ERC Research Showcase Highlights Workplace Mental Health and Rural Business Insights

ERC Research Showcase
January 26th 2023

Welcome and Introduction
 Stephen Roper

Workplace mental health and
well-being: employer-level practices
and outcomes
 Maria Wishart
 Juliet Hassard

• Around 40% of employees report work-related mental health issues (BITC, 2019)
• 300,000 UK employees lose their jobs annually due to MH issues (Stevenson & Farmer, 2017)
• Estimated annual cost to UK employers of poor mental health has risen by 25% since 2019, to
£53-56 billion (Deloitte, 2022)
• 14.3 million working days lost every year in the UK due to stress depression & anxiety (UK
Government, 2019)
• COVID-19 appears to have driven a deterioration in mental health – UK levels of mental ill
health still higher than pre-pandemic (Deloitte, 2022)
Why study workplace mental health and wellbeing?

1. Evidence from 3 waves of employer-level survey data
2. Insight into line manager experiences of managing workplace mental health
3. Evidence from the ‘Managing Minds’ intervention
Workplace mental health and wellbeing:
employer-level perspectives

• Computer Assisted Telephone Interview (CATI) survey covering Midlands employer
experiences of workplace mental health, awareness and adoption of mental health
initiatives
• Wave 1: Jan-March 2020 (Pre-Covid): 1,899 firms
• Wave 2: Jan-April 2021: 1,551 firms
• Wave 3: Jan-April 2022: 1,904 firms
• Around 250 firms participated in all three waves
1. Evidence from 3 waves of employer survey data

Mental health-related absence creeping back up
66%
45%
30%
17%
26%
62%
44%
25%
14%
25%
54%
54%
35%
17%
30%
0% 10% 20% 30% 40% 50% 60% 70%
250 plus
50-249
20-49
10-19
All firms
2020 2021 2022
Proportion of firms reporting mental health-related
sickness by size
Source: ERC (2023) Workplace mental health in Midlands firms 2022: Baseline report (Forthcoming)
Proportion of firms reporting mental health-related
sickness by sector
35%
26%
27%
22%
17%
23%
26%
37%
22%
21%
18%
11%
22%
25%
42%
28%
28%
24%
21%
29%
30%
0% 10% 20% 30% 40% 50%
Other services
Business Services
Hospitality
Wholesale, retail
Construction
Production
All firms
2020 2021 2022

Presenteeism also on the increase
Proportion of firms reporting presenteeism by size
Proportion of firms reporting presenteeism by sector
39%
26%
22%
18%
21%
30%
21%
19%
12%
17%
34%
41%
36%
29%
33%
0% 10% 20% 30% 40% 50%
250 plus
50-249
20-49
10-19
All firms
2020 2021 2022
25%
23%
20%
18%
20%
18%
21%
19%
26%
11%
11%
10%
16%
17%
33%
42%
38%
27%
23%
34%
33%
0% 10% 20% 30% 40% 50%
Other services
Business Services
Hospitality
Wholesale, retail
Construction
Production
All firms
2020 2021 2022

Greater uptake of mental health initiatives
Proportion of firms adopting mental health initiatives
Mental health & wellbeing activities offered
51%
43%
32%
31%
52%
42%
25%
27%
44%
36%
25%
22%
0% 10% 20% 30% 40% 50% 60%
Offer mental health & wellbeing
activities
Mental health & wellbeing lead at
board level
Mental health budget
Mental health plan
2020 2021 2022
37%
53%
63%
72%
94%
95%
37%
46%
68%
72%
91%
95%
34%
48%
59%
65%
93%
94%
0% 20% 40% 60% 80% 100%
Have employee mental health
champions
Training for line managers in managing
mental health
Risk assessment/stress audits
Awareness raising for staff on mental
health issues
Make appropriate workplace
adjustments to those who need them…
Encourage open conversations about
mental health in the workplace
2020 2021 2022

