing and new/on-going developments, Actions in bold = new key priorities for 2008/9

The NWDA/SRPs will have a role in co-ordinating many actions. Organisations with a lead role/funding responsibility are identified, but not all delivery agencies.

3.2 Work with Enterprise Insight to raise enterprise awareness of young people, over 50s and women of all ages. Explore opportunities for a BME Ambassador network. (all N) Continue to research and understand the specific barriers each different group experiences (E/N). 3.3 Promote an awareness and understanding of these barriers in all mainstream deliverers of business support through specialist adviser training (E). Ensure mainstream support is accessible by these groups in terms of local access, materials, and advisers with relevant languages (E/N). 3.4 All enterprise support products be equality and diversity ‘proofed’ (E/N). 3.5 BLNW and support providers to undertake proactive outreach to stimulate demand from ‘hard to reach’ groups (N). Complement and integrate mainstream activities with group-focussed initiatives such as awards events, networks, ambassador programmes, role models and share best practice (E). 3.6 Ethnic Minority Business Forum Northwest, Women’s Enterprise Forum and PRIME to show leadership and influence regional/ national enterprise policies and actions (E).

Enterprise Insight

NWDA/BLNW

All providers BLNW/LAs/ Enterprise Insight

EMBF/WEF/PRIME

Enterprising Business 4. Encourage startups from underperforming groups and areas

5. Stimulate high growth, high added value start-ups

Issue: The region has relatively low rates of start-up and low business density compared to the national average. Action: 4.1 Achieve successful performance of the Regional Start-up and Survival project delivered by the A4e consortium until March 2009 (E). During 2008, design, develop and procure a follow-on Regional Start-up project for an April 2009 start (N). 4.2 Improve start-up linkages with worklessness programmes which are often targeted at the same individuals (E/N). Utilise existing community infrastructure and networks and build capacity to support outreach activities (E). 4.3 Establish an NWDA/SRP design and development team applying the delivery principles outlined in paragraph 4.11 of the strategy (N). Continue to map and integrate all start-up provision to remove duplication and provide a seamless service to clients alongside BLNW as the primary access point. 4.4 BLNW to continue to develop its range of information and diagnostics for start-ups and undertake marketing to undertake outreach activities to stimulate demand from ‘hard to reach’ groups/areas (N). 4.5 Identify barriers to starting a business e.g. coming off benefits and influence Government/delivery partners to develop innovative solutions (E).

NWDA/SRPs/LAs

NWDA / SRPs /JC+/ LAs

NWDA//SRPs/.LAs

BLNW

NWDA/NWEF

Issue: The region has too few high growth/high value potential businesses. Action: 5.1 Complete procurement and contracting of the regional High Growth Business project for a July 2008 start and achieve its successful performance through to March 2011(N). The project will provide individuals with specialist and intensive start up advice, mentoring and access to non-executive directors. Establish effective brokerage arrangements to relevant products e.g. access to

NWDA/BLNW/ HEIs

Strategic Theme Action

Detail of Required Actions

Lead(s)

N = new initiative , E = existing initiative, E/N = combination of existing and new/on-going developments, Actions in bold = new key priorities for 2008/9

The NWDA/SRPs will have a role in co-ordinating many actions. Organisations with a lead role/funding responsibility are identified, but not all delivery agencies.

5.2 finance and private sector specialist support. Integrate the project with BLNW targeted service to provide a seamless service to the client. Integrate the project with HEI enterprise initiatives to stimulate enterprise and spin out businesses (E). 5.2 Attract high value inward investment (E). 5.3 Create incubators and develop a regional network of specialist incubator services which can be flexibly deployed to support micro businesses in all incubators (co-linked with ‘Innovative Places’ theme) (E). 6. Support SMEs with growth potential

Issue: Many of the regions micro businesses fail to grow rapidly and exploit their full potential. Need to target more of the region’s business support resources at growth potential businesses. Action: 6.1 Complete procurement and contracting of the regional High Growth Business project for a July 2008 start and achieve its successful performance through to March 2011(N). The project will provide businesses with growth ambition with specialist and intensive advice, mentoring and access to non-executive directors. 6.2 Continue to develop BLNWs targeted service which supports firms in the region’s 6 priority sectors and other growth potential firms (E). Broker firms to private sector specialist advice and to relevant products such as business finance and investment readiness, sector support, innovation and international trade. 6.3 Improve growth businesses access to the specialist resources which exist in the regions HEIs (E/N). 6.4 Support for ‘Innovation in Business’ through Knowledge to Innovate, innovation vouchers and innovation advisor services (E/N).

