Presentation by Mark Hart to the UKBAA Midlands Investment Summit. Millennium Point. March 20th 2018

1. Professor Mark Hart
Deputy Director, Enterprise Research Centre &
Aston Business School
20th March 2018

2. Background
• Clear connection between ‘business dynamism’ and growth in
productivity
• But some ‘faulty valves’ in the Midlands Engine – certainly in
the West Midlands
• Business start-up and growth metrics reveal the challenge
ahead – for both the investor community and the business
leaders in the region

3. Business Dynamism – the Challenge
• Initial survival and scaling of start-ups a key concern – not
interested in the volume of start-ups per se – we are too
complacent on that front.
• Very few firms in the region that can be categorised as ‘high-
growth’ or have shown evidence of scaling
• Growth ambition among early-stage entrepreneurs is average
at best
• These ‘weak’ business growth metrics show some correlation
with low levels of productivity

4. Why are leadership/management/
entrepreneurial skills crucial?
• Growth Accelerator
clients in England
reported that the main
barriers to their growth
were Strategy and
Management (53%)
• Chartered Institute of
Personnel and
Development shows that
nearly three-quarters of
SMEs in England report a
deficit in L&M Skills.
Source: Hayton, J (2015) “Leadership and Management Skills in SMEs: Measuring
Associations with Management Practices and Performance” BIS Research Paper
No. 211, March 2015
Skills Practices Performance
Leadership Skills
Entrepreneurship
Skills
Organisational
Skills
Strategy
Centralisation
Strategy
Formalisation
Strategy
Responsiveness
Technical Skills HRM Best
Practices
Turnover
Productivity
Growth

5. Female entrepreneurs and equity/VC -
Perceptions need challenging?
• Despite the steady increase of women in entrepreneurship
(GEM, 2017), equity investments in women-led business are
still far from their men counterparts. Why???
– Demand: the male-stereotyping of entrepreneurs, and more
significantly of successful entrepreneurs, can act as a hurdle for
women considering applying for venture capital.
– Supply: the limited presence of women among financiers is seen as a
barrier to women entrepreneurs to access venture capital financing.
Recent evidence of the US suggests that VC firms with women
partners are 2X as likely to invest in start-ups with at least one woman
on the executive team and three times more likely in start-ups with a
woman CEO, compared to VC funds with no women representation

6. International Comparisons – use of
equity/VC by Gender (GEM, 2015)

7. Long way to go…..?
• Overall, despite the efforts in understanding the challenges
faced by women entrepreneurs in raising capital to their
ventures, the gendered gap in the equity capital, and also
venture capital markets, is still a reality.
• Many of these difficulties are deeply rooted and structural,
affecting for both supply- and demand-sides, and may require
interventions that go beyond the early recommendations that
used to focus on improving financial or technical skills, among
others

8. What also needs to change?
• Developing a growth-oriented mindset within more small business
leaders in the region is crucial – need to create a pipeline of
demand for investment. How? Programmes abound and the Scale-
up Institute provides a focus on good practice
• Growth Hubs are in the local frontline of business support policy -
but, need to be more explicit on how their activities connect to this
agenda – we need greater segmentation of what the business
support offer will be and resource it accordingly.
• Challenge to the investor community – recent BBB report on Small
Business Finance Markets (2018) sets out the current state of
supply and take-up – regionally, sectorally and individually.

9. Questions and comments?
More information at http://enterpriseresearch.ac.uk/
Contact us:
Mark Hart mark.hart@aston.ac.uk
This work contains statistical data from ONS which is Crown Copyright. The use of these data does not imply the
endorsement of the data owner or the UK Data Service at the UK Data Archive in relation to the interpretation or analysis of
the data. This work uses research datasets which may not exactly reproduce National Statistics aggregates.