More engagement with outcomes of mental
health activities
Proportion of firms evaluating mental health initiatives
Reported benefits of mental health activities offered
67%
43%
43%
39%
50%
41%
52%
31%
23%
38%
41%
0% 20% 40% 60% 80% 100%
250 plus
50-249
20-49
10-19
Other services
Business Services
Hospitality
Wholesale, retail
Construction
Production
All firms
62%
61%
57%
69%
68%
56%
56%
54%
65%
65%
50%
49%
46%
57%
57%
0% 10% 20% 30% 40% 50% 60% 70% 80%
Improved business performance
Reduced work related stress/mental
ill health absence
Improved staff retention/reduced
staff turnover
Improved job satisfaction levels
Improved mental health & stress mgt
2020 2021 2022

2. Insight into line manager experiences of
managing workplace mental health
Qualitative interviews with 22 line managers suggest:
• They feel strong expectations about how they should manage mental health issues
… it is a fine line between being very sympathetic and also acting on behalf of the business and your
professional job. (WM02)
• They often feel inadequate and unprepared in the face of mental health issues
I think sometimes people are worried about saying the wrong thing or knowing what they can say and
being… you know, am I prying too much into your personal life? (EM09)
• They feel unsupported by their organisations when it comes to the management of workplace
mental health issues
they're pretty shocking at giving you any support for anything to be honest. So… …we've kind of made it up
as we go along… (WM05)

Employer data summary
• Mental health sickness absence and presenteeism are increasing, having declined at the
height of the pandemic
• Evidence of greater uptake of some key mental health-related initiatives by employers
• More firms evaluating their initiatives and identifying positive outcomes
• More firms are funding mental health initiatives and activities, but many still rely on
unbudgeted practices to manage workplace mental health issues
• Only 53% train their line managers in managing workplace mental health
• Managing these issues can provoke considerable emotional labour in line managers

• Managing Minds at Work pilot:
• We develop an online training course for line managers focused on preventing poor mental health
at work.
• We hope to improve line managers’ knowledge, confidence and management competencies to
promote better mental health at work and prevent work-related stress.
• Cluster Randomised control trial with process evaluation
3. Evidence from the ‘Managing Minds’ intervention

 Line manager training
tends to focus on
awareness-raising and
supporting employees
 Need more
preventative-focused
interventions and line
manager training to
support these
Rationale: Line Managers have a critical role,
but need support

The Managing Minds at Work Training
Design
5 online modules
30 minutes each
Completed over 6
weeks
Interaction, reflection,
resources
Co-created with
experts and users
Modules
Self-care
Management competencies
to prevent stress
Designing work to promote
well-being
Creating a psychologically
safe workplace
Having conversations about
mental health

Managing Minds at Work: Results
Psychological wellbeing
Confidence to create a
psychological healthy
workplace
Managing conflict and
problem-solving
Knowledge about
mental health
Managing and
communicating existing
and future work
Managing the individual
in the team
Respectful and
responsible
• Changes remained stable at
6-month follow-up for the
intervention group.
• Observed barrier –
completing during working
time.
Baseline: n=146, intervention group; n=83, control group;
3-months: n=85, intervention; n=73, control group;
6 months: n=26, intervention group

Managing Minds at Work: Next steps
• Next Steps:
• Explore how to best implemented in organisations to ensure integration with other
strategies and policies to maximise effectiveness.
• Examine access issues for sectors, employers and employees who we haven’t engaged.
• Examine how to engage line managers that have not engaged.

Understanding and Engaging Rural
SMEs
 Kevin Mole
 Serdal Ozusaglam
 Melanie Thompson-Glenn

Agenda
• Intro and clusters - Kevin Mole
• Rural innovation - Serdal Ozusaglam
• Engaging with Rural Melanie Thompson-Glen
Fostering an enterprising countryside

NICRE
National
Innovation
Centre for
Rural
Enterprise
• Funded by Research England from 2020-
• Led by University of Newcastle with Partners with
the ERC (Warwick) and CCRI University of Gloucester
with RAU.