7. Develop a long term relationship with strategically important businesses

8. Support social enterprises growth and diversification

NWDA/SRPs Developers/HEIs/LAs

NWDA

BLNW

HEIs NWDA/HEIs

Issue: The region is heavily dependent on mature businesses, including strategic companies which are major employers and/or pivotal in clusters/supply chains. Action: 7.1 Identify those companies that are genuinely strategic in the region. Develop a long-term and high level relationship with local management and where appropriate overseas HQs. The emphasis should be on long term strategic threats and opportunities facing the business and delivering relevant support. Develop a clear engagement strategy between NWDA, SRPs (Team Northwest), regional cluster organisations and a co-ordinated response mechanism (E). 7.2 If major firms plan to cease their operations in the region, introduce a ‘rapid response’ team, to utilise the assets in the business, both physical in terms of re-use of land and buildings but in particular the human expertise built up in the management and workforce. An intensive response package needs to support individuals considering MBOs, a new start-up/self-employment or re-training and employment (E).

NWDA/SRPs/RCOs

NWDA/SRPs/LAs/LSC/JC+

Issue: Too few of the region’s social enterprises generate sufficient commercial income to grow and diversify from their charitable/grant sources. Action: 8.1 Implement Northwest opportunities from the Government’s ‘Scaling New Heights’ Action Plan for social enterprises (E). Provide and raise awareness of the contribution social enterprises can make to the economy; in particular their role in delivering public services.

NWDA/Social Enterprises NW

Strategic Theme Action

Detail of Required Actions

Lead(s)

N = new initiative , E = existing initiative, E/N = combination of existing and new/on-going developments, Actions in bold = new key priorities for 2008/9

The NWDA/SRPs will have a role in co-ordinating many actions. Organisations with a lead role/funding responsibility are identified, but not all delivery agencies.

8.2 Work with procurement managers and make social enterprises ‘ready to tender’ to secure new income streams (N). 8.2 Continue to develop the capacity, expertise and share best practice between the sub-regional social enterprise partnerships and individual social enterprises (E). 8.3 Increasingly mainstream business support to social enterprises as a form of business but by organisations e.g. BLNW being understanding of their specific business needs (E/N). 9. Develop infrastructure and exploit enterprise opportunities in local areas

10. Create a good business environment and raise perceptions as an enterprising place

Social Enterprises NW

BLNW

Issue: Support for enterprise in particular communities can be uncoordinated, not tailored to local needs, and there can be gaps in key supporting infrastructure. Action: 9.1 There needs to be an on-going portfolio of new/refurbished workspace on flexible terms, common service provision, associated grow on space, incubator/business parks and where necessary gap funding support (E/N). 9.2 Exploit opportunities from regeneration and other growth opportunities (E/N) and target mainstream business on a coordinated basis into these areas. 9.3 Establish local co-ordination groups across administrative boundaries including deliverers of enterprise support to ensure all initiatives are joined up and provide a coherent service to the client. Develop capacity by sharing best practice across the region on innovative approaches to enterprise. 9.4 Ensure start-up (self-employment) and worklessness programmes, are integrated as these are often targeted at the same individuals (E/N). 9.5 Ensure regional, sub-regional action plans, MAAs/LAAs outputs are shared, realistic and aligned and integrated delivery is in place to achieve these targets (N). 9.6 Ensure mainstream enterprise support is accessible to all businesses in rural areas to help create new businesses, help diversification, and improve productivity through networking, collaboration and accessing new markets (E/N). 9.7 Utilise RDPE to address enterprise and skills issues of the agriculture and forestry sector and other rural businesses (E/N).

LAs/private sector/NWDA

BLNW//enterprise support organisations SRPs/LAs

NWDA/SRPs/LAs

GONW/SRPs/LAs/NWDA

BLNW/enterprise support organisations

NWDA/enterprise support organisations

Issue: Many locations do not provide a business friendly environment and an effective operating base for companies. Action: 10.1 An economic duty is to be placed on local authorities to improve the economic vibrancy of their area as part of the Government’s place shaping agenda. It is proposed this will involve carrying out an assessment of the economic circumstances and challenges of their economy (N). 10.2 Develop the general business environment in terms of improving housing, skills and education, local transport, the quality of space, public realm, crime, waste collection, etc. Engagement with businesses needs to identify, prioritise and resolve these issues and targets to be reflected in LAAs/MAAs (E/N). 10.3 Promote key business locations to support the attraction of inward investment (E). 10.4 Develop ‘Innovative Places’ theme through strategic sites (Daresbury Innovation Centre), Incubation (see 5.3) and the innovation ecosystems of City Regions.

LAs/SRPs

NWDA/SRPs NWDA/Private Sector/LAs/ SRPs

Strategic Theme Action

11. Provide leadership to the regionâ&#x20AC;&#x2122;s enterprise strategy

Detail of Required Actions

Lead(s)

N = new initiative , E = existing initiative, E/N = combination of existing and new/on-going developments, Actions in bold = new key priorities for 2008/9

The NWDA/SRPs will have a role in co-ordinating many actions. Organisations with a lead role/funding responsibility are identified, but not all delivery agencies.

Issue: Enterprise in the region has not previously had an overarching strategy and leadership to champion its objectives and oversee delivery of actions. Action: 11.1 Develop the leadership role of the recently established Northwest Enterprise Forum (NWEF) (E). 11.2 Utilise the NWEF Stakeholder Group of sub-regional partners and enterprise related agencies to support the development and delivery of this Strategy and as a network to share best practice.

Northwest Enterprise Forum NWEF Stakeholders Group

Appendix 2

Supporting Policies and Actions A number of policies and initiatives support the three key enterprise dimensions of people, business, and places. The following section outlines these key areas and identifies key priorities for action.

Sectors/Cluster development Background The cluster development programme is focused on the priority sectors in the 2006 RES. These are:• Biomedical • Energy and Environmental Technologies • Advanced Engineering and Materials (including Chemicals, Aerospace, Automotive and Advanced Flexible Materials) • Food and Drink • Digital and Creative Industries • Business and Professional Services The competitive advantage to companies of being located near to other similar companies. It should increase innovative capacity, which drives competitiveness (productivity). This in turn increases prosperity. It focuses on exploiting the linkages between cluster participants. The aims of the cluster development programme in the Northwest are: • to focus on the priority sectors for cluster development to develop higher value activity, improve productivity and identify future growth opportunities from converging markets/technologies • to develop a strategic vision leading to the long term sustainable growth of each sector based upon business competitiveness • to promote the development of world class clusters, within and between the priority sectors, and ensure that each sector has the required support to exploit its growth potential and maximise its contribution to the region’s GVA • that the process should be industry-led with the NWDA playing a facilitating role and providing practical back-up support • to identify and prioritise major project/initiatives to help achieve growth in GVA and identify the optimum method of delivery • to ensure that the cluster development programme is informed by robust data and that performance is measured consistently

50 Professor Richard Harris and Q Cher Li of the University of Glasgow Firm Level Empirical Study of the Contribution of Exporting to UK Productivity Growth (July 2006) 51 DTZ Inward Investment in the Northwest: Player or Pretender? (June 2005)

Actions • Undertake cluster development programmes for clusters within key RES sectors • Support sector growth through the development of strategic sites/facilities • Undertake international supply chain programmes to support the growth of key sectors • Develop the skills base in the Northwest in line with the requirements of key sectors/clusters

Internationalisation Background The RES identified the need to “maximise opportunities from globalisation and emerging markets and raise companies’ awareness of about global opportunities/risks to assist them in competing internationally and develop a new Internationalisation Strategy”. Enhancing the region’s position in the global economy through a proactive internationalisation action plan will play a central role in reducing the region’s GVA gap with the rest of England. UK exporters are more productive when compared to non-exporters and are more likely to stay in business50 and inward investors in the Northwest pay 29% more per worker and are 34% more productive per worker than the regional average.51 An action plan has been developed and is currently being implemented. See Internationalisation Strategy and Action Plan for further details. Actions 1. Developing internationally competitive sectors through outward and inward investment, trade and international supply chains, and by developing an internationally comparable skills base. This is focused on the six priority RES sectors: • Biomedical including biotechnology, pharmaceuticals and medical devices • Energy and Environmental Technologies • Advanced Engineering and Materials including chemicals, aerospace, automotive and advanced flexible materials