Mission
• We research
• Research increases our knowledge and deepens our understanding, changing the way we think about rural
enterprises, how we address their challenges and identify new opportunities.
•
• We innovate…
• Together with our network of partners, we’re combining theory and practice to encourage new ways of
thinking and supporting development of new products, services and practices that provide tangible benefits to
our rural businesses and communities.
•
• We inform…
• Sharing the knowledge, best practice and practical experience we’ve gained to inform local, regional and
national policy making and support for rural enterprise at all levels

Rural firms matter
• Enterprises located in rural areas of the UK account
for around one in four of all UK businesses
• Small firms account for 70% employment in rural
areas
Firms
Rural Urban

Rural firms are more likely to be operating in ABCDEF -
Production and construction and GHI - Transport, retail
and food service/accommodation
Source: https://nicre.co.uk/media/e0qgsjyp/small-rural-firms-in-english-regions-report-final-september-2017-updated.pdf

Firms located in villages and hamlets report low
broadband quality

Firms located in villages and hamlets report poor
transport infrastructure

One size does not fit all
Clustering rural firms

Rural Firm
Clusters:
planning and
size (and risk
register)

Clusters 2 and 3 more responsive to the Covid Crisis
0
0.02
0.04
0.06
0.08
0.1
0.12
0.14
0.16
Reduced costs Diversified Changed staff/production Increased marketing
Responses to Covid
Cluster 1 Cluster 2 Cluster 3

A different analysis suggests four clusters from five
factors
• Cluster 1: 31% of the overall sample. characterised
by high level of responses on local relationships and
connections.
• Cluster 2: 23% of the overall sample. characterised
by having highest proportions of local trading.
• Cluster 3: 21% low levels of scores on firm level
characteristics. less engaged
• Cluster 4: involve 25% of the overall sample.
engaged in making management strategy and risk
resilience register planning in larger enterprises.
Cluster 4 had greater performance during Covid.

Entrepreneurship and innovation in Rural Areas
Serdal Ozusaglam

Do firms’ location or internal capabilities and aspirations shape innovation?
Aim: to consider the internal and external factors associated with innovation and digital innovation among rural and urban
micro-businesses, with a particular focus on how owner-managers’ business and personal ambitions drive innovation.
Data: Micro-business Britain Survey (MBBS) data, which provides detailed information for 5,230 micro-businesses with 1-9
employees across England and Wales.
Findings:
• First, rural micro-businesses are less likely to be innovating than similar firms in urban locations.
• Second, there is no difference between levels of digital innovation among rural and urban micro-businesses.
• Third, there is a strong positive association (complementarity) between digital innovation and innovation related to
products and processes
• Fourth, there is a strong positive associations between micro-firms’ business ambitions and both innovation and digital
innovation.
Ozusaglam, S. and Roper, S. (2021): It’s not just where you are, it’s where you want to go. Ambition, innovation and digital innovation in urban and rural micro-
businesses. NICRE Report no:2, May, 2021.

Spatial differences in entrepreneurial activities
Aim: What is the role of individual psychological traits and cognitive properties on levels of entrepreneurship activity?
During the Covid-19 pandemic , how have these traits and abilities affected entrepreneurial activity in urban and rural
areas of the UK (outside London) ?
Data: 2019-2021 Global Entrepreneurship Monitor (GEM) dataset,
Findings:
• Individuals residing in rural areas of the UK are more likely to engage in early-stage entrepreneurship and to
own/manage new businesses, compared to individuals in urban areas.
• Individuals’ characteristics, attitudes and market perceptions have similar impacts on the probability of engaging in
early-stage entrepreneurship and ownership/management of new businesses, regardless of where people reside.
• The attitudinal differences between rural and urban respondents explained almost all of the difference in urban-rural TEA
rates in 2019, around a third of the difference in TEA rates in 2020, and about a third of EBO rates differentials in 2019 and
2020.
Ozusaglam, S., Roper S. and Prashar, N. (2022): Attitudinal changes and the declining rural-urban differential in entrepreneurship during the pandemic.
An assessment using Global Entrepreneurship Monitor (GEM) data, Ongoing research paper.