• Food and Drink • Digital and Creative Industries • Business and Professional Services 2. Maximising the international potential of the Northwest’s science & innovation, research & development and education assets by promoting research concentrations and knowledge capabilities internationally. 3. Targeting strategically important countries to consolidate our position in established markets and explore opportunities in important growth markets; these markets are listed below. In all cases the aim is to exploit existing infrastructure including the Agency’s and partner organisations’ overseas presence. • USA and Japan, which should continue to be serviced through the North of England Inward Investment Agency (NoE) presence for Inward investment activities • India and China (with some extension into Southeast Asia), which should be serviced by providing new incountry resources and leveraging existing UKTI resources • Continental Europe (given large existing investor presence – France, Germany) and Russia. In some instances these can be serviced from the UK, or via the Northwest Brussels Office (NWBO).

products and processes. Hence, business must form a core theme for innovation and innovation policy must have its ultimate effect on businesses, their capability, and their operating environment. Encouraging innovation is part of the Government’s mission to create the conditions for business success and help the UK adjust to globalisation. As a direct reflection of the Lisbon Strategy, it is at the heart of policy towards increasing competitiveness and productivity in the UK. UK innovation performance is around the average of other advanced economies and the EU innovation scoreboard classifies the UK as an ‘innovation follower’. The Northwest regional innovation scoreboard rating is slightly below that of the UK as a whole. Innovation needs to be considered on a wider basis than the conventional science and technology or product concepts. The European Commission discuss a broad based innovation strategy for Europe that translates investments in knowledge into products and services. The Department of Innovation, Universities and Skills (DIUS) ‘Innovation Nation’White Paper also recognises that innovation draws on a wide variety of sources and is driven as much by demand as supply.

5. Enhancing the region’s international connections through transport links, networks and political relationships, and by attracting international events, business visitors and tourists.

The key elements of a successful innovative economy focus around three core activities – Innovation Capacity; Innovation Collaboration; and Innovation Investment. The activity of innovation (as a cross-cutting theme) should be a process which engages skills, sources of knowledge, business, market structures and consumers in an open exchange which increases the capacity of individuals and businesses to exploit that knowledge leading to increased competitiveness/productivity and improves quality of life for all.

6. Influencing European and UK international policies and programmes that have a direct impact on the Northwest including the national UK Trade and Investment five-year strategy Prosperity in a Changing World.

Improving the overall levels of innovation in the Northwest necessitates raising the awareness of innovation, increasing the access to, and exploitation of, knowledge, and also increasing the motivation and capacity throughout the regions businesses.

4. Promoting the Northwest’s assets internationally by developing clear regional and sub-regional messages, identifying and targeting specific opportunities and contributing to the national drive to promote “UK plc”.

Innovation Background Innovation can be described as “…the successful creation, absorption and exploitation of new ideas in the economic and social arenas…” The economic benefit of innovation is captured through businesses embracing innovation in

Innovation activity in the RES identified science sectors should build on the Northwest Science Strategy and the strong innovation activities which already exist. For the nonscience dominated sectors, there needs to be a much greater understanding of the innovation processes and outputs. Technology and science do feature in these sectors and can be the tool with which the innovation is enabled e.g. Internet in banking, or additives in food processing.

There is strong alignment between the DIUS ‘Innovation Nation’White Paper and the innovation focus and activities in the Northwest particularly around the issues of skills requirements (innovative capacity), Action To deliver these outcomes a coordinated programme of activities is required which emphasises and builds on the interdependencies of skills, collaboration and investment. This leads to the following overall activity areas which will be further developed as the Northwest Innovation policy, which is in development, is finalised. There is already existing activity in some of these areas through a combination of publicly and privately funded programmes. Skills • Raise awareness of ‘absorptive capacity’ across organisations. • Stimulate demand for innovation & entrepreneurship. • Increase the levels of graduate retention. Collaboration • Stimulate participation in open innovation. • Increase the demand for innovation support. • Extend/exploit existing focal points of innovation. Investment • Increase awareness of resources required for innovation investment. • Support the ‘investment ready’ approach. • Facilitate access to suitable finance. Mapping • Review and connect with existing metrics exercises. • Incorporate suitable metrics for ‘service innovation’. • Establish existing status of regional innovation.