Do rural areas favour firm innovation? How do innovating rural firms
compensate for the innovation disadvantages of these areas?
Aim: Test what was found by Edler and Trippl’s (2019) case study: firms in more rural areas may compensate for the
weakness of localised knowledge spillovers by i) investing more on internal R&D ii) developing more extensive formal
collaborations with distant firms and iii) investing less on Intellectual Property protection mechanisms than their
counterparts in urban areas.
Data: UK Innovation Survey 2015, 2017 and 2019
Findings:
• Rural innovation active firms and product innovators adopt different compensation and exploitation strategies.
• These differences are linked more to the businesses’ characteristics as well as the type of innovation activity rather than
locationally specific factors.
• Our findings suggest the similarity between rural and urban innovators, and the common applicability of standard
conceptualisations of collaborative innovation and absorptive capacity.
Ozusaglam, S and Roper, S. (2022) Compensation and exploitation behaviours in the innovation strategies of rural firms - Econometric evidence for the UK.
Submitted to Research Policy (4*ABS).

Engaging with Rural Business
Melanie Thompson-Glen

Importance of
engagement
• Keeps NICRE current
• Encourages co-creation – research, innovation
projects and policy work
• Provides new channels for sharing outcomes,
extending the reach of the work
• Creates opportunities for impact
• Synergy – more than the sum of the parts
• Engage through;
• Events
• Innovation projects
• Business beacons
• Digital marketing and social media

Innovation Projects
• Practical pilot projects, delivered in partnership with communities or groups of businesses
that address a rural challenge.
• Projects must be
• Scalable
• Replicable
• Able to develop a blueprint
• Have an element of Innovation
• Allow engagement with range of stakeholders – Businesses, community organisations,
individual rural residents, researchers, funders, rural organisations.

Humshaugh Net Zero
• Humshaugh Net Zero is a CIC based in a small
village in West Northumberland
• Developed an action plan
• Multiple projects;
• Community solar farm
• Recycling project
• Developed community carbon calculator
tool
• Housing insulation project
• https://www.humshaughnetzero.org/

Resilience Toolkit
• Online tool to help businesses consider their
approach to risk and develop resilience
• Development of this tool has allowed a range of
engagement
• Individual businesses
• Business advisors and other business
intermediaries
• Rural organisations – NFU, Rural Design
Centre, Rural business hubs

Rural Digital Hubs
• Project will launch spring 2023
• Developing digital hubs across 50 plus rural
village halls/buildings
• Addressing digital poverty
• Developing digital skills
• Developing sustainable digital champions
programme in each location
• Engaging with:
• Communities
• Businesses
• Hard to reach elements of community
• Organisations - NHS, Council, Support
organisations
• Develop blueprint

Founding research partners:
Funded in partnership with:
Founding business partners:
www.nicre.co.uk
@NICRErural
National Innovation Centre for Rural Enterprise

Small business internationalisation:
what have we learned after two
years?
 Jun Du
 Halima Jibril

44
Centre for Business Prosperity
Post-Brexit UK Trade: what happened?

45
A strong comeback of global Trade in 2021/22!

46
… that however has bypassed the UK…
Source: Du, Satoglu and Shepotylo, 2022, Post-Brexit UK Trade: An Update, Centre for Business Prosperity Insight Paper, Nov 2022.
This is only for trade in goods.

… Maybe it is the context?
GDP
Im
Ex
G
I
C

Hang on, maybe not…

Hummm… definitely not…

Big is beautiful…for some.

51
Sanitary and phytosanitary (SPS):
13-15%
Technical barriers to trade (TBT):
2-3%
What is the one single factor that explains UK’s lackluster performance ?
£12.4 billion for
6-mon period
2021Q1-2
/70% of recorded
export reduction
Non-tariff Measures
Source: Du, J. and Shepotylo, O., 2022. TCA, Non-Tariff Measures and UK Trade. ERC Research Paper 98

52
Brexit and UK Services Trade: What do we know?
Hall, et al (2020), Services and Brexit, UKICE
Douch, et al (2020), Ten Facts About the UK Professional and Business Services
(PBS) Sectors and Their International Traders, LBGCBP Insight Paper