Sustainability Background At the heart of the Regional Economic Strategy is the concept of achieving sustainable development. This will be achieved through adherence to the shared UK Guiding Principles for sustainable development which include, achieving a sustainable economy, promoting good governance, using sound science responsibly, living within environmental limits and ensuring a strong, healthy and just society. In addition, one of NWDA’s key purposes (RDA Act, 1998) is to promote sustainable development within its area of responsibility. Sustainable development must therefore be a central consideration of all projects, programmes, policies and strategies developed by the Agency.

At National level, following the production of the Stern Report – Economics of Climate Change, the Government have been working to put in place a range of policies and legislative drivers to accelerate progress towards the development of a low carbon economy. These include: the Climate Change Bill; Code for Sustainable Homes, Part L of the Building Regulations; Climate Change Levy; the Landfill tax escalator and the Energy Strategy 2007. At a regional level, the Agency, through its statutory remit to encourage sustainable economic development in the Northwest, has put in place a number of measures to take forward this agenda, these include the Regional Climate Change Action Plan, Sustainable Buildings Policy, and support for the North West Sustainable Energy Strategy. Action Enterprise activity in the Northwest needs to support the development of a low carbon economy, not only to ensure that European, national and regional carbon and waste reduction targets and objectives are met, but also to ensure that the region is able to take advantage of the opportunities that will arise from this economic shift. Through the simplification of business support, the support mechanisms that exist to deliver both low carbon advice and waste reduction have been integrated into Business Link through Environment Connect. There is a need to ensure that enterprise support is provided to new and existing businesses to increase business awareness and effectiveness at addressing the challenges and opportunities of a carbon constrained economy of the future. Commercial, legislative and consumer drivers will require entrepreneurs, business managers and employees to develop the skills, products and services required by a low carbon society. Significant economic opportunities will arise for those businesses that today have the inspiration, leadership and vision to consider the innovation challenges of tomorrow.

Growing the size of the workforce Background The RES identifies that £4bn of the £14bn GVA gap as being down to fewer people being in employment. The aspiration for the Northwest and the UK is to have 80% employment by 2020. This is defined in the DWP paper “In work, better off: next steps to full employment” (July 2007).

Promoting employment and enterprise throughout the UK are key aims for the Government. The long term goal is to ensure a higher proportion of people in work than ever before by 2010 and to create an enterprise culture across the UK. Particular priority is placed on helping groups who are disadvantaged in the labour market. Support for self-employment and enterprise has had considerable success through the work of the Business Link, the New Deal initiatives and through Local Government initiatives. In the last ten years employment has increased by 2.5 million; as a result the employment rate for “working age” adults (defined as those aged from 16 to 59 for women and 16 to 64 for men) is close to its highest ever level at 74.7% and 72.9% in the Northwest (ONS December 2007) In line with the general increase in the employment rate there has been a marked increase in self employment, which has increased from 3.2 million to 3.6 million since 2002. This now represents 12.2% of the labour market, compared to 11.4% in 2002. Improving the enterprise culture is a key aspect of the strategy towards growing the size of the workforce. This is based on helping individuals to have an improved understanding of the opportunities that are available to them through self-employment and by ensuring that public sector support to encourage enterprise can be linked to skills and jobs pledges which will particularly support local target groups. Action Across the Northwest the NWDA is involved in a range of worklessness projects that are supporting the agenda of reducing worklessness and increasing the size of the workforce. The NWDA is supporting 5 sub-regional worklessness projects which aim to provide support to local residents and businesses based on priorities identified in the City Employment Strategies and sub-regional action plans.

• Taking a coordinated approach to worklessness and growing the size of the workforce which includes agencies such as the LSC, Jobcentre Plus and the NWDA working together to provide advice and guidance to people not in work or with low levels of skills into all types of work including self-employment. • Understanding the particular issues relating to specific communities, in terms of issues of worklessness a lack of enterprise culture in order to develop effective interventions. • Releasing the potential of the existing workforce through workforce development and encouraging increased innovation. A particular focus of this activity will be on older people and migrant workers. A key approach to increasing the size of the workforce is to link closely with current Government strategy in terms of welfare reform, strategies to end child poverty and an “In work, better off” policy which should ensure all clients are better off in work than on benefits. The introduction of the Employment Support Allowance and changes to Lone Parent Income Support provides an increased opportunity to engage with clients who may have been out of the workforce for an extended period. Interventions with these groups must recognise that they may not be work ready at the initial point of engagement and also that improving enterprise culture within this group may be an opportunity to increase earnings by developing a business which may be just as likely to be a secondary income source as their main earnings potential.

ICT Background Not enough firms in the Northwest, especially those most likely to benefit from ICT, have adopted and exploited state-of-the-art ICT to the fullest extent.

Enterprise is embedded within these programmes that are being delivered. Activities within these projects include community initiatives which can promote enterprise and self-employment as well as providing specific support to employers on the recruitment of staff.

Research conducted by the NWDA highlights that if ICT is utilised more effectively amongst existing businesses then the economic impact could potentially result in a 3-4% increase in productivity. If the region encourages the takeup and exploitation of ICT, the research suggests that for the Northwest the additional contribution to GVA could be as much as £3.7billion.

A growing the size of the workforce strategy is currently in development, but there are key aspects essential to such a policy such as:-

The role of ICT in creating new businesses is equally important and is possibly one of the most important drivers the region can address through its enterprise policy.

ICT underpins the achievement of the RES through more than just economic growth, contributing to many other policy areas. Action In respect of enterprise development there are a number of areas in which ICT can provide solutions, including the following: • It make it easier to start up in business, to survive and go on to prosper. • Survival rates amongst SMEs that utilise ICT from the outset are demonstrably higher. • ICT can boost innovation and knowledge collaboration through increased communication and more dynamic working practices and business models. • Effective use of ICT increases productivity and reduces overheads. • ICT accounts for a quarter of EU GDP and 40% of productivity growth. • 50% of new businesses are started at home – many of them enabled by a broadband connection and a PC. A strategic framework for the exploitation of ICT across the Northwest is under development and this will provide a basis for future activity and interventions across the region.

Finance Background Access to finance has long been recognised as a key issue to improve the formation, survival and growth of businesses. Affordable and appropriate finance is crucial to all businesses; from encouraging self-employment, supporting social enterprises, and the development of high growth enterprises. A key issue for the enterprise strategy is to ensure that the appropriate support is available to businesses in order that they can access the finance that best meets their needs and business aspirations. The great majority of business finance comes from, and will continue to come from the private sector through a wide variety of providers including: friends and family, high street banks, and venture capitalists. Research has, however, highlighted that there is a market failure in respect of the

availability of appropriate finance for SMEs, particularly start-ups and early stage businesses and especially those that are innovation or technology based with high growth potential. Actions The RES identifies these issues through actions 5 and 6 and the Agency is soon to publish a Finance for Business Strategy that seeks to address the issues noted. The Agency will invest £25 million through its finance programmes during the financial year 2007/8: £15m on Selective Finance for Investment; £5m on Grant Funding for Research and Development; £4.7m on Venture Capital; £180,000 on Business Angels; £120,000 on Investment Readiness Support.

Supply Chains Background As companies receive diminishing rates of return from undertaking conventional methods of internal cost reduction the only remaining step change available to them is in their supply chain. Operational efficiency at the plant level is no longer enough to retain a company’s competitive advantage because competitors are doing the same. Supply chains now compete with other supply chains rather than a company competing with another individual company. Supply chains are global supply networks incorporating all aspects of sourcing, production, management, innovation, distribution and customer service. The Northwest’s key sectors are integrated into these global production networks and as such must compete and grow within this competitive and dynamic environment. A key element of supply chain management includes the coordination and collaboration with channel partners which can be suppliers, subsidiaries, intermediaries, third party service providers and customers. Actions 1. Develop key internationally competitive sectors, maximise opportunities from globalisation and emerging markets and realise opportunities from inward investment. The Northwest priority sectors are integrated into global supply chain networks and must compete and grow within this competitive and dynamic environment.

• Advanced Manufacturing Supply Chain Programme. The programme co-ordinates and provide supply chain group solutions to RES priority sectors to develop globally competitive supply chains, this project will be primarily delivered with the Regional Cluster Organisations and The Manufacturing Institute (TMI) . • International supply chain project provides companies with an analysis of their supply chains and internal processes and support to manage and extract more value from their international supply chains. This project is delivered with UKTI, TMI and UNIDO. • Understanding gaps and international supply network practices for Inward Investment.

2. Develop sectors with large and widespread employment. These large scale industries are currently restructuring their supply chain models into a more commercially competitive environment. • NHS supply chain project

3. Develop resource efficiency, sustainable procurement and corporate social responsibility • Sustainable supply chain project – Sustainable procurement improves resource efficiency throughout the supply chain to improve efficiencies and reduce environmental impact.