53
The case for
services trade
• Jobs and living
• Small businesses
• Regions
• Manufacturing
• Firms do not
direct trade
internationally
• Investment

Source: Du, J. and Shepotylo, O., 2021. Brexit and Services Trade: New Evidence from Synthetic Diff-in-Diff Approach, UK In
Changing Europe Working Paper 08/2021

55
Firm level evidence:
Brexit uncertainty negatively affected UK services exports in three ways that might have caused the
reduction in exports:
(i) trade destruction, while more productive, larger and older firms export more at extensive and intensive
margins.
(ii) reduced export entry
(iii) firm relocation
Our empirical evidence drawing on Orbis firm level exports in services data, combined with the Orbis Cross-border
Investment database over 2012-2019 provides clear and robust support on our theory.
Source: Du J, Shepotylo Oleksandr and Yuan Xiaocan, 2023, How Did the Brexit Uncertainty Impact on UK Trade in Services?
(available March 2023)

Make friends, and make friends again
Forthcoming research:
• Veterinary agreement?
• Non-tariff measures impact on heterogeneous firms and regions
• Shifts in global trends and regional implications: role of knowledge space
On services
• UK services trade in some sectors have
slowed down by the Brexit Referendum.
• We do not know how that played out since
2021, yet.
• There are reasons to suspect the TCA effect
(barebone deals with services) on services
trade had a negative on trade in services,
perhaps even larger than goods.
• UK’s investment proposition in global
market is changing
• So far, 71 rollover agreements + Australia
(“too much for too little”) and India (?)
• Pragmatism is needed to seek for improving
the Brexit deal
• Distributional effects across firm size
• Importance of building up competitiveness

Of chickens and eggs:
Exporting, innovation novelty and productivity
Stephen Roper and Halima Jibril
Warwick Business School
Stephen.roper@wbs.ac.uk, Halima.Jibril@wbs.ac.uk

Background
• Brexit has created new tensions and
opportunities for UK exporting firms and
those considering export market entry
• The link between exporting and
performance is clear – exporting firms
are more productive
• UK Innovation and Export strategies
continue to prioritise supporting
innovative firms to export and establish
market leadership in specific sectors
• However, the causal mechanisms linking
exporting, innovation and productivity
remain unclear, despite significant
research attention
UK Productivity
distribution by
trading status, 2016

What we know
• The literature suggests two complementary explanations of why exporting firms are more
productive:
• Learning to Export (LTE) - higher productivity leads to exporting and exporting success (e.g. Gkypali
et al., 2021)
• Learning by Exporting (LBE)- exporting and export intensity lead to greater productivity (e.g.
Eliasson et al., 2012)
• Innovation plays a key role in these learning processes-
• Firms with innovative products are more likely to export
• After exporting, innovative firms are more likely to absorb foreign knowledge and innovate some
more
• But not all innovations are created equal (Turner and Roper, 2020), and firms differ in their
exporting patterns (Andersson 2013, Love and Manez, 2019)
• So how does innovation of different types interact with exporting to generate productiivty
gains? This we do not know.

What we don’t know
• We know little about the role of product innovation novelty and export
strategies in driving LTE or LBE
• How is the degree of innovation novelty – New to the Market (NTM) and New to the Firm
(NTF) innovation related to firms’ export performance?
• How does exporting strategy- persistent or intermittent - influence the links between
innovation novelty and exporting?
• How is productivity subsequently affected by the interplay between innovation novelty
and exporting strategy?