Appendix 3

Overview of Public Sector Support for Enterprise NWDA The Northwest Regional Development Agency has a programme budget (£1090m 2008/09 – 09/10) to undertake a wide range of initiatives to support the delivery of the 2006 RES. £180m has been allocated to Enterprise Support which includes enterprise culture, business start-ups, finance for business and the operation of BLNW. In addition there is support for businesses in key sectors (£180m) and their innovation (£89m), internationalisation (£20m) and leadership and management (£20m). The remaining budget supports workforce development, sites and premises, sustainable consumption and production and marketing the region. A summary of regional policies and key projects is included in Appendix 2. Business Link provides an information, brokerage and diagnostic service to businesses: a universal service which is available to all businesses and individuals considering establishing a business and is predominantly through telephone and website contact; a targeted service which focuses on RES priority sectors and companies with proven growth potential which involves brokers with enhanced sector knowledge directly with businesses in their local areas to identify areas for development and brokerage solutions. Details of the region’s business support schemes are summarised and accessible on BLNW’s Product Database (www.businesslink.gov.uk/northwest) Product/Service

Commentary

Enterprise in Education

Secondary Schools Every secondary school (477) across the region is statutorily obliged to deliver Enterprise Education at Key Sage 4 (15-16 year olds). The funding (£60m nationally) isn’t ring fenced and is formula funded and works out at £5,000 to £16,000 per school. This entitlement will provide all Key Stage 4 pupils with the equivalent of five days’ activity focused on enterprise capability — innovation, creativity, risk-management and risk-taking, and a can-do attitude and the drive to make ideas happen – supported by financial capability and economic and business understanding. The 2008 Government Enterprise Strategy has announced an extra £30m to extend enterprise education from secondary schools into primary and tertiary education. NWDA is currently funding the Enterprise Generator for Cheshire and Warrington and one element of this project will be to develop enterprise awareness, skills, knowledge and understanding leading on to self employment. The project will focus on primary and secondary schools supported by Enterprise Hub Schools and extend beyond school into other organised youth programmes at a cost of £230,000 over three years. Further Education Sector An Enterprise Education Pilot has been funded by the Northern Way and involved 12 FE colleges in the Northwest region (10 in each of the other regions) each receiving approximately £9,000 to develop and promote policy and procedures to enable the development of enterprise teaching and learning. Higher Education Liverpool John Moores University has been funded by National Council for Graduate Entrepreneurs (NCGE) to support a full time Enterprise Champion’s post to promote policy and process across the university and act as a regional support for other universities. The Northern Way continued to support the regional Champion post beyond the end of the NCGE contract. As a result of the pilot scheme’s success, the NWDA is moving a project forward to continue this work and expand it to include up to six universities across the region, and as part of the process is applying for match funding from the ERDF in order to further expand the network of HE Enterprise Champions. The NWDA currently supports bursaries to enable Entrepreneurship Educator Tutors from regional universities to attend NCGE run international educators’ events. NWDA is working with NCGE and BERR to establish a University Enterprise Network (as announced in the Government’s Enterprise strategy) where universities partner with corporate businesses to undertake innovative and enterprising activities.

Product/Service

Commentary

Skills Development

Leadership and Management The LEAD (Leading Enterprise and Development with a provisional budget of £9.9m), programme is a project under development. It focusses on developing senior managers and leaders’ leadership skills and providing effective engagement with, and support to, SME businesses. Enterprise Skills Develop enterprise skills in individuals across all of the underperforming spatial areas and client groups targeted in the work streams above, with a particular focus on people aged over 50, the unemployed, and those in employment but looking to start a business. The full value of the project is £9.95m over 3 years (2006/7 to 2008/9). £1.2m of transitional activities is being undertaken during 2006/08 and the remaining £8.75m will be disbursed over the final 2 years of the project.

High growth business support

High Growth Support Project A 3 year targeted support programme to deliver enhanced business growth in the region. This project will be targeted towards businesses that (a) are pre-start or start-up firms which have the potential to reach a turnover of >£500k or to employ >5 people or (b) for established businesses which have the potential to increase turnover or employment by >20% per annum within the first three years of joining the programme.