Summary of conceptual framework
Innovation
Exporting
NTM
(radical)
NTF
(incremental)
Productivity
Superior and internationally competitive products
Technologically capable firms learn better
Persistent vs intermittent exporting
Persistent exporters should have greater
learning opportunities
Exporting should
provide a larger
market base and
induce competition
Uncertain- higher
profitability but
also higher cost/
‘disruption’ effect

Data and Methods
Data
• UKIS - Eight waves of biennial surveys of around 14,000 businesses per wave, covering 2002-2018.
• Comprehensive information on innovation activities, exporting and labour productivity
• We construct an unbalanced longitudinal dataset of between 2,000 to ~11,500 firms depending on
specifications
Measurement:
• Export performance- share of turnover accounted for by export sales
• NTM (NTF) innovation performance- share of turnover accounted for by NTM (NTF) innovation sales
• Productivity: turnover per employee
• Persistent exporter - indicator variable equal to one if i) the firm was surveyed in three or more
waves and ii) in each wave, the firm reported that it exported it’s goods and services.
• Intermittent exporter- indicator variable if i) the firm was surveyed three or more times but
ii)reported exporting in some waves but not in others.
Econometric approach
• Seemingly Unrelated Regression (SUR) model
• System Generalised Methods of Moments (GMM).

Summary of results
Innovation
Exporting
NTM
NTF
Productivity
Persistent
exporting
Intermittent
exporting

Exporting allows innovative firms to become more
productive

Conclusions
• Radical innovation, not incremental innovation, drives export performance
• In turn, exporting leads to greater radical and incremental innovation
performance, with larger impacts on incremental innovation
• LTE and LBE effects are greater for persistent exporters
• Exports increase productivity but innovation has only an indirect impact
• Exporting is crucial in enabling innovators become more productive

Recommendations
• Export promotion policies should target technologically leading firms
that are market leaders within the UK but that are not exporting (or
not exporting much)
• Export support should also provide particular incentives for firms to
persistently engage with export markets in order to maximise
learning benefits
• To realize productivity gains from innovation, innovation support
needs to be tied more strongly to export support

Thank you
Jun Du
ERC Lead for ERC4 WP4 Internationalisation and Productivity
Centre Director for Centre for Business Prosperity (CBP)
Professor of Economics, Economics, Finance & Entrepreneurship Group
Aston Business School, Aston University Birmingham B4 7ET, UK
Mobile +44 (0)77130 85539
Email: j.du@aston.ac.uk, Skype: jun.du1 Wechat: Jundu_2014
Twitter: JunDu_Economist
Find more research on trade and GVCs research conducted by CBP:
https://www.lbpresearch.ac.uk/research-areas/
research-area-trade-gvcs/
For further details on ERC please visit :
www.enterpriseresearch.ac.uk
@ERC_UK

Supporting innovation policy
through ERC and the Innovation
Caucus
Stephen Roper and Tim Vorley - in conversation

Local social capital and
entrepreneurship
 Anastasia Ri

Social capital
relates to those
norms and patterns
of behaviour that
correspond to inter-
human self-
organisation,
initiative, and
cooperation
Context/Background
• Link between social capital and entrepreneurship is now well
understood with massive theoretical and empirical literature supporting
the existence of the corresponding linkages (Mickiewicz and Rebmann, 2020).
Which forms of social capital support which forms of entrepreneurship?
• Yet, entrepreneurship remains a broad phenomenon… Entrepreneurs
are not a homogenous group
• And social capital is a multi-dimensional concept which can be
measured at different levels…
Social ties
Trust
Cooperation
Informal networks

Local Social Capital
‘spatially defined norms,
values, knowledge,
preferences and other social
attributes or qualities that are
reflected in human relations’
(Westlund and Bolton, 2003, p.79).
When these spatial bounds
are defined at a very granular
level of ‘place’, local
communities and
neighbourhoods, then social
capital may be viewed as a
‘community characteristic’
Research Question
• Local social capital is more homogeneous than regional
or societal, with higher level of aggregation being at risk
to hide important variations and nuances of social
relationships
• There are still unexplained intra-country variations of
early-stage entrepreneurial activity
• Our knowledge of place-based entrepreneurship
remains limited

Local Social Capital
‘spatially defined norms,
values, knowledge,
preferences and other social
attributes or qualities that are
reflected in human relations’
(Westlund and Bolton, 2003, p.79).
When these spatial bounds
are defined at a very granular
level of ‘place’, local
communities and
neighbourhoods, then social
capital may be viewed as a
‘community characteristic’
Research Question
How important is local social capital in supporting
different forms of entrepreneurship?
… and different forms of entrepreneurial entry in particular?
Opportunity vs
necessity
Export-oriented
vs non-exporting
Innovating vs
imitative
Ambitious vs low
growth
aspirations
We consider the heterogeneity of types of entrepreneurial new ventures:

Hypotheses
H1 - Local social capital will be associated with the individual’s
propensity to launch a necessity-based start-up
propensity to launch a low growth aspirations start-up
H3 - Local social capital will be associated with the individuals’
propensity to lunch a non-exporting start-up
propensity to launch a start-up with no initial innovation component,
compared to the one with innovation component

Data
Co-op’s Community Wellbeing Index (CWI)
• Place-based approach to measure the
relationships between people and place.
• Contains 9 domains organised around 3 pillars
(people, place and relationship)
• We interpret two CWI indicators Relationship &
Trust and Voice & Participation as proxies for
local social capital
• Captured at a ‘seamless’ locale level, designed
to capture the local area that people would call
‘neighbourhood’
• Using data from 2018 only (base level)
Global Entrepreneurship Monitor (GEM) UK
• Annual Population Survey (APS) - Individual
level dataset
• Enables distinction in start-up activity
• Demographic data available on individuals such
as migration status, gender, education, age and
ethnicity
• Sample is constructed to be representative of
the UK population
• 2018-2020
GEM APS and CWI data are matched at postcode level.

Model
𝑙𝑙𝑙𝑙
𝑃𝑃 𝑠𝑠𝑠𝑠𝑠𝑠𝑠𝑠𝑠𝑠𝑠𝑠𝑠𝑠 = 𝑖𝑖
𝑃𝑃 𝑠𝑠𝑠𝑠𝑠𝑠𝑠𝑠𝑠𝑠𝑠𝑠𝑠𝑠 = 0
= 𝑏𝑏𝑖𝑖𝑖𝑖𝑖 + 𝑏𝑏𝑖𝑖𝑖𝑖𝑖 𝐶𝐶𝐶𝐶𝐶𝐶𝑖𝑖𝑖𝑖𝑖𝑖 + 𝑏𝑏𝑖𝑖𝑖𝑖𝑖 𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝑠𝑠𝑖𝑖𝑖𝑖 + ∈𝑖𝑖𝑖𝑖
𝑤𝑤𝑤𝑤𝑤𝑤𝑤𝑤𝑤 𝑖𝑖 = 0, 1 𝑜𝑜𝑜𝑜 2 , 𝑡𝑡 = (2018, 2019, 2020)
Start-up MOTIVATION EXPORTING INNOVATION AMBITION
0 No start-up No start-up No start-up No start-up
1 Necessity start-up Non-Exporting start-
up
Start-up without
innovation
Low growth
aspiration start-up
2 Other/ pull start-up Exporting start-up Innovative start-up High growth
aspiration start-up
CWI – This all 9 domains of the Community well
being index in 2018 (index taking value from 0 to 1)
Relationship & Trust
Voice & Participation
Equality
Economy, Work & Employment
Health
Education and Learning
Culture, Heritage & Leisure
Housing, Space & Environment
Transport, Mobility & Connectivity
Controls – Second Home Ownership, Know an
entrepreneur, Fear of failure, have skills needed to
start a business, gender, age band, education,
income, migration status, ethnicity, Year
Startup – This variable represents the following based on 4
models

Results
MOTIVATION EXPORTING INNOVATION ASPIRATION
LABELS Startup,
necessity
Startup,
other/pull
Startup, no
export
Startup,
export
Startup,
no inn.
Startup,
innovation
Startup, low
growth asp.
Startup, high
growth asp.
Relationship & Trust
(CWI)
1.949 1.388 2.719* 0.842 2.456* 1.260 1.820 0.927
(0.912) (0.683) (1.392) (0.571) (1.287) (0.742) (0.673) (0.848)
Voice & Participation
(CWI)
1.664** 0.954 1.542* 0.960 1.715** 1.258 1.417* 0.864
(0.389) (0.247) (0.399) (0.324) (0.456) (0.368) (0.269) (0.389)
Observations 15,781 15,781 15,533 15,533 10,239 10,239 15,781 15,781
Note: Baseline – not involved in start-up. Relative risk ratios are reported. ***denotes significance level
at 0.01; ** at 0.05; * at 0.1

Conclusions and implications
Local social capital is
particularly important
for necessity
entrepreneurs – those
who are pushed into
entrepreneurial
activity because of the
lack of alternative
employment
prospects.
Why does this matter?
Research and policy action has previously been focused on opportunity entrepreneurs, or
those who start a business out of personal aspirations in pursuit of growth, profit, and
innovation rather than due to the lack of alternatives. There is an expectation that these
opportunity-driven ventures will result in strong benefits for society.
But… we argue that necessity (or non-opportunity) entrepreneurship is important for those
who are socially underprivileged to escape from a situation of dependency, to help avoid
the degradation of skills by inactivity, and the poverty trap.
Entrepreneurs, even if ‘pushed’ into self-employment, gain new knowledge and
entrepreneurial skills, which may lead to the subsequent discovery or creation of new
opportunities and lead to more ambitious venture creation in the future.
Thus, necessity entrepreneurship also plays a role in spreading opportunities, supporting
communities and local development, and can therefore contribute to the ‘levelling up’
agenda.
This is why thinking about what supports marginal entrepreneurship matters….

Conclusions and implications
Local social capital is
particularly important
for necessity
entrepreneurs – those
who are pushed into
entrepreneurial
activity because of the
lack of alternative
employment
prospects.
What could this support look like?
Improvement of social infrastructure, such as libraries, green spaces and sports and
community centres can create safe local places where people can meet, exchange ideas,
and come together with common projects, and may strengthen local social capital
(Klinenberg, 2018).
This can play a crucial role in supporting entrepreneurial activity in less affluent
neighbourhoods, where necessity entrepreneurship is commonplace, giving those who are
disadvantaged an option to support themselves by starting their own businesses and
therefore widening their range of options in the labour market.
It remains to uncover what types of social infrastructure are the most beneficial to spur
entrepreneurial activity and to quantify the impact of each pound spend on social
infrastructure investment – an important research agenda for the future.

Looking ahead –
ERC plans for 2023
 Stephen Roper

Themes and future projects
R&D, innovation and diffusion
Mission innovation systems
Absorptive capacity in sectors and firms
IP use in smaller firms
Innovation and Research Caucus (IRC)
Net zero and the digital transition
Mapping net zero support
Understanding the net zero journey
The twin transition – an international
perspective
Internationalisation and productivity
Business dynamism in the UK and US compared
Transitions and productivity
Carbon emissions and productivity dispersion
Knowledge, space and inward investment
Places and prosperity
Rural opportunities
Job dynamics in rural areas
Intellectual property use across space
Evaluating business support

New data, new insights
• Major new survey-based projects during 2023 include:
• Mental heath, well-being and productivity – wave 4 of the UK survey, and the publication
of results from Irish and Swedish employer surveys (ESRC)
• From crisis to growth – the 2023 State of Rural Enterprise Survey of rural businesses with
colleagues from NICRE (Research England)
• Understanding early-stage equity – survey at pilot stage looking at equity provision, gaps
and understanding the customer journey (BEIS/IUK)
• Innovation State of the Nation (ISNS) – a new and timely innovation survey with diversity,
cost of doing business crisis, skills and net zero dimensions (IUK)

Upcoming events…
• ERC/IFB Research Foundation: New Frontiers in Family Business
Research Conference, 2nd March, The Shard and online…
registration now open
• The 8th State of Small Business Britain Conference, 21st June, the
Shard and online… registration opening soon!
• To keep up with all our events and news, subscribe to our
monthly newsletter: https://www.enterpriseresearch.ac.uk/

Thank you
For further details please visit :
www.enterpriseresearch.ac.uk
@ERC_UK

ERC Research Showcase Highlights Workplace Mental Health and Rural Business Insights

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ERC Research Showcase Highlights Workplace Mental Health and Rural Business Insights