Start-up support

Business Start-up and Survival Project The focus of this project is to provide services and support for people setting up in business, improve survival rates of businesses in their first 2 years, and to contribute towards increased levels of enterprise activity – particularly within the underperforming areas of the Northwest region identified within the RES based on low levels of enterprise and entrepreneurial activity relative to regional averages. The project will target the following underperforming areas and groups via three main work streams: • Spatial Priorities – specific areas within the Northwest identified within the RES as significantly lacking in enterprise, or remote from growth activity. All individuals living within the following areas will be considered for support: Barrow, Halton, • Blackpool, Knowsley, St. Helens and Wirral. • Urban Regeneration Company (URC) areas; and Housing Market Renewal (HMR) areas. • BME, Women, Disabled and Social Enterprises – these all represent hard-to-reach client groups within the community with specific barriers to setting up a business. Individuals within these groups will be eligible for support, regardless of the spatial area parameters set out above.

Enterprise support in disadvantaged areas

Local Authority Mainstream Economic Development Budgets Many local authorities’ economic development/regeneration department typically support: property portfolios, inward investment, place marketing, business grants, environmental improvements, start-up, business growth and upskilling the workforce. Proposals are currently being considered to allow local authorities to levy a surcharge on the business rates, this may provide additional revenue source for enterprise in the future.

Product/Service

Commentary Working Neighbourhood Fund (WNF) This fund is provided to local authorities in the 20% most deprived areas of England, as determined by the Indices of Multiple Deprivation 2007. This fund supersedes Neighbourhood Renewal Funding (NRF) from April 2008. The funding should be used to tackle worklessness in areas of most disadvantage. Enterprise is identified by Department for Communities and Local Government (DCLG) as an activity which should be supported. In the Northwest 22 local authorities can access these funds. Local Area Based Growth Initiative (LABGI) This is a reward grant given to local authorities who receive a growth in their business rate receipts. Local Authorities are encouraged to use this funding for economic development and enterprise activity. Local Enterprise Growth Initiative (LEGI) This was an open competition for deprived areas to bid for funding to raise enterprise levels in their most deprived communities. Four areas in the Northwest were successful: St Helens, Pennine Lancashire (Blackburn with Darwen, Lancashire County Council, Hyndburn, Burnley and Pendle), Blackpool and Liverpool/Sefton. Local Area Agreements (LAAs) Local area agreements are priorities agreed between central and local Government. Local areas agree to meet specific targets; in return for achieving increased levels of performance a “reward grant” is available. This can be used for economic development and enterprise purposes. The Government will distribute many of the above funds as part of the “Area Based Grant” (ABG). ABG is non-ring-fenced, it allows local areas to decide on what priorities the funds should be spent, this may not be economic development related activity Job Centre Plus Support ‘Pathways to Work’ is a 6-month programme of support targeted at unemployed individuals. The programme, which is run by Job Centre Plus, provides support to individuals in finding a job and offers training to meet the specifications of the job.

Appendix 2

Glossary of Terms BERR BME BLNW BSSP DIUS EBO EMBF ERDF FE GDP GEM GONW GVA HEI HMR LAAs LABGI LEGI LSC MAAs NCGE NWDA NWEF RCO RDA RES SENW SME SNR SRP TEA TMI URC VCS

Department for Business, Enterprise and Regulatory Reform Black and Minority Ethnic Business Link Northwest Business Support Simplification Programme Department of Innovation, Universities and Skills Established Business (over 31/2 years) Ethnic Minority Business Forum European Regional Development Fund Further Education Gross Domestic Product Global Entrepreneurship Monitor Government Office for the North West Gross Value Added Higher Education Institutions Housing Market Renewal Local Authority Agreements Local Authority Based Growth Initiative Local Enterprise Growth Initiative Learning and Skills Council Multi Area Agreements National Council for Graduate Entrepreneurs Northwest Regional Development Agency Northwest Enterprise Forum Regional Cluster Organisation Regional Development Agency Regional Economic Strategy Social Enterprises Northwest Small to Medium sized Enterprise Sub National Review of Economic Development and Regeneration Sub-regional Partner Total Early Stage Entrepreneurial Activity (less then 31/2 years) The Manufacturing Institute Urban Regeneration Company Voluntary Community Sector

The Northwest Regional Development Agency PO Box 37 Renaissance House Centre Park Warrington WA11XB Tel: +44 (0)1925 400 100 Fax: +44 (0)1925 400 400 www.nwda.co.uk www.enw.co.uk/invest www.enw.co.uk/visit

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